Now Dropbox comes to Dublin. For the greatly talented workforce or the highly imaginative tax rates?

 

 

My blog of yesterday, regarding the use of Ireland as basically a tax haven and allowing web companies to repatriate profits to Ireland, caused a bit of a stir. 

In essence, big companies such as Microsoft, Google, Amazon and others such as Facebook and Twitter, have been accused as using Ireland for "tax avoidance". US lawmakers recently compared us to Belize and Costa Rica.

My blog of yesterday follows this blog below, but it's also here  http://streamabout.blogspot.ie/2012/12/starbucks-amazon-google-microsoft-wpp.html


And then, irony of ironies, on the same day, Taoiseach Enda Kenny (Prime Minister) announces that 'Dropbox' are to be the newest tech company to set up in Dublin. He made it clear that Dropbox's decision was based on the old line about a talented workforce blah blah blah and not tax. Here's what The Irish Independent reported his words as;

"Ireland has many advantages to offer international companies, including our young, passionate and talented workforce, all of which will be a great asset to Dropbox as they make their new home in Dublin."

Not a mention of Tax. 

The Irish Independent also reports that "The Government was on alert last night after US lawmakers described the country as a "tax haven" and accused American technology companies operating here of using Ireland to avoid paying corporation tax at home.The US Senate's Permanent Subcommittee on Investigations has begun a probe into how American companies funnel international profits through countries such as Ireland with lower corporation tax rates than the US.Using Microsoft and Hewlett Packard as case studies, the committee chairman Carl Levin said "the tax practices and gimmicks range from egregious to dubious validity".If the US does prevent companies from using Ireland for tax purposes it could have a dire effect on the economy. Numerous companies, including Google, Facebook and Microsoft, who between them employ more than 4,000 people here, are believed to use Ireland for its tax efficiencies.A government spokesman declined to comment, while a spokesman for the IDA, which has attracted most of the firms here, said the agency was studying the report but declined to comment further."

Interesting then to turn onto Techcrunch, which I think it's fair to say, one of the most highly regarded technology publishers to see their take on the Dropbox announcement. Guess what? They reckon it's about Tax. I've reproduced it here. 

 

Dropbox Follows The Tech Crowd, Opens Dublin Office — Says First European Office Will Be Hub For International Ops

Natasha Lomas

Dropbox has become the latest tech company to open an office in Dublin — land of Guinness and low corporate tax rates. Dropbox’s Drew Houston, co-founder and CEO of what is now a 100 million+-user strong service, clearly wasn’t watching the grilling the U.K.’s Public Accounts Select Committee gave Amazon and Google on the issue of corporate tax avoidance last month. Of course it’s the tax rates, not the Guinness, which lure so many tech companies to Ireland’s green and pleasant lands. Last year we reported that setting up a European HQ in Dublin would enable Twitter to lower its tax rate by 16 percentage points — reducing its tax payments by more than 60 percent.
Obviously Dropbox doesn’t make any mention of corporate tax rates in its Dublin announcement. Its release talks effusively about the local talent pool it will be tapping into in Dublin. “We’re delighted to be closer to millions of our European customers. By opening our international headquarters in Dublin and tapping into the large talent pool that exists there, we’re better positioned to serve even more people locally while we continue to grow,” enthused Houston in a canned statement. Ireland’s Taoiseach also chips in a few supporting words, flagging up the country’s “young, passionate and talented workforce”.
Dropbox said the new Dublin office, its first in Europe, will serve as the center of the its international operations — enabling it “to better provide technical support and product acumen” to Dropbox’s millions of European users, and presumably customers in other international markets such as Asia"


In other words, it's about tax. 

Interesting too that Techcrunch reckon that Twitter by being "based" in Ireland reduced their tax by 60% - an incentive indeed and yesterday I said that nearly 50% of Irish tax revenues, comes from US multinationals "based" in Ireland.

As Europe's largest tax haven, Ireland is coming more and more under the spotlight for facilitating what is, tax avoidance, technically legal as that might be.

This is going to be damaging as Governments across Europe, notably the UK, are beginning to decide that they won't stand for it anymore. And our friends in the US are onto us too.

And it's wrong that an Irish Government should be facilitating what is, lousy corporate behaviour - legal or not.

Whilst at the same time, terrorising its citizens to pay more tax.

Starbucks, Amazon, Google, Microsoft, WPP all in the news about tax avoidance through Ireland. And now they know it.

The British Government is to explore an internationally co-ordinated new tax designed to capture the earnings of companies like Amazon, Google but also Starbucks, according to The Telegraph. The particular focus is to force online companies pay more tax on sales they generate in the UK. Some use a variety of legitimate, but certainly questionable, ways of avoiding tax. In the case of Starbucks, for example, they apply fees from their Dutch parent to minimise their local UK tax.

And it's causing an outrage against the brand. 
And rightly so.

Activist Group, 'UKUncut' has announced a day of action (Saturday Dec 8) against Starbucks and these protests are aimed at bringing Starbucks to their senses or to put them out of business. One way or the other. 

The UK Government wants to close the loop that allows web companies avoid millions of pounds on tax and in fact, repatriate a lot of it to Ireland, the lowest corporation tax economy in Europe (12.5%), to avoid paying it locally. 

There can be little doubt at all now, that the heralded Irish Government investment plan is little more than a sham, based purely on tax incentives for multi-nationals locating here. In fact, it could be said that it's based on facilitating widespread tax avoidance across Europe, technically legal as that might be. But this is why Ireland's 12.5% tax rate is under European pressure.

Up to 50% of Irish corporate tax revenue may relate to taxes paid on income earned by US multinationals outside Ireland.

I once looked after The Industrial Development Authority (IDA) Advertising so I have a good understanding of their level of expertise.....and although, applauded by Government, the truth is beginning to come out. It's all about tax.

It has been often thought as bizarre, that for a country the size of Greater Manchester, Ireland is the European HQ for Google, Facebook, LinkedIn and others. It is becoming more clearer that when companies locate here, it facilitates their tax avoidance elsewhere, such as in the UK. Tax avoidance is of course, not illegal.

Indeed, even the very British Ad Group, Martin Sorrells's WPP (part owners of Dublin Ad Agency DDFH&B and Group M), had based itself in Ireland for tax reasons and shockingly, the company is now discovered to be actually Jersey registered. One wonders why it needs to registered in a small, tiny island like Jersey known really only for its "special" tax facilitation? Good reasons, no doubt.

Amazon is also shockingly, actually registered in Luxembourg, another famed principality for its tax shelters and discreet facilities. Amazon? THE American retail success? It had used Luxembourg VAT laws to its own competitive advantage for example, charging only 3% on an ebook sold in Britain whereas other booksellers had to charge 20%. That loop is now being closed and I've been a fan of Amazon, but it's just worn thin.

Google, with a staff in the UK of 1,300 books most of its revenue to surprise, surprise, Ireland. So it earns money in the UK but funnels it through Ireland. That's Ireland's great tax regime I mean that attracts companies like these in the first place.

Actually Google's "Irish" revenue is recorded as 12.4 billion. How ridiculous is that? Gross profit in Ireland in 2011 was recorded at 9 billion!! It's truly ridiculous. 

The whole tax avoidance is unravelling and more and more are beginning to understand the tax avoidance which Ireland has been facilitating against its European partners, and most notably, our biggest trading partner, The UK. So much of these investment decisions have been PR spun as being based on attracting business to what is said, a better educated workforce in Ireland, when in fact, they are simply decisions based on tax "incentives".

And the UK are not happy about it.

For example, Amazon, last year in the UK, earned 3 billion sterling in sales. But only declared 207 million of those as being from the UK and consequently, over the last three years has only paid UK tax of 2.3 million on total sales of 7.1 billion. Shocking undoubtedly, but it's being called immoral by many, albeit utilising legal tax manoeuvres.

Microsoft in 2005 were commented on in The WSJ for routing profits from Germany into Ireland. I mean it's actually funny that one Microsoft subsidiary called 'Round Island One Ltd', is actually based in a solicitors office and turns out to be one of Ireland's greatest companies. It has 9 billion in profits in 2004 and no staff. Not bad eh? And nobody has ever heard of it.

Google, paid UK tax of a tiny 6 million on UK revenues last year of 2.5 billion. Wow.

Ireland is helping them do that through "phantom" services.
Ireland is Europe's biggest Tax haven, followed by Switzerland.
And Ireland's tax schemes are now coming under the spotlight as it starts its European presidency from January 1st.

But more importantly, it's making the lie told by successive Irish Governments that Ireland was somehow an attractive base because of its workforce, its green fields, its beautiful scenery.

And it's wrong.
And we need to say it's wrong even if it's to our own detriment.

Microsoft's Windows 8. Not delivering? Key moment in the life of a one-time giant.

The critical launch of Windows 8 for Microsoft didn't deliver the key bounce it expected, or so it would seem. Reports on Mashable indicate sales are actually down - 21% against 2011 numbers, since the October launch. Whilst it doesn't include sales of their new Surface Tablet and of course, holiday sales are ahead of them, it's still not a good sign. Especially since it's more than three years since the launch of Windows 7.

The advent of Windows 8 was expected to lift the market and Microsoft are really needing that bounce. Although during the week, Microsoft have blogged that they sold 40 million Windows 8 licences, this raised eyebrows on the retail reality ground and without detail of those sales, it's not clear what it means. Some of these will have been sold to hardware partners initially rather than sold on to users; some of them sold into Microsoft's own stores; some have been sold at a low price initially, so what will happen when the price goes up; and so on.

Microsoft CEO Steve Ballmer (pictured) has said that their new Surface tablet sales have been "modest".

The PC market is of course, pretty dire at the moment anyway and one only has to look at HP awful numbers to see that, never mind Dell's continuing struggle too. The real growth here is in other multi devices (which Windows 8 does straddle to a point) and notably in business, a key Microsoft territory, where Executives now operate 2+ devices.

The PC issue explains why Microsoft isn't the power it once was. It had/has a monopoly practically, but in the wrong things.

Fundamentally too, having rumoured to have spent 1.5 billion usd on the Windows 8 launch, it hasn't had cut-through. Most of us are simply not aware of it unlike Microsoft launches of the past. So Marketing hasn't delivered I think.

The next few weeks will give a clearer picture but the retail buzz is not good and in that I'd trust. It is a critical juncture for the company, so we'll see.

In a lot of ways, make or break.

Samsung in the copying wars again. This time they're in court against Ericsson. They only have to lose once.

Fresh after Apple, Samsung now has another legal battle on its hands, against Ericsson. The Swedish company is the worlds largest marker of telecoms equipment and mobile infrastructure, going against the world's largest maker of mobile phones and is suing for breach of 24 of its patents. Ericsson say they re-invest about 15% of revenues annually in R+D so patents are real important.

You think it's a tradition in Samsung to copy? I wonder.... Have a look at The Samsung Commercial at the top of this blog and then the classic Apple Steve Jobs Ad that follows it (btw, voiceover is Richard Dreyfuss). Tell me it's not a copy? Please?

Samsung is the world's largest maker of TV's and cellphones but substantially lost a very similar legal battle to Apple in the US although won elsewhere, notably in Japan. It was claimed that South Korean Samsung, merely copied Apple designs and sold them for less. Samsung ended up paying Apple 1 billion usd and with all sorts of restrictions, following damages from patents on their mobile devices.

That Apple battle is still going on and now they have another with a company as large as Ericsson.

But South Korea doesn't have a rip-off culture? Or am I wrong there?

Ericsson is looking to block the sale of Galaxy phones, TV's, Cameras and Blue ray devices, so serious it considers the matter. If they won, all Samsung phones could be pulled from shelves. It's also a little bit more interesting because Samsung did ask Ericsson to renew licences at a much lower rate than competitors pay and Samsung say that it tried to strike a fair deal but Ericsson said no.

However, ongoing court battles like this against Samsung, have to take the sheen away from the brand which to be fair, has begun to dominate the world from nowhere. Their Galaxy 3 phone has sold more than 30 million units since its launch in May. They outsell Apple Iphones by 4:1 but they need to behave better. In this case, nearly two years of negotiation took place before the venture into court. 

Of course too, large techy companies will always be faced with continual court skirmishes - it goes with the territory - but Samsung seem to get into scraps more than most and it's mainly about copyright infringement. 

Samsung only have to lose once. Sure, fines they can pay but removal of equipment from retailers shelves will devastate the company and possibly finish it. You should never gamble with something that has the potential to collapse your company. 

Never.

Fantastic new online Business starts today. Fresh Dish. Home delivery of ready-to-cook meals instead of ready-to-eat ones.

'Fresh Dish' launch in the US today with 500k usd in seed capital as another food delivery business. But this one isn't about ready-to-eat-meals but rather ready-to-cook ones. Clever or what?

They can be prepared easily and quickly (under 30 minutes) and directed at those who haven't got time to cook for their family and yet want a real, healthy alternative to Pizza and Chinese. It also skips frozen food too because you get a good, wholesome healthy meal delivered to your door at lower cost than the traditional take-away. Meal for two about 24 usd, meal for a family about 32 usd. Delivery is free. And it brings you back to the dinner table. How bad?

Basically it's ingredients that are being delivered based on recipes prepared to top chefs, without the fuss so you feel you're "doing your bit". Nothing is frozen and everything is pre-prepared so vegetables arrive washed/diced for example. Fresh Dish have also spent time on getting their packaging right, keeping everything fresh for up to 50 hours.

It also saves you the trip to the Supermarket and the whole notion of meal planning. And they're encouraging you to show your dishes on Social - Facebook, Instagram and tweeting how you got on.

An App also shows video as to how to put things together.

Seems to me to be a pretty good alternative to the traditional take-away and a healthy idea at that. Ordering online is the perfect solution and an App just adds to the concept.

Another start-up that's taking business from Supermarket retail. 
Why didn't they think of this? 
Maybe they're just a little too comfortable.

Like an awful lot of big players, they're not getting digital.
And we know what happens then, don't we.

Black Friday and Thanksgiving online sales surge up again. High Street Retail sales go down. Online is the main channel for Retail now, no doubt.

In case you haven't heard, one of the biggest online retail days is Black Friday, driven by the Thanksgiving holidays in the US. The biggest is probably 'Cyber Monday', the Monday just coming up.

This year, online selling/buying has been up dramatically with most reporting an increase of about +23% and well over a billion usd. Without a doubt, the biggest day ever. Over 57 million Americans visited online retail sites on Black Friday probably trying to avoid that "shopping experience" you can see in the video above.

Thanksgiving day itself was up +32% online.

Black Friday gets huge prominence in the offline world as a big traditional shopping day so the growth of online may be people wanting to avoid the crowds. Or just simply, the ongoing dominance of online at a retail level - everything points to this becoming the preferred channel for all products and even growing at a grocery level. Black Friday ordinary retail high street shopping was DOWN this year by about -2%.

It seems that Amazon have done best, followed by Wal Mart, Best Buy, target and Apple. Amazon just keeps posting higher year-on-year growth rates.

Top growing categories were Digital Content and Subscriptions,followed by packaged goods, video games and consoles and general electronics. But the highest shopped segment was Apparel, in other words clothes, accounting for 25% of all dollars spent. And they said you could never sell clothes online. Never. Ha!

This annual surge is certainly one to which all online retailers should take notice and try to capture some of the activity through special offers or discounts. Remember it's a global world now and retailers need to take heed of things that happen internationally rather than just their local calender.

One thing is for sure. Online retail is going to dominate shopping, no doubt about it. And if you're in retail, you need to be online. Very few of the leading Department stores in fact are and so there's opportunity after opportunity for new start-ups to take that business.

It's just waiting to be done.

30 million views in a week. An Ad for the Railway on YouTube. Zero media cost. Traditional TV Broadcasters better look out.

Almost 30 million views in a week (250,000 likes), greater than the population of the country it came from - Australia. In fact it's an Ad but also a public service announcement and trust me, they're very hard to get right. 

This, you're going to love.

Now tell me a commercial can achieve that amount of views, almost all unique? And at a media cost of eh, zero, nothing, nada. Traditional Broadcasters need to watch out. This is real competition.

This commercial, broadcast onYouTube, of course doesn't look like a commercial, but rather a piece of animation with a very original, strong music track made to look like an informational piece. In fact it's an Ad for the railway and again, something I know quite well.

I looked after Irish Rail (Ireland's national railways) for many years and helped developed many campaigns including one quite well known called "We're not there yet but we're getting there". I also worked on many safety campaigns for the railway including one called 'Head Height' created by the great John Walsh which won many awards. But this viral for Melbourne Railway, is something special.

Called 'Dumb ways to die', it's a real clever way of showing you how to behave around trains and does so in an amusing (listen to the lyrics) and visually entertaining way. Ideal for the kids who notably get themselves killed around railway tracks - so it will save lives.

Created by McCanns, the soundtrack is being played at railways stations to remind passengers and railway staff are seeing something they're not used to - smiles. So good for them and good for McCanns and good for Melbourne Railway.

They deserve every award going for cracking something as tricky. I know, I couldn't have done it.

Entrepreneurshit. A great blog by Mark Suster, recommended to me. I recommend it to you. If you're in business, this is how it is.

I just don't do this. Never ever. It's like a golden rule that I'd never steal someone else's blog and simply cut and paste it as if it was my own. And now here I am, doing just that.

But it isn't. It's by a bloke called Mark Suster. This is him.

And before you say it - Nope, never met him, never even heard of him. He's a one time business starter-upper and now a VC which in itself is a bizarre turn of phrase. I don't like VC's but I like Mark. 

In fact it was on LinkedIn that I was recommended his blog by Gene Murphy, himself a serial starter upper. And so I read it and thought, wow.

It's a terrific piece about starting in business and how it all goes wrong and how it goes well. Ups, downs, all of that. It struck a "true-to-life" chord with me and brought it back to me (even there, that's something I've stopped doing. When I'd read words "in quotes", I used to put my two hands in the air and move my fingers like rabbits ears). Absolutely it was me. 

It's kind of like you've just discovered that someone else also has that rare disease that you have and you instantly bond. I thought that when I read Mark's blog and if you're in start-up mode, you should read it too. It's all here. Entrepreneurshit. Yep, that's what it should be called. And whilst I think of it, if you're interested in Advertising, another great title which is a must read for all of you who think it's glamorous, Jerry Della Femina's book, "Don't tell my mother I'm in advertising, she still thinks I'm a piano player in a brothel". Now read on....http://www.bothsidesofthetable.com/

Entrepreneurshit. The Blog Post on What It’s Really Like.

It’s 4.50am. Sunday morning. And I couldn’t sleep. I have much on my mind since I just returned from a week on the road. 5 days. 3 cities.

Late night Mexican food. Beers. Airports. Delays.

I left on a Sunday. I had to miss a full day with my family, camping in the mountains. I returned home Friday night at 10pm – too late to see my kids.

I’m reminded of this feeling. It’s all too familiar. It’s what life was like as an entrepreneur. I didn’t sleep much back then. I was on the road much and I internalized much of the stress so that others didn’t have to.

And so it goes again. I’ve been on the road much of 2012 and part of 2011. According to the SEC we’re not allowed to market the fact that we’re fund raising, so I won’t. But for some strange reason they make you file your progress on fund raising, which is the widely picked up by the press. Go figure.

So it is now publicly known that we have closed $150 million in our 4th fund. Ok, well, it’s more than this but I’m not allowed to tell you specifics.  I plan to write about it early next year when we’re all through. We have a little more to go until the finish line. It has been a fascinating experience. But now you know why I’ve had many nights away, many airports and much time on the road.

And why I woke up at 4.50am. But this is nothing like the stress of being an entrepreneur. As I’ve written about before, You’d Have to be a Big Baby to Complain about Being a VC.

What’s it really like being an entrepreneur?

That was the topic of my keynote at Seedcon, an event hosted by the University of Chicago, where I am a  graduate of the MBA program.

I like to speak about this topic with first-time wantrapreneurs because if you read the tech press every day you’d get the impression that it all glamor. It’s not.

You’d imagine that every founder was getting rich. Actually, positive outcomes for founders are quite rare. You probably follow some high-profile entrepreneurs on Instagram and Twitter and see conference pictures of them in Davos, Mexico, Monaco or wherever. You might be psyched out into thinking you’re doing something wrong for being in your shitty little windowless office. Clicking on their glam party pictures. You’re not. You’re where you should be.

There is a difference between a Conference Ho and a successful entrepreneur. But it’s hard to know that from the press. From the Instgram and the Twitter.

As a startup founder you rarely have much money in your bank accounts. Neither in the personal nor business account. That’s stressful enough.

I recently had coffee with a young friend who just finished his first startup. It didn’t end how he would have liked. But he learned. And he’s young. And I’m certain he’ll bounce back.

He told me,

“I have $6,000 in my bank account. Throughout the course of last year I never had more than $8,000 in my account. 

I want to do this again. But I have to be careful. Maybe I need to do slightly later stage.”

He probably didn’t know but he has more in his account than most Americans so there’s that. He had raised nearly $500,000 from investors. Many are well known. He shut down his company gracefully and even thought it must have felt like a crap sandwich doing so I’ll bet his reputation is still solid with his backers.

Think about it – most entrepreneurs who manage to raise seed money or venture capital usually raise enough money for 12-18 months maximum. Many times it’s less. So at any given point you are likely operating with a maximum of 9 month’s cash.

And yet you have to ..

• Recruit employees in the blind belief that the amazing job they’re quitting to join you will be worth it in the long run
• Sign up customers who are paying you money for a service you can’t 100% guarantee is going to be operational for the full period that they’re expecting
• Tell the press how great you are and hope that they aren’t publishing your obituary 9 months later rendering you a fool.
• Tamp down the enthusiasm your naive family has about your “impending IPO” (honey, when can we buy shares? Uncle Morty wants to know) from “your successful daughter” (we’re so proud of her! she’s so successful! we always knew she would be. she was so precocious in high school. that’s my daughter – did you see her mentioned in the New York Times!) Shit, ma, stop sayin’ that. I don’t want you to have to eat humble pie with your friends next year!
• Raise money. Need money. More money. Yes, please give me money. No, I don’t really know if I’m going to be able to return it. But without it I know I’m forked. I need it. So I’ll ask anyway and hope like hell I don’t have to avoid you at future cocktail parties. Quick – why don’t entrepreneurs celebrate when they raise money? Because they know that they’ve just signed up for much more obligation.

Early on in my first company I had an employee ask if it was a good time to buy a home. We had less than 6 months’ cash in the bank. I was pretty sure we were going to raise another round of capital. But not sure, sure. I mean you never know if your investors are REALLY going to keep backing you. And you can’t go around telling all of your employees your deepest insecurities about it or you’ll soon have no more of said employees.

Trust you? Yeah, I trust you. But why don’t you just give me the damn term sheet you promised so I can trust you even more.

You have secret doubts about your co-founder. She seems depressed. And she isn’t pulling weekends anymore like you are. I know, right? Total bullshit. She’s just not as committed as she once was. I don’t think she really believes any more. If I told my VCs would they then lose interest in our next round? Would they blame me? Would they back me or think I had gone off the rails?

So Facebook just announced that they’re going to compete with you. Apple announced that they’re shutting down your category. Salesforce.com just bought your main competitor. Your main competitor just raised $75 million and took all of the oxygen out of the room.

Far fetched stuff. If you’re not an entrepreneur. If you’ve been one for a while you know how much you fear every WWDC. Every F8. Or DreamForce. What announcements are going to crush you? [I wrote about what to do when this happens here.]

My biggest fear as an entrepreneur? I was worried that I was going to get married and be on the altar unemployed. “There’s my son. He should have been a doctor like his father!” Truthfully, that’s one of the things that kept me going. I didn’t want to disappoint.

I didn’t want to disappoint my parents. My wife. My employees. The press who trusted me enough to report on our successes.

I didn’t want to disappoint my customers. People seldom understand that when enterprise customers choose your software it isn’t just a purchase order. It’s a human being inside the buying organization who has trusted you. He went to his bosses and asked for budget. He beat down the other factions that wanted to choose your competitor. He has staked his reputation on a project to use the software of some shitty 2-year-old startup company because he believes! In you.

So you ask why on Earth being a founder is stressful?

No, it’s not as bad as working in coal mines. But it is quite the roller coaster and the stress is real.  Some people love roller coasters. Others prefer a smoother ride.

One of the most asked questions I get about being a VC who was formerly  an entrepreneur is if I ever miss being an entrepreneur? Do I ever want to go back to it?

Of course I do! How could you not want to go back to it. It’s addicting. It’s an adrenaline rush like no other.

I often answer this way:

It’s like sports. If you have a chance to be on court and shooting 3-pointers as the game clock is winding down OF COURSE you still want to be on the court. There is no comparable feeling from the sidelines.

Yet one day you wake up and you realize you can’t run as fast as the young guys. You can’t quite hit the 3-pointers as often. Yes, you have maturity that makes you a wiser player. But you realize that you can be more helpful as a coach.

And yes, I sleep better at night as a coach. And I’m happy as a VC.

Remember that if you choose to be an entrepreneur or to at least try – it’s stressful for everybody who does it. Your competitors have just as much angst as you do. You read their press releases and think that it’s all rainbows & lollipops at their offices. It’s not. You’re just reading their press bullshit. They have their secret doubts. And they’re in their offices reading your press releases and wondering why life is much easier for you. And they’re fighting with their co-founders and struggling to ship code on time.

As I like to say, “we’re all naked in the mirror.” We stare at our own imperfections. And then we go out everyday and see everybody else in their fine threads and wonder why it’s much easier for them.

Being an entrepreneur is about finding your inner self confidence.

• To be constantly told “it won’t work” but to keep plugging away anyways.
• To be kicked a lot and still keep standing.
• To hide your demons so that you don’t scare the bejesus out of your employees.
• To inspire others to join your cause when by all rational accounts they should not.
• And having the cojones to have them join you anyways. Pottery Barn rule. You hire them, you own them now. As in your responsible for these lines on their future resume. Don’t fuck them up.
• To swallow your stresses and insecurities and keep your optimistic game face on in the office. And on your home front. Maybe even try to believe it in your own head.
• It’s about wanting the right speaking slot at an important conference and hounding the organizer until he lets you do it.
• It’s telling your creditors that you need 60 extra days to pay. Please. Yes, most entrepreneurs will be nodding their heads right now. Not fun, hey? But that’s what it takes.
• Firing? Hell, get used to it. It’s a necessity. You better be good at it. Develop a thick skin for it. Not put off the difficult fires. You don’t have the spare budget to suffer fools. Hire fast, fire faster.
• Friday night in the office while others are at the bar. Sundays in the back of a plane. Center seat. Smelly dude next to you.
• Investor emails. They are forwarding you set another mother fucking link to an article about your competitors. And wondering why the hell are we not doing THIS like they are. Enough already!?! I told you not to worry about their move into Latin America. I promise you that won’t be a bit market for us. What? No, I’m not worried that they’re higher in the App Store charts than us. They’re paying for traffic. Paying I say! They can’t have a positive LTV on these downloads. You want me to throw around my money like that too, bro?

Hell, I send those emails. I’ll admit it.
Entrepreneurshit. It never ends. It’s not all glamor. It’s mostly not glamorous at all. It’s just something you have to do. Often because you’re unemployable. Your impertinence would get you fired in 2 days for telling your boss he’s a fuck wit. And it’s why you probably will quit on day 366 after the acquisition.

You’re unemployable. You’re an entrepreneur.

It’s not for everybody and you shouldn’t feel bad if you aren’t one of those that chooses this life. You’ll probably be healthier and wealthier. Despite the fact that only the Lotto winners get reported. Many more people play.

But if you do want to go for it, don’t wait. It doesn’t get easier later in life. It gets harder. You’re probably going to fail or have limited success. The math says so. So better that you try as young as you can when failure is easier to bounce back from. When you can wear it as a badge of honor.

I’m not ageist. I’ve backed several entrepreneurs in their forties. No problem. I’m just telling you that if you’ve never done it before and WANT to then the earlier you try, the better. That’s all.

Good luck. Enjoy the ride. I’ll be rooting you on from my far comfier seat on the sidelines. Secretly. Wishing. I were still in the game.

Online Holiday bookings in the US reports a surge. 51% buy holidays online now. If you're into travel, get online.

Com score, in its annual holiday retail data for online, is reporting a surge in spending on travel, online in the US.

In the first 18 days of November (the start of a traditional holiday planning season in the US, but not the peak which is more around Thanksgiving), 10 billion dollars had been spent on travel online. That's 16% up on last year. For the entire season, they're forecasting 43 billion usd an increase of +17%. A 4% increase was expected so it's way above.

It reflects really, a channel shift rather than a sudden boom in holidays. In other words, more people are turning to online booking - not that you didn't know it but it's now fairly proven with these numbers.

Gartner have already reported that 51% of holidays this year will be sold online. There's also a trend where 37% of people said they used their smartphone whilst in a retail travel store, to check prices and book online. I know, because I do exactly that in book stores. Basically shops are just becoming display counters for online shopping.

Amazon are actively pushing consumers into local stores to check things out and then buy online for example - a nice marketing twist.

Whilst these numbers are USA, there's no getting away from the trend. Travel will be bought online more and more and if you're selling holidays, you need to beef up that online presence - now. With numbers like 51% already booking holidays online, that will increase and there'll be very little left at retail level. The travel shop will simply not pay its way. And I've some experience here, having looked after the advertising for clients like Finnair, Stena Line, Panorama, Airtours, lastminute.com and so on, so I know their attitude to the web. And it's not healthy.

Interesting too, that for those of us who have booked travel online, such as flights only, with big airlines like Ryanair, Aer Lingus, BA, never hear from them. They have ALL your details and yet they never ever reach out to ask how you're doing, offer you an incentive or even just a Happy Birthday.

Yet they put their energies into lobbying about airport charges, thinking of new novelty (and offensive) ways to raise revenue and bitching about fuel hikes. When their real revenue opportunity is on their doorstep, at their fingertips.....

Email.

Hewlett Packard announce loses of 8.8 billion. Another old world company misses the bus.

Another sign of the times, HP (Hewlett Packard) have announced very bad numbers. Whilst most were expecting a profit of 2.2 billion usd, it actually was a loss of 8.8 billion. Its shares are in downward mode nearly at 2001 levels.

Like Sony, Sharp, Panasonic and others, HP is again an "old world" brand that is being killed by lack of innovation in the digital space.

Blogged here  http://streamabout.blogspot.ie/2012/04/sony-64billion-loss-and-death-of-brands.html and here http://streamabout.blogspot.ie/2012/11/sony-sharp-panasonic-brands-in-shocking.html

Acquisitions of Palm and Autonomy (which they paid nearly 80% more than the market cap at the time - 11 billion usd, last October) have gone badly. Last night they claimed Autonomy had overstated numbers and inflated values and to whit, they were informing the fraud office. The former co-founder of Autonomy, an Irishman, dismissed the claims and said the acquisition has simply been mismanaged by HP. However, either way HP didn't do their due diligence properly or are trying to divert attention following awful numbers. HP has shut down Palm. Those acquisition write-downs (5 billion) have contributed to these awful results.

But they do not account for the revolving doors of CEO's, constant management turnover and poor product design/marketing. Poor form too of Meg Whitman current CEO (and former head of Ebay) to blame past colleagues for the Autonomy purchase yesterday when it was approved by the overall Board who are still there. Nor the reductions in net revenue - which is where Whitman should be focused, surely. After all, it's the 5th straight quarter of decline.

Revenue in all its business units declined and most notably by -14% in its personal computing - the place where everyone else sees opportunity.

None of that has anything to do with Palm or Autonomy, now does it.

HP are now claiming that they're committed to "new products". A little after the horse has bolted don't you think? One analyst described it all as a "train wreck" on Reuters.com. The headline in the HP story on Wall Street Journal is, "analysts throw in the towel". It has become hard to read company expectations with results like this which are so much at variance from expectations. And the brand is just, well, boring.....and I used to look after their advertising once upon a time.

Whitman said today that they were "one year into a five year journey" but I'd except to see a lot of people stop travelling. Notably investors and you'll now see downgrades and sell/neutral recommendations.

So many times I've blogged and blogged about companies like these.
They just don't get the revolution that's upon them and don't get on board. With about 300,000 employees they've already planned to shed 27,000 whom deserve better which you can read here  http://streamabout.blogspot.ie/2012/08/hp-losing-27000-staff-and-9-billion.html

What a pity for what was once, a great company.

Coke on YouTube. Super campaign gets 3+ million views since Thursday. See it here.

You may have seen the Coke "happiness" 2010 on-street campaign where a truck dispensed cans of coke to passers by with something else to cheer them up - a football, flowers etc and filmed their reaction. Kinda' candid-camera but very effective.

Now they've done it again for the launch of the James Bond movie 'Skyfall' called 'unlock the 007 in you'.

Surprising in that it was in Antwerp in Belgium, the world's second most boring city after Brussels. Apart from giving out free Coke they also sent passers by on a "mission" to get something more - limited edition tickets. The public reactions were filmed and went on YouTube getting 3 million views since Thursday - another viral with 98% 'likes'.

As the public went to get their Coke, a violinist played the James Bond theme. As they were given tasks, various obstacles were put in their way. Told, for example, to "go to platform 6", a floor cleaner blocked their way or a girl called them by their name enthusiastically (if you know what I mean). A fruit seller spilt their oranges, or a group of joggers came up the stairs at the same time. You get the idea.

It's pretty effective in giving us a smile as well as a video to pass around to friends. Using too, its 53 million Facebook fans, it has an immediate way of spreading the word. By the way, Disney by comparison, has only a paltry 38 million fans on Facebook.

The video too, then turns viewers into Facebook fans itself - an additional 400,000 last week alone.

So all in all, a good way of using video on YouTube as well as social media. And doing a great job for the brand although I don't like saying it on behalf of a brand like Coke. But fair is fair.

It points to interesting ideas online and great promotional ideas as well as avoiding the cliched and done-to-death, flash mob. Please, enough already.

Relatively inexpensive too and that adds to the whole concept.
Good ideas don't have to cost a fortune and if it brought your brand 400,000 followers a week, how else could you achieve that except online. 

Engagement.

YouTube's online TV. 100 Stations reduced to 30 after one year. They are getting ready and will be the new global TV broadcaster. Have no doubt.

In order for YouTube to enter the broader world of broadcasting, it needed to encourage content suppliers and did so through its 100 "premium channels" concept. The intention was to encourage speciality programming which might compete with terrestrial television. 100 channels got 1 million usd each. "SourceFed" looks like the winner.

A year later in the 100 million usd experiment, it's about to pull the plug on 70% of the channels and withdraw funding from them. 

What YouTube have done is to look at the viewership levels, look at the cost, and then determine which channels give the best return. So out of a 100 channels, they reckon a year in, that 30 are doing the job effectively and 70 just haven't made it.

Some of them were of course, just crazy. Like the channel dedicated to Al Gore....but if they end up with 30 channels that are viable in terms of audience and cost, that's a result.

And a review like this makes sense further enhancing YouTube's reputation as being serious in the broadcaster space.

Some of the channel are getting 3-6 million viewers a week which no standard broadcaster can compete with. Online will bring in that level of audience so that even speciality programming can attract in huge numbers.

And are the traditional Irish broadcasters experimenting with YouTube? No. Are they experimenting online? No. They think that simply by rebroadcasting their daily content through an online player, is a strategy. It has become as ludicrous as that.

I've said it before, I'll say it again - TV broadcasters are getting stuffed online and as more and more devices that facilitate online TV come into the market, the more stuffed they're going to get. And they've not a clue. Not an idea as to what is going on.

Notably, as we move into a new era of connected devices, the manner in which we consume TV will change 100%. Not only the manner in that the devices will change (which frankly is insignificant although the traditional broadcasters seem focused on it) but rather the style in which we consume it.

The online audience will look for better, niche content which broad market broadcasters will not be able to supply. They don't have the expertise for Social media, the platform, the financial resources (more ads means broad content) nor the skills (just look at their Facebook pages alone. Shocking) and in particular, they lack the understanding. Mostly, they've been propped up by Government for too long so as no longer to have a real commercial bone in their body.

So with competitors like YouTube, who have all of those skills but just need to develop the content, which they are, it's a great opportunity for YouTube to simply own the space. Own the platform.

They're not there yet....but they are getting there.

Skype. 280 million monthly users. And it's getting a push from its owner Microsoft with new ad formats.

Skype, which is owned by Microsoft, has 280 million, monthly users. And it's growing at about 40% year on year.

Pretty terrific numbers and now they're going to push it further. Or at least it would seem that they're being pushed by Microsoft's Ad division by all reports.

It has unveiled Skype Apps for Windows 8 (you know, as in Microsoft's Windows 8) but it's pretty quick out of the box. They are also introducing new Ad formats that play on social interactivity. 

An example will be promotions that will appear during conversation streams (ads as you speak). Maybe you're talking weddings - up comes a wedding dress designer promotion.

It already carries ads on its home screen and it did launch 'conversation ads', display ads that appear when the user has no Skype credit, earlier this year.

Another plan they have is to create interactive conversations when two people are looking at the same thing. Say a hotel. We're both looking at it so let's have a conversation about it. 

Brands too will be able to create groups of like-minded talkers, which you'll join and then the brand can run content through them (such as video). Say you join the Ireland Group - you'll get ads about the country, stories etc. 

All a bit confusing? Sure is.... but by developing new and different formats, Skype may attract in brands who want to try something different. It's the nature of the Skype audience being visual, live and online, that's the attraction.

It's clever too in that the audience uses Skype for celebration - weddings, birthdays, christenings and so on that can bring a creative opportunity that's a bit novel. So you could have a brand enter the right conversation at the right time.

Generally Skype has done very well in numbers terms because the core idea is a great one. Despite that, it has a poor interface and shabby marketing, but it will get better and it would seem, it now has a new focus.

What's great about Skype is that it's a game-changer for telecoms and one of the classic online ideas.

It just needs a small push to own the world.
Which it seems, it's now getting.

You're being watched online. Google and Twitter report growing trend in Government requests for your data.

 

 
Google has just reported in its "transparency report" that Government requests for user data is growing dramatically.

In the first half of 2012, there were nearly 21,000 requests regarding 35,000 accounts. In 2009 it was 12,500.

There were 1,791 Government requests to remove data too this year which removed nearly 18,000 pieces of content. Google also claims to receive "falsified court orders" which they do not comply with although I'm not entirely sure what it means.

You can see it here  http://www.google.com/transparencyreport/

Twitter and Dropbox are also reporting a similar trend in Government requests. Twitter have said they comply with 63% of Government requests although in 2012, that amounted to 1,181 accounts, the vast majority inside the US. And they do inform users of these requests unless prohibited by law.

However, Twitters Government requests already in 2012 are more than the total for 2011. It has deleted more than 5,000 tweets because of "copyright" issues alone which could mask that details (such as reports) are being circulated freely and they could be removed because of "copyright". In other words, if you have a Government document, they can stop it being circulated using this method.

One topical example is that of an 'Occupy Wall Street' protester where a US judge has ordered Twitter to hand over his (Malcolm Harris) details. Which raises the matter of privacy.

It would seem that Governments are using Social Media as a monitor. In order to make these requests, they need to be watching. But it's inherently wrong that Google and Twitter should roll-over so easily.

Other publishers would generally rather go to prison than reveal their source. Whilst there is an argument in cases of say, rape or abuse, with which we all would agree that disclosure is useful, it does however, represent the thin edge of the wedge.

If you allow access to those cases, you have to allow it in all - such as the case of the Occupy Wall Street protester which is political, rather than legal. You restrict the freedom of speech which may be unpalatable to a Government and we know the role that Social Media has played in revolutions, positively.

It's either one or the other.
Comply with access or not.

By complying, it has opened a door for Government to watch you.

And that's not good politically, certainly. 

As was said once, I don't like you, I don't agree with what you're saying but I'll fight to death for your right to say it.

Microsoft Windows 8 President departs with "immediate effect". 10 bilion usd wiped off Microsoft's market cap. Another fine mess.

 

 
Microsoft is in the news again.

Following the "launch" of Windows 8, President of 'Windows', Steven Sinofsky resigned on Monday. He was the man who launched Windows 8.

The resignation came all of a sudden and his emailed letter said that he was leaving to "seek new opportunities" and no mention of love and support from Steve Balmer CEO. Clearly too, he didn't think that Windows 8 was one "new opportunity".

His email is at the end of this blog courtesy of Mashable. Although he goes on to explain that his resignation is nothing to do with anything at Microsoft, it's bizarre timing after 23 years with the company, having just launched their "make or break" Surface Tablet and Windows 8. In particular, it's with "immediate effect" and I'm in the business long enough to know that he knew the damage that would do to his beloved Microsoft. No one leaves like that and remains friends.

So there's more to this than meets the eye.

And the markets have given their view, wiping 10 billion usd off Microsoft's market cap. It's fair to say too, that one man's resignation shouldn't cost 10 billion and it wouldn't, unless the market view it as a deeper issue. Which in my view, clearly they do.

If everyone was still friends and part of the team, this departure would have been handled differently. Steven would have flagged his leaving some months back, a party would have been held to allow himself and CEO Balmer shake hands, staff would have been told in person rather than by mail and nothing would be with "immediate effect".

I have to say too, from a marketing perspective, the launch of Windows 8 passed without notice. Reportedly spending over 1.5 billion usd on the launch, it barely made or makes, the news. Are you familiar with the excitement of it all? thought so.

Microsoft will continue to be in trouble and the once glorious monopoly, is dying a thousand cuts. Somebody needs to do something.

 

With the general availability of Windows 8/RT and Surface, I have decided it is time for me to take a step back from my responsibilities at Microsoft. I’ve always advocated using the break between product cycles as an opportunity to reflect and to look ahead, and that applies to me too.After more than 23 years working on a wide range of Microsoft products, I have decided to leave the company to seek new opportunities that build on these experiences. My passion for building products is as strong as ever and I look forward focusing my energy and creativity along similar lines.The Windows team, in partnerships across all of Microsoft and our industry, just completed products and services introducing a new era of Windows computing. It is an incredible experience to be part of a generational change in a unique product like Windows, one accomplished with an undeniable elegance. Building on Windows, Surface excels in design and utility for a new era of PCs. With the Store, Internet Explorer, Outlook.com, SkyDrive and more, each of which lead the way, this experience is connected to amazing cloud services.It is inspiring to think of these efforts making their way into the hands of Microsoft’s next billion customers. We can reflect on this project as a remarkable achievement for each of us and for the team. Our work is not done, such is the world of technology, and so much more is in store for customers.
It is impossible to count the blessings I have received over my years at Microsoft. I am humbled by the professionalism and generosity of everyone I have had the good fortune to work with at this awesome company. I am beyond grateful.
I have always promised myself when the right time came for me to change course, I would be brief, unlike one of my infamous short blog posts, and strive to be less memorable than the products and teams with which I have been proudly and humbly associated. The brevity of this announcement is simply a feature.Some might notice a bit of chatter speculating about this decision or timing. I can assure you that none could be true as this was a personal and private choice that in no way reflects any speculation or theories one might read—about me, opportunity, the company or its leadership.As I’ve always believed in making space for new leaders as quickly as possible, this announcement is effective immediately and I will assist however needed with the transition.
I am super excited for what the future holds for the team and Microsoft.
With my deepest appreciation,

Google's Ad revenue in the 1st 6 months of 2012, exceeds all US newspapers combined. But newspapers can get into the driving seat.

In the first 6 months of 2012, Google generated more advertising revenue than all of the US printed newspapers. Combined.

Google generated 10.9 billion usd whilst newspapers and magazines, brought in 10.5 billion usd. Of course we are comparing all of Google's global ad revenue (as distinct from just the USA) so in some ways it's a "little" unfair. 

However, that's not the point - it's a trend (as I often say) that data like this gives us. And what it shows more and more, is the transition of Advertising spend online to the detriment of traditional media. In other words, advertisers are taking money from traditional media to spend online, they're not generating "extra" spend.

That's not shocking either, but the quick rise is. Google is 14 years old - traditional media has been around for hundreds.

It also shows a need for print newspapers to get on board the online ad train as quickly as possible and I have to say, in Ireland anyway, they are. Their online revenue will compensate for the loss in traditional revenue and again, as I've always said, the Internet is an opportunity for print publishers. The opportunity to compete with TV broadcasters. And print will win if they can just weather the storm.

This is not a trend that can ever be reversed. In fact, it will get stronger and so online advertising formats will begin to flourish to a greater extent. Therefore, media needs to develop them and quickly.

For newspapers, video is the answer. Pre-roll advertising allows them to compete against TV broadcasters for news/weather/sport/entertainment. And they will win advertisers whom traditionally didn't advertise in press, making the Internet, their greatest lifesaver...if they get it right.

Newspapers can break news before TV stations whom withhold their news for their lucrative evening ad breaks. First with the news, brings in the audiences and that will bring in the revenue. Newspapers are the new broadcasters. It's TV stations that are going to be in trouble.

And they don't know it.

Connecting Internet TV. Easy to do, saves a fortune (no more cable sub), greater choice and the licence fee goes. Not a bad day's work then.

In a recession, one way to reduce your costs is to switch from cable TV to internet or "connected" (as it's called) TV.

After all, the channels that you currently have are all online and about a million more. Plus you get your videos on demand (like Netflix), YouTube content, Facebook/Social Media, a music centre through itunes and a whole lot more. So it makes sense anyway - but when money is that bit tighter, now's the time to make the move.

What you do need is a good, strong internet connection which most of us already have and are paying for anyway. The better the connection the better the download speeds but generally things are improving all the time.

Next you need a "smart" TV. Don't have one? No problem. Most Blue Ray players and gaming consoles have this capability of internet connection but failing that, buy a streaming box (like a Roku box as illustrated circa 100 euro) in somewhere like Peats in Dublin. Easy to buy, easy to connect and job done.

It's as simple as that.

Some obscure programming is not online but that's more than compensated by what is and you'll just have saved yourself that monthly cable subscription as well as, the licence fee if you're in backward Ireland.

So internet connected TV makes sense economically as well as by choice. It's cheaper and better, which are the watchwords of Irish businessman, Denis O'Brien. Make it cheaper and better and it's a winner.

So a little trip to the electrical retail store to buy a streaming box (if you don't already have a connected device) and you're up and running.

It's going to happen anyway so you might as well get in first and impress your friends as well as save some money. And in Ireland, I'm guessing you don't have to pay a licence fee either? Why would you. After all you're using a computer not a TV and you're watching other stations rather than the national broadcaster, RTE. Because if you've choice, you'll move on.

So does this mark the end of the licence fee? I can't think why it doesn't. Apart from anything else, you'd have a monitor on your wall and a laptop - not a TV in sight. So it would be impossible to police. Maybe RTE would like to correct me?

Another saving.

Is this the start of the end of licence fee income?
It's sure going to have a massive impact on viewership.