Ambassador Luis E. Arreaga – Sponsor Profile

Ambassador Luis E. Arreaga has been a big supporter of Startup Iceland. When I decided to organize this conference, I reached out to the US Embassy in Reykjavik and ask them to help in the effort. The US Embassy in Iceland has done more than that and Ambassador Arreaga’s leadership is cleary demonstrated in their participation and sponsoring the event. For those of you who have not followed the Ambassador’s Blog, yes, the Ambassador blogs about his experience of being in Iceland. How cool is that? When I reach out to him and ask him to help, he always tells me “I cannot promise you anything, but we will give it our best effort” so far the efforts have been fantastic at least from the Startup Iceland Conference perspective. The US Embassy in Iceland was the second Sponsor after Icelandair. The sponsorship was awarded through a Federal Assistance Award by the U.S. Department of State. Applying for the grant and ensuring all the relevant information is filled out is a lot of work and the Team in the U.S. Embassy did a great job and got us the Sponsorship… it allowed for the ticket prices to be discounted so that all students, young startups and entrepreneurs can participate in Startup Iceland. Once again there is a lot of leadership within the Community here in Iceland, I have always maintained the Embassies can play a critical role in bridging the gap between the Island of Iceland and mainland, which is something all entrepreneurs need to start thinking about when you are launching a business. In addition, this comes back to my perspective that there is no local business anymore all businesses are Global because we live in a globally connected world. Those entrepreneurs who realize that take advantage of the fantastic opportunities that exist in Iceland to solve the Global challenges are making a difference in this world. This blog post is filed under the category of Sponsor Profile, I am doing two series related to the Startup Iceland Conference Category:

  1. A Speaker Profile
  2. A Sponsor Profile

Although the Ambassador will not be a featured speaker in the Conference he has graciously agreed to introduce our two main guests Brad Burnham and Brad Feld before their session in the Conference. The Ambassador will say a few words about the importance of Entrepreneurship.

His Excellency Ólafur Ragnar Grímsson – Speaker Profile

First of all, I want to bring attention to the fact that no where in the world could you get a chance to meet the Head of the State or get access to the Head of State‘s office. I sometimes feel Iceland really does not appreciate what a fantastic Ambassador and spokesman His Excellency Ólafur Ragnar Grímsson the President of Iceland is. He is generous, magnanimous, extremely smart, very well read and commands respect of World Leaders. In addition, I sincerely feel he is one of the biggest supporters of Entrepreneurs and the young generation of Iceland. He has taken the time to visit almost all of the prominent startup companies, he takes the time to understand what they all do and speaks of them in every opportunity he gets on the World Stage. As the famous saying goes, with great power comes great responsibility and I could not imagine anyone handling it better than His Excellency. When I approached him and requested his audience to talk about Startup Iceland, he was generous with his time, he was so interested and gave many ideas on how the conference could be implemented and encouraged me. That in my perspective is Leadership. Remember Leadership is communicating to people their worth and potential so clearly that they are inspired to see it in themselves.  He believes in every Icelander… no every human being to do the right thing and build a sustainable world, he understand the vast potential that exists in Iceland and maybe sometimes has gotten into trouble for talking about it publicly. As I said, with great power comes great responsibility. I am a BIG fan as you can see from the post so far, when he agreed to open Startup Iceland, I knew I was on the right path. I am excited to have him as one of the speakers and I am excited that all the young entrepreneurs coming from all over the world will get a chance to listen to his wisdom and leadership.

Island of Recovery

There is a front page article on the Wall Street Journal with the title “In European Crisis, Iceland Emerges as an Island of Recovery“. Let me be very clear, I have nothing against Fishing or Fisherman or the seafood industry. I know and understand the industry quite well, worked a lot in it when we were expanding the Seafood Banking activities of my former employer. I actually think that industry is very ripe for disruption. However, I really don’t believe the future of Iceland is going to be based on Fishing or Aluminum or manipulating the Icelandic Krona. I know this because I have seen the future, I have been working with Entrepreneurs and Startups in Iceland for the past 3 years and none of them are looking into doing anything with Fishing or Aluminum. Even the article above and the video shows that most of the people employed in the fish processing plants are workers migrating to Iceland. They are low skilled labor workers. The same will be true for Aluminum based development, putting up another smelter is going to require low skilled labor that is going to leave once the smelter is setup. I categorically reject the notion that these sectors are going to save Iceland and the recovery that is being witnessed has nothing to do with Fishing because there has no real value creation because it has been artificially manufactured due to the Currency Controls on the Icelandic Krona. Iceland has fantastic infrastructure for Software based companies, excellent uninterruptedrenewable green energy, entire country connected with Broadband and Mobile 3G network, young population that embraces new technology, relatively affluent, well educated… now the last mile in Icelandic households are being fitted with Fiber optic cables. I know a bunch of companies just rented a big house and are building code in the living room and bunkering the bed rooms. There is a grass root movement on this that is not obvious to the mainstream media, I met a couple of Linux hackers who have moved from New York City to live in Iceland because they think that the living standards are much better here and real estate is affordable. Check out the 3G access provided by the largest telecom provider in Iceland, practically every livable area is covered. I could actually hook a 3G sim card to my laptap and drive around Iceland and code… where in the world can you do that? The infrastructure that has been invested in Iceland is fabulously under utilized.

So where is the real value being created? I have written about how Software is eating Fish and Aluminum. I continue to bet on that fact that high value software related companies are going to disproportionately create more value than Fishing or Aluminum ever did. This has been proved many times, the factor input cost of Software based companies is mainly variable cost, there is no big capital expenditure this allows for better bootstrapping and selective investment that creates better margins and better value. With the advent of Internet and Mobile phones as distribution mechanisms the scale to distribute and sell software is extremely beneficial. The same is true for Design, however given the merchandising the retail attached to the Design it is hard to scale the sales, once again not the case in Software based companies. Especially those that are leveraging the new infrastructure of Google, Facebook, Apple, Twitter, Pinterest, Amazon, iOS and Android. I really don’t believe Iceland has a competitive advantage when it comes to manufacturing physical goods, it has to be goods that can be transported over a wire… so Movies, Music and Software. Did I not write that Sound and Mobile is going to be next disruptive platform?

Next Killer Mobile App

I have always maintained that the killer mobile app of the Internet was Email. I know it is not cool but it is by far the most important backbone of communication channel. Email has become the infrastructure utility of the Internet. I think if one looks back the most prolific usage of a mobile application which resulted in creation and catapulting of Blackberry to super startdom was the email. I remember the time when we used to carry two mobile devices, Blackberry for email and a mobile phone for voice. Blackberry really came up with the solution by solving the two devices problem and that made them the de-facto device for the business professional. When I started my career with Ernst & Young, we had an intricate communication system called the E&Y Voicemail. It was a voice messaging system that you can use with any phone, you dialed into a standard number punched the 4 digit code of the person you want to leave a voicemail for and voila you did. It was used extensively within the company as the main communication channel when email was not sufficient. I wonder if they still use it, I know that all the Big 5 Accounting and Management Consulting companies had their own way of doing this asynchronous voice communication.

The motivation and idea to write this blog post came to me while I was reading a paper written by ANDREW ODLYZKO with the title “The Volume and Value of 

InformationWhat is interesting in this table is that voice minutes have more or less plateaued, however Text messaging is exploding. This is not anything new and the growth of Twitter and 140 characters is a useful trend and it is the basis for the Texting communication. I have written about why I believe Voice and Sound are going to be next big thing. The idea for a killer app, I am sure there already exists one for voice messaging. You limit the size of what can be said with a simple interface and that voicemail gets delivered to any device of choice actually to all the end points of communication to the individual you want to communicate to. The author of the above paper alludes to such an app:

Human culture is largely oral, after all, and the huge revenues of voice telephony testify to the utility of voice communication. Voice messaging could provide a nice hybrid between the traditional telephony and email/texting, one that even illiterate people could use. Some voice messaging is taking place, but in clumsy forms, and what is needed is something really simple, such as a button on a handset that a person could press to ensure that after the called party number is dialed, a message is recorded and deposited directly in a voice mail system.) Or are there other social communication changes that are playing a role? However, the advantage of mobility that wireless offers is undeniable and may have implications for Internet traffic growth rates.

There you go, the next killer app of course the app becomes a killer app only when there is enough uptake to make the network effect work. Think of Instagram for Voice. I think some the text message startup that are out there could be the natural extension providers for this application. I am going to propose this problem when we have a hackathon in Reykjavik University on May 29th as part of Startup Iceland Conference to be hosted in Andrews Theater in Ásbrú Enterprise Park.

Related Links:

GreenQloud – A Startup Profile

I have been following GreenQloud for almost as long as I have been looking at Iceland for startups. I met with Eirikur Hrafnsson one of the founders of the company almost 2 years back. GreenQloud is a Infrastructure, Platform and Software as Service company. The company sells storage, virtual machines for processing and bandwidth to those who don’t want to bother with the hassle of setting up their own infrastructure. GreenQloud competes with all the hosting service providers including Amazon Web Services. The competitive advantage of GreenQloud is that the infrastructure that runs GreenQlouds offerings is based on 100% Sustainable Renewable Green Energy. Having its headquarters in Iceland makes it much easier. The need for sustainable power to run the infrastructure of Internet Service companies is a growing need and not all countries are equipped to make the transition.

In addition to the companies need, consumers are becoming self-aware and want to have an option to choose which infrastructure will run their services. I have written a lot about of data centersand why I believe the Sustainable Energy is not the only reason that big data center consumers buy services. Cost is a important factor and it is an established fact that Iceland provides cheap renewable energy, that is the main reason all the major Aluminum companies have their smelters located in Iceland. I believe the team at GreenQloud has done a couple of things that I believe makes it easy and convenient for companies to make a choice to switch to their services without much headache. GreenQloud’s Application Programming Interfaces (APIs) are compatible with the industry standard AWS EC2 (Compute Qloud) and S3 (Storage Qloud) APIs. This makes GreenQloud automatable using numerous third party tools and Software as a Service solutions. The standard AWS API tools work out of the box making GreenQloud a truly green drop-in replacement for AWS. There is a lot of movement by major players like Google , Facebook and Microsoft to “Green” their data center and production facilities.

Is there a HP or Fairchild Semiconductor of Iceland?

Old HP Stock Certificate

Fred has a very interesting post about the Darwinian Evolution of Startup Hubs, it is very poignant and relevant for Iceland. I think there are a couple of things of note in that post. First is the evolution of the companies themselves, if you look at them closely they resemble the hardware to software stack in the technology development cycle. I have written about this before, I believe the next wave of companies that are going to generate wealth are those that are building things on top of the new infrastructure of Google, Facebook, Amazon, Apple iOS, Android, Twitteretc but this cannot happen in Iceland without the ecosystem that Fred is talking about.

Creator of first semi conductor

I have always felt that the first wave of entrepreneurs and those who created disproportionate wealth in Iceland have just not plowed enough of that back into the system to create the new seeds. In order for the ecosystem to thrive, there needs to be a evolution of industries just like what happened in Silicon Valley and much like -what is happening in New York and other places. The comments section of for the above post has very interesting discussions for example the location of Toronto is considered and how RIM has not created a new wave of companies and teams. I believe in addition to the 7 things that I wrote about earlier, it is important for the previous generations of a community to contribute time, money and wisdom into the next generation to create a fledging ecosystem. Silicon Valley is the envy of many regions because the entrepreneurs who started there continue to plow back their money, time and wisdom into Silicon Valley. That in my opinion is one of the secrete sauce of Silicon Valley. Why is this hard to replicate in other places? Who knows? At the least we know one things about Icelandersthat they always come back and I hope that they will invest their talent, money, time and wisdom back into the society that they come from not into the usual suspects but into value creating companies of the future.

Be on the Bus With Brad

For those of you who have been following the development, organization and planning, setbacks and triumphs around organizing the Startup Iceland Conference know the reason why we moved the venue to Andrews Theater in Ásbrú Enterprise Park facility.

We are planning to make this a FUN event, so Brad Feld has agreed to do a Road Trip. We are calling this event “Be on the Bus with Brad“, what we think is going to be cooler is that will be roped into the bus ride and all participants can stream their experience of interacting with Brad Feld onto the Live Project platform to share with their friends who could not make it to the Event. In addition, we are planning to provide the access to to all participants so they can capture their experience the entire time. On the way back we are planning to have a FUN Guitar Party… The team from has agreed to make this a fun, musical trip back to Reykjavik. Of course I am happy to get more suggestions on how we can make the trip to and from Keflavik fun. If you want to ride on that bus, you need to register for the Conference and let us know in the registration notes section that you want to be on the bus. For those who have already registered we will be sending out our email updates with instructions on how you can book your seat on the bus.

For those who think driving 40 minutes is a waste of time, having 40 minutes with Brad and interacting with him and listening to him maybe Rap or maybe dance or perform the top 10 single “I’m a VC“? and others interact is going to be a lot fo fun. There are so many questions one could ask and get wisdom of 25+ years in Entrepreneurship, Investing, Venture Capital formation etc. In case you don’t know Brad is a Voracious Reader, check out his book shelf… so it is highly likely that he has read more books than you and I and everyone in the bus put together. I just want to find out how he manages to do that. Would’nt you?

2 Rules to manage your cashflow

I have agreed to write guest posts in the Personal Finance Section in I wanted to write about this because I feel our education system i.e Schools, Universities, homes etc do not teach Financial Management or how to manage money. I am not claiming to be an expert about this but if one wants to learn this well and ride through ups and downs of startups, every career, profession etc there are some basic rules and habits that are universal and timeless. I really don’t believe that this advice is exclusive for young entrepreneurs or startups, I have seen successful professionals who are poor money managers and all those people who win the lottery and are homeless in a very short period to time.

I want to start with a story, I was a money manager when I was 8 years old, yep you heard it right. My dad was a horrible money manager, on the other hand my mother was excellent, given that my dad was the bread winner in the house hold and the fact that he was an entrepreneur we never had a steady stream of monthly cash flow. For as long as I can remember while I was still living with my parents, we never had money i.e we never took vacation, we never owned our home, never bought gifts, did not live a lavish lifestyle or anything like that, I could see my mom always struggling to make ends meet. I always wondered why is that, I used to get cash gifts whenever I did well in school and I always saved that money and there were times that I had to bail out my mom with some emergency expenses. It was a strange feeling to be 8 years old and still have a habit of putting money away for a rainy day when your parents could not. The story is that I understood why that was, it was because there was no planning in my household. My mom was very disciplined in writing accounts, keeping record etc and my dad never once looked into that and his business went bankrupt a couple of times. He felt the problem was out there and had nothing to do with him being a poor financial manager. He always felt that Money Management in his business was his Auditors problem. I never understood it until I started learning about business and financial statements. My dad was nothing like the Poor Dad from the book Rich Dad Poor Dad, he ran his own business but never took the time to learn financial management. I think there is nothing more important than understanding one’s finances, this goes for individuals as well as young startups or businesses.

The first advice every personal finance section gives is “Don’t use Credit Card“… duh! I think it is very easy to spew advice when you are not the one facing the challenge. I think the fundamental question one needs to ask is Why am I forced to use my Credit Cards? and invariably the answer is straight forward… Cash Flow Management. What do I mean by cash flow management? All the business books, wikipedia, and every resource out there on the web de-personalize this “thing” called Cash. I want to make it real. Here is a definition from Wikipedia… I want to throw up when I read this, can you make this more boring?

Cash flow is the movement of money into or out of a business, project, or financial product. It is usually measured during a specified, finite period of time. Measurement of cash flow can be used for calculating other parameters that give information on a company’s value and situation. Cash flow can e.g. be used for calculating parameters:

No wonder no one wants to learns this stuff. How do we make this fun? well, Robert Kiyosaki has done just that he has created a game called CashFlow 101. It is a good way to learn how to manage one’s cashflow. Cash flow is a very simple concept, how do you generate cash and what you do with the cash you generate. Usually, you resort to using credit card when your cash expenses are greater than your cash income. I believe educating oneself in the cash generation and cash spending activities is key to discipline in cash flow management.

So what are the 2 rules of cash flow management?

Rule 1: Don’t spend more cash than you make, if you don’t make any cash figure out a way to make cash. That is a life lesson, figure out the need in the market and find a way to fill that need, when you do that usually you get compensated with cash.

Rule 2: Refer to rule 1.

It is that simple and common sense. But you see common sense is not common practice and doing the simple stuff is the hardest.

Dr. Ted Zoller – Speaker Profile

I met Ted in Netherlands where I was participating in Meet the Dragons event. Where there were startups from 8 different European countries who were presenting in front of panel of investors, very nicely termed as Dragons. The event was built on the concept of the popular UK TV show Dragon’s Den. Ted was not a Dragon, but he was representing Kauffman Foundation‘s sponsoring the Global Entrepreneurship Week in 2011.

The Ewing Marion Kauffman Foundation was established in the mid-1960s by the late entrepreneur and philanthropist Ewing Marion Kauffman. Based in Kansas City, Missouri, the Kauffman Foundation is among the thirty largest foundations in the United States with an asset base of approximately $2 billion.

Our vision is to foster “a society of economically independent individuals who are engaged citizens, contributing to the improvement of their communities.” In service of this vision, and in keeping with our founder’s wishes, we focus our grant making and operations on two areas: advancing entrepreneurship and improving the education of children and youth. We carry out our mission through four programmatic areas: Entrepreneurship, Advancing Innovation, Education, and Research and Policy.

For those of you who don’t know about Kauffman Foundation here is short video about the Foundation:

Ted Zoller is president of Kauffman Labs for Enterprise Creation and vice president of entrepreneurship at the Ewing Marion Kauffman Foundation. He is the founding instructor of the “Launching the Venture” course at the Kenan Flagler Business School at the University of North Carolina at Chapel Hill, where he is on the faculty.

As a practicing entrepreneur and an experienced educator, Zoller collaborates with Foundation leaders to advance entrepreneurial activity. At Kauffman Labs, a program of the Kauffman Foundation, he leads major initiatives designed to develop the next generation of entrepreneurs. Kauffman Labs experiments with new ways to launch high-growth businesses and subsequently expand local, regional and national economies. The Foundation continually works to advance entrepreneurship education and training efforts, to promote entrepreneurship friendly policies, and to better facilitate the commercialization of new technologies by entrepreneurs and others, all of which have great promise for improving U.S. economic welfare.

Zoller concentrates largely on the formation of new companies. In his classes, he teaches students the fundamentals of dreaming up, designing and developing business models for new ventures. As part of Zoller’s “Launching the Venture” course, students actually start ventures that contribute to their field and their community. Students from across the university, including UNC scientists, with ideas for new ventures learn how to write business plans. They also mix with entrepreneurs, venture capitalists and other experts with the skills to make things happen.
Program participants have launched a wide range of new ventures. These range from leading-edge business ventures to transformative social ventures. Zoller cites the example of Asklepios, a firm that’s the brain child of the director of the UNC Gene Therapy Center. The new firm is now developing the only known therapy for a type of muscular dystrophy.

Ted is a speaker, and he is doing some interesting work on how Entrepreneurial Ecosystems thrive. Check out his talk in Stanford University. Ted has become a friend, he is a leader and really wants to understand how he can help in promoting Entrepreneurship. I am excited to see him come to Iceland and share his wisdom and experience.

Brad Burnham – Speaker Profile

Brad Burnham and Fred Wilson started Union Square Ventures in 2003 after the destruction of the dot com bubble. I can only imagine the courage, insight and vision that they had to create a Venture Capital company focused on the Internet when everyone was running for the hills when you mentioned technology. Brad is a veteran, it does not take a lot to see the wisdom and leadership he continues to demonstrate. Check out this post by Fred Wilson about how the investment thesis that he and Brad created required discipline and this post describes why they picked thesis driven investing vs thematic investing and Fred always credits Brad for sticking to the thesis, that requires discipline, dedication and wisdom… Brad has plenty of that. I am extremely excited that Brad agreed to participate as a speaker in the Startup Iceland Conference on Building Sustainable Startup/Entrepreneurial Ecosystems. Brad and Fred live in New York which was not known to the technology or the Innovation hub, however they have invested in companies like Twitter, Tumblr, Four Square, Etsy, Kickstarter, Zemanta, Zynga, Boxee, Duck Duck Go, Sound Cloud etc To get some glimpse of his wisdom, just read his post on Freedom to Innovate

Innovation depends on keeping the costs of innovation down, making sure that financing is available, and making sure that markets are accessible. It does not depend on R&D grants or targeted industrial policy. 

So the next time you see a piece of legislation that has an impact on an open Internet, software or business method patents, copyright enforcement, free and fair competition, open government, or cyber security, I urge you to see it through the lens of the competition between incumbent industrial hierarchies and emergent networks.

Consider who is sponsoring the legislation. Does it really protect consumers or does it protect the business models and cost structures of the incumbents?

Brad blogs in the USV Blog and also has a Tumblr Blog. One has to read through all the posts to understand the evolution of the thing we call the Internet. Brad has been a participant through out the entire short history of the Internet and he has incredible insight and wisdom about the Internet. He visited Iceland 3 weeks back and the reason why he is here is something that I blogged about.

Early Days

Brad Burnham began his career in information technology with AT&T in 1979. He held a variety of sales, marketing and business development positions there until 1990 when he spun Echo Logic out of Bell Laboratories. As the first AT&T “venture,” Echo Logic was a catalyst for the creation of AT&T’s venture capital arm, AT&T Ventures. When Echo Logic was sold in 1993, Brad joined AT&T Ventures as an Executive in Residence. He became a principal at there in 1994 and a General Partner in 1996. At AT&T Ventures, Brad was responsible for 14 investments including, Argon Networks, Audible, Avesta Technologies, Classic Sports Network, Multex Systems, Physicians Online, and Paytrust.

Brad is not much in the public eye, but his words are enough. I am excited to hear him talk about how they started in the early years in New York and what made New York the next best thing to Silicon Valley in terms of Innovation, Technology and Entrepreneurialism. Brad himself being an entrepreneur can relate to everything all of us go through as Entrepreneurs. I believe the best learnings are when you do something, the next best thing is to learn from someone who is currently doing it. Brad falls in the latter category and I cannot wait for May 30th. For those of you who have not registered yet for the Conference, you can do so by going to -> BOOK NOW