Archive for ‘Uncategorized’

May 16, 2014

Startup Iceland 2014 Hackathon – What the Hack?

makerbot_wiredHackathons are a timeboxed meetup to build and make something valuable. The Startup Iceland Hackathon is scheduled at Reykjavik University on May 31st and June 1st, did I mention there is a $1000 price money for the best hack. We provide the space, refreshments like Pizza and Caffeine drinks (yes, you will be working through the night) So who can participate? anyone! yes, anyone… and it is free to participate. Have you always had an idea that you just did not take the time to build? bring a couple of your friends and/or partner and form your team and create away. We have seen some amazing things being build within 36 hours during the past two hackathons.

Hackathons usually have a theme and this year’s theme for Startup Iceland is 3D Printing, Mobile and Wearable Computing. We will have two 3D Printers and a bunch of people to help you and make something. There is a maker in all of us, it could be software for the mobile platforms. Have you always wondered how these things get build, just show up and see how small teams come together and build things. We are really starting to see a Maker and Builder culture created in Iceland. You can see that when you walk downtown, there is so much street art and going to the Icelandic Academy of Arts I see so many students who are so creative. What if we could harness all that talent, timebox it for 36 hours, make sure the teams that show up have the tools they need, for example the 3D Printers, Cloud Computing Platform like GreenQloud and companies that are already doing this showcase some of the problems that they are facing and release an API (Application Programming Interface) so you can build something using that.

In addition to that the Guests who are coming to share their ideas in the Startup Iceland Conference are going to be mentors/helpers during the hackathon. If you want to get to know them and learn from them then this is the best 36 hours you can use. BTW, did I mention that Bre Pettis the keynote speaker and founder of MakerBot has been on the cover of the Wired Magazine? Do you want to see how the machine that he has build is changing the world? Register and show up for the Startup Iceland 2014 Hackathon.

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February 17, 2014

Leadership Lesson # 3 – Aspiring to be a Level 5 Leader

English: Abraham Lincoln, the sixteenth Presid...

English: Abraham Lincoln, the sixteenth President of the United States.(Photo credit: Wikipedia)

I have written about the book Good to Great by Jim Collins, it is one of those books that profoundly changed my perspective on how to build teams and companies. One of the key items that Jim Collins and his team talk about in the book is the presence of a Level 5 leadership in every company that went from just being Good to Great and accelerated their growth trajectory and left the competition in the dust. So what does it mean to be a Level 5 Leader you ask? Well, one thing that always stick to my mind when I think about the Level 5 leader is, when there are problems or issues in the team or company the Level 5 leader always looked into the mirror to see what she should do differently or work on herself to solve the issue. On the other hand when the team was winning and really starting to see success, the Level 5 leader always looked out of the window to the team and always gave all the accolades to the team. I think this is a very important quality of a servant leaders.

It is difficult to be a Level 5 leader, let me give you some excerpts from the book to highlight how a Level 5 acts.

Humility + Will = Level 5

Level 5 leaders are a study in duality: modest and willful, shy and fearless. To grasp this concept, consider Abraham Lincoln, who never let his ego get in the way of his ambition to create an enduring great nation. Author Henry Adams called him “a quiet, peaceful, shy figure.” But those who thought Lincoln’s understated manner signaled weakness in the man found themselves terribly mistaken — to the scale of 250,000 Confederate and 360,000 Union lives, including Lincoln’s own.

It might be a stretch to compare the 11 Level 5 CEOs in our research to Lincoln, but they did display the same kind of duality. Take Colman M. Mockler, CEO of Gillette from 1975 to 1991. Mockler, who faced down three takeover attempts, was a reserved, gracious man with a gentle, almost patrician manner. Despite epic battles with raiders — he took on Ronald Perelman twice and the former Coniston Partners once — he never lost his shy, courteous style. At the height of the crisis, he maintained a calm business-as-usual demeanor, dispensing first with ongoing business before turning to the takeover.

And yet, those who mistook Mockler’s outward modesty as a sign of inner weakness were beaten in the end. In one proxy battle, Mockler and other senior executives called thousands of investors, one by one, to win their votes. Mockler simply would not give in. He chose to fight for the future greatness of Gillette even though he could have pocketed millions by flipping his stock.

Leadership lesson 3 is to aspire to become a Level 5 leader. I aspire everyday for this. The critical thing is humility and always building and putting the team ahead of your personal victories. Every Level 5 leader in the Good to Great companies had built such a great executive team that there was no dearth of leadership when the Level 5 leader left the organization. That is the best legacy that any leader can build, make yourself dispensable by empowering the team to make tough decisions and lead each other.

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January 15, 2014

Continuing the Hospitality Theme – Seattle and Buuteeq

Forest Key, the CEO of Buuteeq giving an introduction to buuteeq and also talking about Company culture. We were one of the early investors in Buuteeq and it is exciting to see them go from strength to strength. Buuteeq also moved into a new office and they have over 120 employees worldwide. A great story and we are always pumped to support Entrepreneurs like Forest and his co-founders.

Seattle Waterfront with Space Needle

Seattle Waterfront with Space Needle (Photo credit: jcolman)

I really like Seattle and for those of you who are curious, Seattle is a sister city of Reykjavik and there is a direct flight connection from Iceland to Seattle. GreenQloud announced late last year that we will be establishing our first availability zone outside of Iceland in Seattle, because of the sustainability emphasis in the city. Forest has been a good friend and a mentor to me personally, giving me ideas and tips on being a CEO given that I am a rookie CEO at GreenQloud.

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January 14, 2014

Travel, Tourism and Hospitality in Iceland

After a long break, I am back to blogging on a regular basis with this post. I took a sabbatical on email during the Holidays tried to limit my responses and answering emails, I will give myself a 0.4 on a 1.0 scale i.e I was 40% effective. I wanted to write about the explosion in tourism, travel and hospitality in Iceland and how that is giving rise to a number of startups. I spectacularly “tried” to predict in 2011 that tourism in Iceland would go down… wait for it… in a Tourism Conference. Yep, thats right but the number of tourist coming to Iceland has not only been increasing it is actually increasing at an exponential rate. My former employer Islandsbanki has a research report that comes out everyday and they wrote about Tourism a couple of days back and according to their report, the year-over-year increase in the number of tourist visiting Iceland has increase 21%. I have written about our investments in the Hospitality industry, we are starting to see a lot of activity in that sector in Iceland and we are looking to invest in a couple of startups in this space.  For those data nerds, here is the data that sourced from Statice.is it is an excellent source and they are quite up-to-date. This is overnight stays in Iceland from the year 1997 to 2013, note that 2013 has only 11 months data. What is fascinating to me is change in rate of growth from different countries, the maximum change has been from the US, UK and China in the last 5 years, however the winner is Spain if one considers growth from the first observation of overnight stays. Check out the Google Spreadsheet where I have calculated the growth rates between years and also has the raw data.

Source: Islandsbanki Research

Source: Islandsbanki ResearchSource: Islandsbanki Research

source: Islandsbanki Research

source: Islandsbanki Research

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March 24, 2013

High Risk, Low Data Decision

English: Technology (or solution) adoption pro...

(Photo credit: Wikipedia)

I have been reading the book “Crossing the Chasm” by Geoffrey A. Moore again. I highly recommend the book to anyone in a disruptive business. The book is an easy read and Section 4 sets up the stage for how to really market and sell disruptive technologies. The strategy is simple enough, the author states

The fundamental principle for crossing the chasm as to target a specific niche market as your point of attack and position all your resources on achieving the dominant leadership position in that segment. The approach is first you divide up the universe of possible customers into market segments. Then you evaluate each segment for its attractiveness. After the targets get narrowed down to a very small number, the “finalists”, then you develop estimates of such factors as the market niches’ size, their accessibility to distribution, and the degree to which they are well defended by competitors. Then you pick one and go after it. What’s so hard?

The hard is to the explanation that follows and I agree with that, the action or execution of this strategy is fraught with a low data decision i.e. you don’t know a lot of the prospects of allocating all your resources because you are not sure if this strategy is going to be successful.

Entrepreneurship is a low data decision activity. If the data is obvious and the risk are minimal, I define risk as a loose term, I think the risk is more opportunity cost ie. if you were not doing an entrepreneurial endeavor what else would you be doing and the pay off of that. It is a tough call, and I understand why many people don’t make that choice because we abhor Uncertainty. I used to but not since the financial collapse in 2008, where all my perceptions and biases and epistemological arrogance was turned in its head. Now I cherish uncertainty and randomness, and I wish that everyone gets to experience that feeling it is liberating and exhilarating.

March 1, 2013

Bootstrapping vs Raising capital

Ben & Jerry's

Ben & Jerry’s (Photo credit: Wikipedia)

I had planned to do a meetup this week and discuss the above topic. Never got around to it, but I thought the least I could do is write about it. Here is a Kauffman Sketchbook with the title “Where do Entrepreneurs get their money?”

Here are a couple of references on fund raising from some smart people who have done this before:

Brad FeldDont Forget to Bootstrap

Fred Wilson – Dont take the money

My 2 cents is that try to bootstrap as much as you can to eliminate most of the risks in your startup. Think of it this way, every risk you eliminate to build a business is value you are building into your company that is your equity. The equation becomes simpler when you don’t take money to eliminate or reduce the risk of starting a new venture. The biggest risk that startups have, I have said this many times and it is worth repeating, startups don’t fail because they have a bad idea… startups fail because they don’t have customers. Eliminate that risk first ie. go and get your customers first, solve their problem, get paid something for it then you have a product/service to market fit. Eliminating that risk really increases the value of your effort, even if you have to raise money the discussion is much different than when you talk to an investor when you have no customers and no revenue.

Obviously there are businesses that need capital to acquire customers or start out for example manufacturing businesses need machines, labor etc those cannot be bootstrapped, however software companies can be easily bootstrapped these days, all you need is a laptop a coffee shop that has WiFi and knowledge to use Cloud Computing infrastructure like GreenQloud or AWS or Rackspace or Azure. I encourage every entrepreneur to delay the fund raising exercise until the Product to Market fit has been achieved. Once you solve the Product/Service to market problem, raise capital if you are in the Land grab business. I wrote about organic growth vs grow fast a while back based on a talk by Joel Spolsky. The most important decision point for a startup to raise capital is based on deciding where is the business. If you are in a Ben&Jerry’s kind of business raising capital is a bad idea. If you are in Amazon Web Service kind of business then you need capital to do a land grab as fast as you can so not raising capital will spell certain doom.

February 22, 2013

Sustaining vs Disruptive Technologies

English: Disruptive technology graph

English: Disruptive technology graph (Photo credit: Wikipedia)

I keep coming back to Clay M. Christensen’s work on The Innovator’s Dilemma. I think the wave of technological changes that is happening as I type this post is quite dramatic. It is interesting to note that HP and DELL both reported earnings where the PC market is declining worldwide at a dramatic phase. HP’s PC business fell by 8% actually all of the business line’s top line revenue fell but of course the headlines in the media reads “At Last, HP Beats Street in Q1 Earning Report“, it only takes a simple look at the year over year trend to see that HP beat the projections of Wall Street analysts by cutting costs and laying off people, I am not sure how you can call this a turn around? anyways, I digress… if you look at DELL’s earning report it is even more dramatic, 31% decline in profits and 24% decline in Consumer business. I really think both Michael Dell and Meg Whitman need to read the book by Clay Christensen, maybe they have and as it states in the book, good well managed companies fail precisely because they have well grounded, established management practices as Clay Christensen puts it

If good management practice drives the failure of successful firms faced with disruptive technological change, then the usual answers to companies’ problems-planning better, working harder, becoming more customer-driven, and taking a longer-term perspective-all exacerbate the problem. Sound execution, speed-to-market, total quality management, and process reengineering are similarly ineffective. Needless to say, this is disquieting news to people who teach future managers!

all the things that the leadership in DELL, HP and to a large extent in Microsoft are doing is futile because they continue to look at the world as a sustainable technological improvement which is incorrect. Maybe Microsoft is doing things a little differently and maybe so is DELL and HP, but the rhetoric coming out of the PR machines in these companies is so passe.

So what is this difference between Sustaining vs Disruptive Technology you ask?

Sustaining technologies improve the performance of established products, along the dimensions of performance that mainstream customers in major markets have historically valued. Most technological advances in a given industry are sustaining in character. On the other hand Disruptive technologies bring to a market a very different value proposition than had been available previously. Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value. Products based on disruptive technologies are typically cheaper, simpler, and, frequently, more convenient to use.

February 9, 2012

Validated Learning – 4th Meetup

We had a fantastic turnout today with over 40 people participating in Hotel Kex lobby in our 4th event related to the Lean Startup book discussion. Ari led the discussion about Validated Learning, once again the whole meeting was in Icelandic until I interrupted the flow with my 2 cents in English :) what can I say I am like that. Anyways, it was very exciting to see the level of participation and interest in this material. I think the most important element of the discussion was when Gunni gave examples of how traditional businesses can apply the Validated Learning concepts to established and functioning business models, and how one can improve on them. The whole premise of the Validated Learning concept is to treat every assumption we have about our business like a scientific hypothesis and build tests to validate those hypothesis. There were a bunch of references during the examples and talk to Steve Blank‘s book the four steps to Epiphany. I thought this video was very apt as it talks about the lost lessons of validated learning, I like the conclusion- “Lean Startup does not teach you to create value, that comes from within and from your value system. Use Lean Startup methodology to refine that.”

February 6, 2012

Valuation of a startup – the holy grail?

I have been getting a lot of questions related to How does one value Startups. The best reference for valuation goes all the way to Warren Buffet‘s teacher Benjamin Graham and his classic book Security Analysis, I believe the principles taught in those books are timeless ie. they don’t fundamentally change what does change is our perception of value. More recently, Aswath Damodaran‘s work on Valuation is quite impressive and it is used by many professionals. He actually has most of his work available online. Value is such a fluid word, what is valuable to a startup when it is getting out of the door is not as valuable when it is looking into the abyss of the valley of death. I have written about the challenges in valuing startups and the uncertainty that always stares at you when you want to do this exercise. I personally think this is the reason Banks or Warren Buffet do not want to even look at startups because they don’t understand the challenges of running a company that is creating value in an uncertain market climate. In some cases they actually create a market, it hard to calculate the size, market penetration etc.


I have been a student of looking at many of the prominent Venture Capital Investors like Fred Wilson, Brad Feld and Mark Suster, who share their thoughts and methods since I have become interested in investing in startups. Here is a list of blog posts that Fred wrote on Valuation, I have listed them in the order that I thought was relevant to me:

  1. AVC.com : The Present Value of Future Cash Flows To all those Python hackers out there here is a link to code that was shared with everyone on this post by Chris Dixon. The code actually simulates equity payout values with anti-dilution preference etc, I have gone back to my roots of looking at code to learn a concept. I don’t prescribe it to everyone but works for me. If you have Python installed give it a twirl, I love this way of looking at valuation.
  2. AVC.com: Determining Valuation Multiples, there is a link in the article that goes back to a Internet Market place business valuation. I recommend that as well to be considered. In the comments section there is a reference to the baseline data published by Damodaran is also very useful. Check it out here
  3. Brad Feld’s post on valuation
  4. Mark Suster’s post on Want to know How VC’s Calculate Valuation Differently than the founders

Considering the above 4 posts and the links they refer to and using the basis of valuing any asset from the classic method one can develop a model. We have developed that model, no it is not in a shape that I can share, when I have time will make it available in this blog.

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February 4, 2012

SVEF or The Association of Icelandic Web Masters

I was invited to speak at the annual meeting of SVEF the Association of the Icelandic Web Masters. I was very impressed to see the Mayor of Reykjavik speaking about how he loves the Internet. Anyways, this was like the Oscars of Internet Web Page designers and implementors. I was impressed by the turnout and quite humbled to even be given a stage to talk about something that I believe in. I have written about it here “Iceland can create the next Google“. The quality and the sophistication in the implementation of the websites that were nominated was world class. I wish this work gets publicized to the rest of the world and I spoke about that during the event as well. Orkusalan a energy management company won the most accolades. The city of Reykjavik also had a couple of awards for its website betrireykjavik.is. Here is the full list of the awards (disclaimer: I used Google Translate for the categories, here is the link to the original website article) :

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