Blogmatic

I thought about putting this post aside and then saw an article today’s edition of the Ottawa Business Journal that made me think otherwise. The article I saw was entitled “Business eyes Government Conference Centre for Hub”. More stuff about the “Innovation Dud”, in case you haven’t noticed I am not a fan of this project. Why spend tens (hundreds?) of millions of dollars on a building and aesthetics that are of dubious value. Focus on what you want to achieve and work toward that end. My take is that the Innovation Hub is more about the building and budgets with less concern about what it will do. Personally I believe we can achieve much more with far less.

On that note lets transition to the point of today’s post. Every organization should have success metrics and here are a few ideas that the OCRI leadership plotting the “Grand Vision” and strategy may want to consider to gauge their success. The first metric I call relevance and it is related to membership recruitment and retention. The strength of a good member driven organization is directly related to its relevance to members and potential members. The idea here is that if you are doing a good job the number of members should increase proportionally to or at a greater rate than the available pool of members to draw on. The graph below shows the cumulative growth in OCRI membership versus the cumulative number of new companies created in Ottawa from 2000 to 2006. One would assume that most of these companies are start-ups; after all they are new companies. The numbers in these graphs come directly from the OCRI website and “annual reports”.

OCRI starting value = 600 members   New Company start value = 980
OCRI Ending Value = 625 members    New Company end value = 1803

I leave it open to the blogosphere to decide on what these statistics say about the relevance of OCRI’s leadership and strategy to the start-up community in Ottawa.

Secondly and probably most importantly is the mix of service based and knowledge based members. The percentages for 2000 have been compared against 2006. An indicator of an organizations focus and mission is reflected in the service or knowledge based members it attracts. These numbers were found by comparing membership lists from 2000 and 2006 on the Way Back machine. What do these numbers say about the focus of the organization?

A final metric for consideration might be the relative percentage of VC funding that Ottawa attracts compared to the rest of the Canada. This is a metric of relative success in terms of how well Ottawa companies have done attracting VC interest. The Canada wide numbers are based upon CVCA data and the OCRI numbers are based on the fund meter that OCRI tracks. The idea is that the healthier the Ottawa technology sector the larger a percentage of VC funding the city will receive. The trend for 2000 to 2006 is shown below. Let’s call this metric relevance to the investment community.

I will give some more thought to additional metrics but thought this made a good starting place.

Cheers,
Ian Graham

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I hope to reenter the blogosphere on Monday. Computer issues and a fire or two have kept me in orbit around the blogosphere this week.

cheers and have a great weekend.

Ian Graham

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One charity that I like to contribute to is Harvest House. Harvest house has a rehabilitation program for rehabilitating alcoholics and drug addicts. I believe that everyone deserves a second chance when it comes to stuff like substance abuse. Anyway every year around this time I like to support them by taking part in their calendar program (the calendars are really very well done). I usually buy the wolf calendar but this is one of their favourites and it was sold out so I bought attitude instead.

There are some great pictures and motivational sayings for each month which are really well done. I particularly liked February which was:

Challenge: “The great pleasure in life is doing what people say you cannot do.” Walter Badgehot

Cheers and have a great weekend.
Ian Graham

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 … hey nah, hey nah my emails back.

Let my start this post by saying how totally dependant I am on technology for my day to day operations. Two days with out email is about two days too long. Electronic technology whether it be email or phone, crackberry, or whatever is the life blood of business. Being without email has totally disrupeted my business and productivity.

This tale of woe started with an unsolicited windows upgrade, that I didn’t authorize, however, the default in Windows is to enable upgrades automatically. So this unwanted automatic upgrade corrupted my outlook.pst file. Trust me this is something that you don’t want to have happen. After a couple of hours searching and struggling with an assortment of messages it’s still down.

As I struggle with Vista, Office 2007 and various error messages I think to myself. Office 2007 and Vista are something that I would call valueless value add. While the teams and marketing geniuses at Microsoft have put lots of effort and engineering energy into these products is it something that loyal customers actually want. In my opinion the answer is a resounding NO THANK YOU. I liked Office 2003 new how to use it and was able to bang out documents and presentations quite quickly. With all Vista and Office 2007 shining new bells and whistles have actually made me less productive than I was with the older version. Therefore the simple questions are “Why should anyone familiar with Office 2003 upgrade to Office 2007?” My answer is they shouldn’t stay with XP and Office 2003.

I am of the strong opinion that Microsoft really missed the mark with Vista in terms of positioning and migration. Microsoft could probably have turned XP into a real cash cow with the appropriate lifecycle management. Instead they introduce Vista as a “Next Generation” (really not a big fan of the NG term) product that no one really wanted or at least none of their existing customer base. So instead of milking the cash cow and capturing the innovators and early adopters with Vista Microsoft has pst off the existing customer base and created opportunities for Google Office and Apple.

Cheers,
Ian Graham

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With the Canadian dollar rising so fast what does that mean for the knowledge economy?

Let’s have a look at some of the consequences of a rising dollar.  The rising dollar doesn’t really increase your costs because your labour and expenses are typically all in Canadian dollars. If you are fortunate to be a head office and have staff elsewhere in the world your costs are actually decreasing. If you are purchasing equipment or services from outside Canada your costs will be decreasing. Depending on how you price and sell your product a number of things could happen:

- If you price in USD or rest of world currency margins will be shrinking
- If you price in Canadian Dollars you goods will cost your customer more but you will also be increasing your margins and therefore can lower price

The rising dollar is a mixed blessing and there are options for companies to mitigate risk. If the dollar continues to rise at the current rate then this is concerning but hopefully the bank of Canada will use good judgement to weigh the risk reward of the dollar climbing and adjust rates accordingly.

Generally speaking I like a stronger dollar and believe it will result in Canadian companies being forced to become more competitive and productive. Weak dollar even sounds lame so why would we want that, so we can be the world’s greatest commodity country. Those that bemoan the strong dollar tend to be in weak industries or companies that compete on price and really where is the wealth creation in that.

Cheers,
Ian Graham

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I just finished reading the book “Purple Cow” by Seth Godin. Luc Levesque recommended the book and it has been an interesting read and good learning experience. The key purple cow take away for me is summed up in a word. Remarkable. Yes, that is right if you are a start-up or small business and want to get noticed be the remarkable Purple Cow.

The premise of the book is that based on city folk taking a drive in the country or when you start off on your family’s holiday adventure. Mom, Dad, luggage and all the kids pile into the car. Then you are on the road to holiday land. When you first leave the city and enter the more rural area the kids notice cows grazing in the field. This causes great excitement and everyone yells “look cows”. As you pass more and more pastures full of cows they become less and less interesting until you don’t notice the cows at all anymore and they just blend into the background. This is an analogy for the life cycle of products and how markets mature and become saturated.

If, however, when the family has become cow insensitive someone sees a purple cow in the field the whole game changes. The remarkable purple cow gets noticed and attracts the attention of the family. As a startup or small business you will want to be the “Purple Cow”. Remarkable products can and do get noticed in a crowded markets and have the ability to capture niches.

Be the remarkable purple cow.

Cheers,
Ian Graham 

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This post was inspired by “Cognos sale, portrait gallery snub not the end of the world” in the business section of the Saturday Ottawa Citizen by Mark Sutcliffe. Mr. Sutcliffe suggests that “it is simply a fact of life in the technology world today (referring to the acquisition of Cognos by IBM). Get used to it” Frankly this “Get used to it” sentiment is a sedentary attitude that promotes complacency and mediocrity. Accept the status quo your Canadian. I prefer to think of the acquisition of Cognos as a call to action that we need to change and adapt therefore it is really more of a wake up call for the tech community and not the first alarm bell to ring. The sale of Cognos is not the end of tech in Ottawa, however, it is an indicator that significant forces of change are at work. Darwin’s law reigns supreme, adapt and prosper or accept the status quo and fade away.

There are and continue to be a number of unresolved issues affecting the local tech community. I wrote a series of posts (listed below) with respect to this back in April when Terry Mathews announced that within five years Ottawa won’t have a tech sector (An elephant in the room).

Face the brutal facts - 
Roadmap to Revitalization -  
The Entrepreneurial Hockey Analogy 
Recovery Framework 
Start-up – Government Policy – Federal Issues
Start-up – Government Policy – Provincial Issues 
Start-up – Government Policy – Municipal Issues
Start-up – Talent Issues
Start-up – Funding Issues 
Start-up - Team Formation 

These posts are based on what I knew in April 2007, I know more now, however, stand by the content. I won’t rehash what was written previously but will provide some questions for inquisitive minds to ponder.

What results did OCRI achieve with:
     $1.7M from the Ontario government for OCRP and BMEP programs?
     $500k from the City of Ottawa for the Innovation Hub (or Innovation Dud)?

Seriously, this is $2.2M dollars which doesn’t include another $1.6M from the City of Ottawa. By my calculation this is enough money to get more than 50 companies revenue ready or seed fundable from theGovernment of Ontario and City of Ottawa, however, I suspect the money has been frittered away on bureaucratic pursuits. Alas we may never know, because OCRI is accountable to no one for their financial expenditures. Where is the accountability for Ottawa’s economic development budget in 2007? If you are looking for City of Ottawa 2007 budget ideas why not apply some due diligence to our economic development spending.

Surviving in the age of globalization requires agility, adaptability and results. I think we can do better and at a minimum OCRI should be accountable for making public their financials so Ottawa taxpayers can have a better understanding of how our economic develoment dollars are being spent and more importantly the return on investment.

Cheers,
Ian Graham

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Where do the rights of the individual end and those of society or another individual begin? This is certainly a fuzzy area of law although most people tend to have strong feelings one way or the other. Right now I personally believe that the pendulum has swung far in the direction of individual rights and freedoms. In my opinion rights needs to balance the rights of the individual, family and society playing the individual rights trumps all card can work to the detriment of society.

The Canadian Constitution and Canadian Charter of Rights and Freedoms guarantee personal freedoms. Criminal and property laws draw a number of boundaries for the protection of individual’s personal freedoms to ensure that others don’t interfere with your rights. The exact boundary between personal freedoms, the rights of society and common sense are not always so clear.

Some examples of contentious areas of freedom are:
- Euthanasia
- Abortion
- Patient Care

Society has decided that it is wrong for a person to take any life including their own. Therefore an individual in chronic pain may be forced to endure years of suffering in spite of their personal wish to terminate their life. Society has determined that suicide or assisted suicide equates to murder; look at the Robert Latimer case. 

Abortion is a a differnet case; here you have the overlapping of the rights from a couple of individuals. At what point does the fetus become a person (certainly a contentious issue) and entitled to protection under the charter of human rights and freedoms? The pregnant woman has the right to choose?

While people are not allowed to commit euthanasia the patients can refuse life saving or medically necessary treatments. Individuals can refuse necessary or essential treatments in spite of the consequences or wishes of their physician and family.

The challenge it appears is when you have an overlap of two or more individual’s rights or an individual and society. Right is a highly subjective and certain issue polarizing society with advocates in either camp.

When should the rights of the individual be given priority over those of society?

Ian Graham

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On the surface this sounds like a good thing. This is a new $165M fund for Ontario start-ups as promised by the Ministry of Research and Innovation. The Ontario Venture Capital Fund is being done in conjunction with a number of private partners such as BDC and RBC, still sounds pretty good. The private partners will also be contributing $75M to the fund; MRIO contributes the other $90M. So the government of Ontario is essentially leveraging their investment with that of private partners and this continues to sound good. This program was originally announced about a year ago, however, it sounds like progress is being made. The caveat may be how the program is implemented.

If the government uses the private partners to distribute the funds and imposes allocation for a certain amount of pre-seed, seed and later rounds then they may be on to something. Putting in place some other restrictions to ensure that disbursements are given some geographic priority may also be required. While there may need to be some guidelines it will be extremely important to keep the government bureaucrats out of the VC business and to leave fund allocation to the private partners. We all know what happens when governments are in the business of handing out money, not a good idea.

The jury is out on this one for me (I’m from Missouri) but if the implementation lives up to the hype; I am all in favour of the Ontario Venture Capital Fund. This sounds like a good thing for start-ups and much need support for early stage businesses. A step in the right direction Mr. McGuinty make it happen.

Cheers,
Ian Graham

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When you are studying the diffusion model in an academic setting there are very clear labels for where you are in the adoption cycle. There’s the innovators, early adopters, early majority, late majority and laggards. When you are doing a real market study there are no clear distinctions of where you are in the adoption cycle. That being the case, how do you tell what phase of the adoption cycle you are in?

In my opinion there are two strong indicators of where you are in the adoption cycle. The first indicator is market size, growth and trends. You can usually find this information from competitors and suppliers annual reports or press release, magazine articles about the industry or industry associations. The real challenge is that this information is usually unavailable for new and developing markets. The second and more readily available source of information is the competitors in that market. If there are many smaller competitors and lots of new entrants that is a sign of a growing market that is early in the adoption cycle. If there are fewer larger more established competitors with few new entrants then this is likely a mature market or later in the adoption cycle.  There are all sorts of variations of the above conditions. The key is to be able to read the market and competitive signs to get a reasonable picture of where you are in the adoption cycle.

Cheers,
Ian Graham

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