P2P Services Part I

0 comments on this article Posted by crisson in Ideas on March 17th, 2011 .
In a prior blog post, I made a few statements about P2P businesses.  So I still can’t quite articulate exactly what’s so interesting about them to me.  My thoughts are getting a bit more coherent on the issue, but they’re not yet fully baked.  I’ll keep writing about it until the matter is settled in my head.  For now it remains overwhelming excitement and a sense of tremendous potential.My co-founder and I recently discussed the success AirBNB has enjoyed to this point despite the number of people reluctant to become ad-hoc hoteliers (it’s still early days for the service).  The holdouts are apprehensive about a stranger living in their home, or on the other side of the transaction, renting space in a stranger’s home. I suspect that like privacy online, P2P businesses will gradually change people’s thoughts on the matter.  In the same way that social networks and mobile services have prompted people to more readily reveal previously private aspects of their life, P2P services will push humanity to reconsider its relationship with one another.Modern economic systems have tended to favor larger organizations, with their ability to extract efficiency from resource consumption and deployment, over personally produced and offered products and services.  Over the next few years more web services that make it easy (and efficient) for people to transact directly with others will emerge.  While on the surface they’ll appear to be mere market makers (a somewhat well understood business), their impact on humanity and economic organization will be far more profound.  These services will help people meet new friends and bring communities together, while serving a primary practical value.  In general, I expect they’ll increase people’s sense of relatedness.It’ll be interesting to see how traditional organizations cope.

I’m fascinated by this progression not only because it promises greater value for everyday people, but also because I’m a human behavior geek (alas, I’m a geek about everything).  I’m curious to see if this trend will meaningfully impact the way humans organize themselves for political governance.  Unlike social networks whose members frequently self-select connections, many of the coming wave of services will stir the pot, providing slightly more incentives for people of different tribes / groups to regularly interact.  Beyond that, I expect some of these services to directly support group action. You can already see the attempts at this with Kickstarter and Votizen. Combined with some sense that other individuals engaged in concerted action are genuine (Reputation) or serious about it, I suspect higher quality activity or outcomes will be the result.

Yep, jumbled thoughts.  What do you think?


Falling behind again.

0 comments on this article Posted by crisson in Uncategorized on February 3rd, 2011 .

I’ve had my head down tackling two medium-sized feature releases planned for this weekend (by midnight on Sunday, I promise) and this blog has directly suffered as a result.

I’ll find time between now and then to blog about my experience learning to program in earnest and try to wrap my head around my somewhat disjointed but strong thoughts on the potential of the new class of P2P online services.

Stay tuned.


Reputation Graph

1 comment on this article Posted by crisson in Ideas on January 10th, 2011 .

Over the last week I’ve come across two distinct suggestions that one of the next disruptive and innovative markets web start-ups will target is online reputation.   There are no major service providers of reputation online, only those who generate limited reputation information in pursuit of some other goal.  I recently commented on a blog post by Jon Bischke about the Reputation Graph by stating that reputation is most prominently relegated to Seller / Buyer feedback on eBay and Amazon, and credit score information, among similar other contexts.  There’s tremendous opportunity both online and offline for good reputation information to improve business transactions and interpersonal interactions.

I started thinking critically about reputation service providers (RSP?) during a meeting of Babson’s Idea Live! entrepreneurship group.  My co-founder (currently a Babson MBA student) and I participate in the program because we’re really interested in start-up culture, to get critical feedback on our plans for fetchmob, and help other start-up founders by providing honest feedback as they finesse their business plan.  One of the group’s members was considering offering a service that helps roommates coordinate and pay bills.  I thought the idea was interesting and had potential if done right.  The group, after discussing iterations on the idea, eventually arrived at permitting renters to offer information on their good standing to property owners. The benefit to property owners would be better information about probable tenant responsibility, while tenants with a relatively good record will have an easier time renting their next apartment.  It dawned on me then that there are numerous business and inter-personal transactions that would benefit from better information about the person on the other side of the table.

We already use informal networks, service providers, and searching the web to gather information on others.  However, the qualify of information retrieved may be poor for certain contexts.  For example, consider the renting situation I mentioned in the prior paragraph.  Another similar example would be AirBnB, where the hotelier is not interested in offering their apartment to bad guests.  Now, AirBnB provides some mechanism particular to their site to tease out this information, but the pool of data it uses to characterize potential guests is probably limited*.  In general, I expect P2P services like AirBnB to blossom in the future and consumers / personal service providers will demand some way to mitigate risk.

As commentators in the attached blog post mentioned, building a system that provides accurate reputation system is not a trivial endeavor.  I imagine the solution will take the form of a company that allows users to connect their facebook, google, twitter, etc. graph or data, completes various analysis, then offers categorized measures of the user’s reputation.  Relying on users to willingly submit specific information is problematic for two reasons:  some will be dishonest, others will not participate.  There is strong incentive to be dishonest and portray yourself in the best light if you an get away with it, and the thought of providing various types of disparate information to the reputation service provider doesn’t sound very fun or interesting (from a user’s perspective).  Therefore making the aggregation passive, and relying on analysis of their activities and third-party sentiment from their graph to arrive at a user’s score(s) makes sense.

It may be the case that the web isn’t quite ready for this type of service.  The web is still being filled out with services that capture different types of information about a user (Facebook, Twitter: social graph, Google: personal interests, shopping interest, Mint: financial history and information, Fetchmob:  etc.).  Secondly, single sign-on services are not pervasive across all data sources, and there isn’t a standard scheme for representing this type of data that’s exposed to the world via APIs.  Further, users in general (including me) may not be ready for what privacy means (or doesn’t mean) in such a world.

That said, If any start-up is working on this and is interested in discussing integration into fetchmob, or just wants to talk about the idea, feel free to reach out to me @CrissonJCharles or via email at crisson at fetchmob dot com.

* I don’t have intimate information on AirBnB’s reputation system


Start-up Bubble

0 comments on this article Posted by crisson in Uncategorized on January 1st, 2011 .

A lot has been written in recent weeks about the bubble forming in the web start-up investment space, particularly around VC financing.  The main argument asserts that valuations have grown beyond their rational level due to the exuberance of investors fighting to get into competitive deals. This is problematic because average VC returns have been fairly dismal for sometime.  The other argument is that companies who lack a reasonable prospect of growing into viable businesses are funded purely because they operate in a hot space (e.g. local, social sharing).  While both statements probably have some basis in reality for particular deals, the web startup space in aggregate doesn’t appear to be so frothy.

Less Capital, More Revenue

Before I decided to jump into the arena and start a company, I spent many months reading blog posts and listening to podcasts about the unique features of modern web start-ups.  First, such companies leverage cheap or free open source (or web service) tools, allowing a small team to build a minimum viable product and attract users before seeking outside financing.  Secondly, many (if not most) of these companies focus on monetization relatively early.  In general, there’s a large focus on finding ways to get users onto your service (check the recent buzz around A/B testing) and methods to cover your small expenses.

The financing landscape changed in response to the needs of the modern, lean start-up.  Since they require much less capital to reach early development / customer milestones, Angels / Angel groups / Super-angels now fill the space of <$500k capital deals to a greater extent than they have in the past, while VCs participate in subsequent rounds or persue companies with greater capital needs.

Start-up founders and Angels appear to be comfortable with this arrangement.

Investor Returns

All of that said, VC returns are too low*.  According to a study completed by Cambridge Associates, ten-year Venture Capital net returns to L.P.s through July 2010 hover somewhere around -4%.  Surely, that number comprises losses from the dot-com bubble era, but returns from recent years are not much better either (they’re small and declining)**.

It’s hard for me to see how a moderate reduction in valuations will significantly improve overall returns, however.

Lingering Questions

In light of consistently poor returns for the average VC firm, how will requests for more capital to their L.P.s be sold?

At a high level, I expect lower VC returns to lead to less (or smaller) subsequent funds.  If the number of VC funds drops, the relative bargaining power of start-up founders will drop, which should reduce valuations at equilibrium (all else being equal).  How should start-up founders negotiate going forward considering this reality?

What are you thoughts?

* Too low for the amount of risk inherent in the asset class.
** The return referenced pertains to the industry at large, not the portion investing in web start-ups.

I pulled returns from here:

Cambridge Associates LLC U.S. Venture Capital Index® And Benchmark Statistics


Science & Tech, a love story in 3 parts

0 comments on this article Posted by crisson in general on December 13th, 2010 .

I love technology.

That is all.

…
…

Seriously though, I really do.  I always have.  When I was a kid (as I imagine many did) I would design (chortle) intricate rockets and describe to my parents in exacting detail how they work.  Of course I knew nothing about how rockets actually operated back then (sort-of do now, thanks RIT) but why would I let that stop me?  I was a fanatic reader of Popular Science magazine, sometimes reading issues multiple times looking for the lone articles I missed during prior passes.  I had book on astronomy meant for High School and early College students that was way above my knowledge level that completely enthralled me.  I read about Red Giants and Quasars, Kuiper objects and the Oort cloud, etc.  It was great.

In High School I finally jumped into computers in a major way.  My first exposure to computers was in the form of Oregon Trail in Elementary school.  Great game, but there was a long hiatus after that.  I recall my older brother was really into Packard Bell (is that something one admits?) for some time, but I didn’t really share his enthusiasm.  Then in High School my mom purchased a Gateway computer featuring a 600Mhz AMD Athlon processor exclusively for my sister and I to use.  That did it.  Since then I’ve spent hours checking out computer message boards, reading about memory & performance-per-dollar, experimenting with overclocking, stable component pairings, and throwing far too much money at Newegg for parts.  I still painstakingly pour over reviews and impressions of components for my computer before buying modern parts.  That said, it’s more difficult to justify allotting time to that process now that I have negative free time daily, and I have given a half-thought to purchasing a ready-made PC for my next upgrade.  My one technology related regret from my High School years is that I didn’t learn to program in earnest.

Fast forward to now, and I’m completely focused on learning to program (while building a web app — a great way to learn), personal technology, and the intersection of the two.  Programming is simultaneously challenging and rewarding (or perhaps A implies B).  Technically, I began to program at RIT  where I built a really insignificant thermometer application in Excel using VBA for a Mechanical Engineering course.  The application was functional and sparse, but I received high marks for attention to UI detail and declaring my code was open source.  At my former employer, I continued this trend (albeit somewhat augmented) with additional VBA applications.  There I learned about relational databases in concept, but really didn’t dig deep into them.  I also built some really useful Excel VBA applications that generated nifty reports and designed database-driven processes for mission-critical applications.  With VBA.  Don’t laugh.  Despite all of this, I didn’t really gain an appreciation for the art of programming during that time.  Till that point, learning to program seriously was something that I always wanted to do, but couldn’t really generate enough sustained effort for any long term momentum to materialize.  It wasn’t until we committed to build fetchmob full-time and I started to learn Java that my perspective changed.  Several months later, I’m still a noob, but an accomplished noob.  I learn (and build) something new everyday, and I really enjoy it.  My experiences learning to program will definitely be a topic for another blog post.

Thoughts on the future

One thing I constantly think about, which will surely be a subject of a future blog post as well, is the potential for cheap, open, prevalent sensor hardware to interact with web service APIs to not only capture currently unrecorded lifestream data, but also to put it to good use.  There may be direct applications of this technology to fetchmob (we’re not quit there yet), but I think there can be broad value for people in general, if law catches up.


Network Independent Value

1 comment on this article Posted by crisson in Entrepreneurship on December 11th, 2010 .

What is Network Independent Value (NIV)?  Well, it’s the value that a network-based service provides to the users before the network reaches scale.  The concept itself isn’t new, but I first heard it referred to as Network Independent Value from Thumback’s CEO Marco Zappacosta on TWIST.  Not sure if the term originates with him, but I’ll attribute it to him in the absence of better information.

Network Independent Value can be very hard thing to achieve, which is problematic for early stage network-based businesses.  Your product is awesome, but how do induce users to get in and stay on?  There are three types of solutions to this problem: create condensed networks, fulfill the other side of the network transaction, or build a feature that provides standalone value for your users.

Condensed Network

A condensed network brings together people who potentially fulfill all the roles required for the network to work in a relatively short time span.  For example, one can induce their friends and family to join the service at the same time.  Or, as in the case of facebook, jump from college-to-college, where the users of each institution provide enough value for their peers to join the service.  It’s a really compelling option, but may be difficult to organize depending on the nature of the network transaction.

Company as Network Agent

In this scheme the service provider participates in transactions on the network, either explicitly or clandestinely.  This approach creates the impression of greater network activity, which might induce potential users to jump in.  However, you should be careful here.  I think its fair to use this approach when the users receive the value they would expect under normal operation.   Pulling a bait-and-switch (the user engages your pseudonym, then learns that the transaction will not be completed) not only sours users, but is also unethical, which reflects poorly on your business.

Standalone Value

This is a pretty straightforward concept.  The only other blog post I found on NIV that references this category uses facebook’s photo sharing feature as an example.  The service technically serves as a way to archive one’s photos in the cloud, outside of the additional service of allowing a user to easily share their photos and the experiences contained therein with friends.  I doubt that was facebook’s goal in introducing the feature, but it does serve that purpose as well.  Incidentally, I’ve come across people online who claim to use the photo service for exclusively this reason.

My co-founder and I have evaluated ideas from each category, and we think there’s room for all to help get fetchmob off the ground.  Look forward to subsequent posts on how well they worked (or didn’t work).


Our First (Second) Pitch

0 comments on this article Posted by crisson in Entrepreneurship on December 10th, 2010 .

Earlier this week Alisa and I had a chance to pitch fetchmob to four VCs affiliated with Babson.  The event was a final step in Babson’s MBA Entrepreneurship class, and the VCs who participated did so not for the express purpose of investing in the companies pitched, but more to expose the students to the types of questions they should expect when they pitch in earnest.  The feedback was great for us for two reasons: first, they indicated that we demonstrated deep thinking about iterations on the product, user acquisition, the space we operate in (and its history).  Second, we received really good feedback about topics we didn’t communicate effectively, or hadn’t thought of: resource and capital needs at each milestone (e.g., what do we needs to get from 3.5k users at 6 months to 20k users at 12 months?), scenarios of how fetchmob’s business model might change in response to actual user activity, and our roadmap for product development.

The last point might seem like an odd inclusion considering it’s listed it as a positive as well.  It’s really both, and here’s why:  We didn’t spend much time on our product development roadmap during the presentation (around 10 minutes), but we demonstrated during the subsequent Q&A session that we were relatively on-top of it. I say ‘relatively’ because we haven’t committed to one particular iteration beyond the next major release — but we have 2 or 3 things anyone of which could take precedence based on how our users respond to the next release.  With me presently being the sole developer, and with the start-up existing at such an early stage, a more robust short-term roadmap seems unwise.  We’re still trying to figure out that feature or combination of features and experience that really makes the service tick for our users (for the record, I think we’re really, really close — get ready for the new year).

From observing the VCs’ demeanor during our presentation, and from conversations during an informal event afterward, I got that demonstrating deep, holistic thinking about your company/space/what-have-you is a really important signal from an entrepreneur.  This is especially important in the case of first-time entrepreneurs, because there isn’t much information on your potential for success to go on (i.e., a history of success or failure with start-ups).  It’s also well-known that anything that reduces the risk VCs perceive they will face by investing in your business is a good thing.

Besides the fact that I completely gaffed the technical demonstration (forgot a password for a user account), the presentation went really well.


It’s been a while

0 comments on this article Posted by crisson in general on December 10th, 2010 .

So I haven’t written much since I introduced myself on this blog many months ago.

One of my New Year’s resolutions will be to blog more often, but I’m going to start now and make up for the last few months by posting three blog entries over the next few days.


Intro

0 comments on this article Posted by crisson in general on August 24th, 2010 .

Hi, my name is Crisson Jno-Charles. I was born long ago, in a Galaxy far, far away on the small Caribbean island of Dominica. My family moved to the United States and settled in Queens, New York City when I was 4-5 years old, and we’ve called New York our base since then (that said, I currently live near Boston). Now, here’s a blurb about what I’ll blog about, in no particular order of prevalence.

  • My thoughts on developments in technology in general (e.g., renewable, material science, computer, etc.), Economics, and Finance.
  • My experience as a first-time entrepreneur, working with my co-founders to build fetchmob.
  • Anything else that strikes me as interesting or worth commenting on.

and now for something completely different.