Wednesday night I attended my second Hatchery event. The Hatchery is an opportunity for organizations and clever individuals seeking venture capital to make a proposal in a formal panel process with venture capitalists. This month’s event included 3 presenters, all 3 different from last month, each presenting in a better style (thanks to being prepped) in a revised format that included a longer presentation time, and an opportunity of questions from the floor. So the presenters.
On the Internet there is “no way to prove who people say they are”. safeTspace.com is an attempt to address this problem starting with the vertical of creating a safer Internet for children. This is a noble pursuit, it’s clearly needed, I applaud the attempt but it’s a battle that I believe can’t be solved via traditional means. I compared this pursuit with a two very common problems. 1: SPAM. This can’t be solved without eliminating the underlying email protocol that is flawed. 2: VIRUSES. This can’t be solved without the underlying Microsoft Operating System that is a virus incubator.
With these two examples there will always be spam filters and spam programs competing to eliminate spam, and the issue for example of false positives. There will be always be anti-virus software attempting to fix as quickly as possible problems or identification *after* a new virus is found and released to the world. Until Microsoft re-defines the way it secures it’s underlying operating system, and application suit from the ground up, those users that use this OS will continue to live with daily concern of viruses. Enough ranting.
It would appear from the presentation there are two steps of the process, authentication and verification. The authentication process involves a physical person verifying the child in question is a physical real person. The verification process is either a fingerprint scanner, or a camera. Fingerprint scanners for example are not secure, and there are plenty of non-standard entry level models already available, so a fingerprint could be faked. Photo recognition, what’s stopping somebody putting a photo of the child in front of the camera.
The problem is the system is only half of two necessary parts. Authenticating a real person to access the Internet doesn’t stop this person from then doing anything like pretending to be somebody else. While the purpose of the pursuit is to ensure the reverse, this first point can also occur. The co-operation of all websites is needed but how can you get a buy in from sites such as MySpace, FaceBook, YouTube etc. I work in this industry, I know people that work for these organizations, I work with large organizations such as these, I know this type of implementation will not happen easily without significant incentive, and there are millions of community web sites, millions.
It was interesting that this project started “from something that came out of an argument”. A comment that was re-iterated by one of the panel saying this was a good thing. I can’t say I agree here, active discussion promotes collaboration, and opinionated views. Arguments rarely achieve anything other then resulting in personal attacks and usually is over something less then very important.
While all three key people were all from the Department of Homeland Security (good to see them all there for the presentation), the comments regarding the proposal included the lack of a technology security expert, and resources with significant Sales & Marketing background. This re-iterates what I have learned from my experiences in working with startup companies and venture capital using the Bell Mason Diagnostic (BMD). This approach tackles 4 different stages of development, 4 quadrants with 12 axis of analysis that covers Technology, CEO, Product, Team, Software Development, Board, Business Plan , Cash, Marketing, Financeability, Sales and Controls. What I know and don’t have in any of my own ventures is contacts and involvement of people covering these areas of required expertise. It’s an important checklist with anybody that has an idea.
The second presenter was for ParkEhiz.com, a quick and easy way to search for and pay in advance for parking. With one click access to your city, Google Maps mashup integration, slider refresh of distance and price (but not rating) the website provides quick access to information and quick filtering, something necessary for a website success, and something that can kill you in performance with a successful site. Still, good points scored from me here for the practical site.
The presenter did a good job. While clearly a technical person, his enthusiasm towards the idea was evident and this is one side to promoting you idea. There were clearly areas of greater analysis in the business plan necessary such as securing major clients, and considering ideal marketing and pricing plans. Panel Investor Hugh Cullman post presentations comments stated in his discussion that the zeal of the presenter and not just the business of the presentation contributed to evaluating proposals early in the funding process. At the ring of the 7 minute timer, when asked to complete the sentence the reply was “it’s going to be a 7 slide sentence”. The presenters know the terms before the presentation, they were also prepared prior. It’s very important that your professionalism includes following the rules.
The ParkWhiz Guarantee is an interesting offer. A 100% guarantee is parking is not honored. This will become an issue if the “phone for an alternative” floods the most likely single phone operator for now. With a dependency on more traditional communication means additional resourcing will always be necessary.
Convenience is a strong selling point. However, having worked for a failed Internet startup from 1999-2002 that had 3 rounds of funding and one significant project that worked with bringing *buyers* and *sellers* together I had a number of points of input. The most significant is meeting the technology capabilities of the “buyer” and “seller”. I saw huge problems here, and this was clearly raised by one of the panel members saying “I know my parking garage just got an answering machine”. In this instance, the reliance on Parking Garages to have Internet access, and to use this in a timely manner will simply never work. Likewise for those looking for last minute parking, people may not both have readily available Internet access not the desire to pay in advance. Combine the management fee for this service of 25%, and I’m sure the desire of less reputable garages for a cash business, as well as the handling of money twice is also and overhead. That is taking money from the buyers, and then passing onto the sellers.
To overcome this I would suggest two things. First, for this to work you need to meet the sellers with the technology they can support, and the most I could see here is cell phone text messaging. No more. The second is providing a monthly fee service for buyers, that again via Cell phone, Text Message, email or PDA version provide a buyer with a list of parking garages with prices and times in the area provided. Would a service of $5-$10 a month work here. Well I guess only trial and error can tell. I did find out that a PDA version of the website existed, however on my iPhone (which is a full web browser), I was stuck with the PDA version.
The final presentation was Newstin, a Global News Aggregator. On first inspection this site showed nothing more then what I get with Google News. The presenter who didn’t stand still (making it interesting for the videographer) was quick to indicate the key differences, the first was the number of feeds being significantly more, and the second being translation capabilities via a machine translation technologies.
This presentation described the direct competition with Googke, Topix.net and Factiva, and similar services as Bloomberg. This information is always necessary, you have to set your apart from your competitors. You have make yourself unique. That uniqueness was the schematic keyword search and integrated translation. This analysis included a patent. The presentation included description of technology partners and it seemed while not clear to indicate that translation was performed by a third party.
The service however is a niche product at $2500 per year. It was also immediately clear that Americans and America can never be considered a primary source for this service. I’ve spoken previously regarding my opinions on the clear lack of World News by the US media, and a clear false view presented to the viewing public in this country. My thoughts on CNN International was also echoed by one of the panel. The key target market is clearly Europe, a point raised many times by the panel. What was not mentioned and I consider an emerging market is Asia. Korea, Japan are powerhouse large Internet communities and I’m sure China and other Asian countries will become likewise.
And to include a quote from the presenter, when asked how much money do you have left from initial funding the response was “Just about enough to get me here to ask for more”. They were clearly asking for a lot and with 30 staff in Prague, Czech Republic resources were also working for peanuts.
One great thing about this meetup is the opportunity to talk more with the presenters afterwards, to also network and this time (as well as before) and the opportunity for a drink with some people following completion. I had a chance when discussing an idea to mention The Purple Cow by Seth Godin. A quick and easy read, but an inspiration in thinking outside the square. I had an opportunity to show my Moo Cards which last month were on order, but used by one of the presenters. What was surreal was as a showed my cards, one was randomly selected just as the NewsTin presenter approached. The card selected was of the Praque Castle (the only Praque photo of the collection) and Praque being the home city of operations for NewsTin. Coincidence!