As we enter 2014, well into the 21st Century, one lesson for me from the year just past was that Canada seems to be hobbled with 19th century infrastructure. Let me explain.
During 2013, my home in Ontario was subject to not one, but two, different ice storms – in April and December. Both brought down large chunks of trees and both caused multi-day electrical power outages. In decades, this is the first time I can recall losing power for more than 1 day. To have this occur twice, with a combined 8 days of power outage, in a single year is even more striking.
After the first ice storm in April, I recall discussing this with a European colleague who was surprised by the very notion of a power outage. From a European perspective, he suggested the last power outage, of any length, that he could recall was 30 years ago. This started me thinking about why the difference.
In Canada, we have always prided ourselves on being one of the world’s richest countries, with modern infrastructure. However, much of our infrastructure was built for a different time and need. Much of it is really a testament to truly inventive Victorian design. It was indeed wonderful but no longer makes sense in the 21st Century. So, why indeed do we still have most of our electrical power lines above-ground on poles, while the rest of the (rich) world generally buries them? Why do our railways still rely on switches that freeze in winter and need to be operated by workers with propane torches? Why is a city like Toronto paralyzed by a major rainstorm?
Our homes, utilities, drainage and much more was built for a world predating our current period of rapid climate change. Surprisingly there remain in this world Luddites, who bizarrely continue to deny the fact of climate change. While we still have much to learn, on-the-ground results are here for all to see.
I gained significant insight into these issues when as a Director of Gore Mutual Insurance Company, a leading property insurer, I attended an enlightening presentation by the poignantly named Institute for Catastrophic Loss Reduction(ICLR). This industry-funded organization is a world leader, collaborating globally in research and advocacy around the causes and solutions for large scale insurance losses, known in industry jargon as a Catastrophe or even a Cat.
ICLR gathers data and works with many academic researchers to increase both understanding and awareness of what causes insurance losses. The data shows that the last ten years have seen huge increases in the number of severity of large scale losses, particularly from damaging wind, water and ice events, which are all significantly driven by climate change.
For example, with increased wind events (typically tornadoes in this area of Ontario), a call for more homes to be built with windows structurally rated to withstand 200 mph wind events makes sense.
Furthermore, climate change means that rainfall in 1 hour can equal what used to occur over 24 hours or more, with flash floods ensuing. In such an environment, instead of our historic practice of getting rid of water as quickly as possible, it is better to slow it down and buffer the potential for flash flooding.
For me, the power outages are a metaphor for how we in Canadian society need to look at our infrastructure with a sense of long term vision. We really need to invest to upgrade utilities, transportation and drainage for the needs of the 21st century. This in no way takes away from the heroic efforts of Hydro workers over the holiday season. I’m simply surprised that attention has never been focused on the root cause and long term prevention.
In an era of political infighting and embarrassing city Mayors, I’m wondering where the leadership necessary to achieve this will come from?
A GO Train is stranded on flooded tracks in Toronto on Monday, July 8, 2013. THE CANADIAN PRESS/
Almost four and a half years ago, I penned what some called the obituary of Blackberry (see “How You Gonna Keep ‘Em Down on the Farm”). My intentions in writing that missive were, in fact, quite the opposite. Back in 2008, a year after the first iPhone, Blackberry didn’t appear to be heeding the threat of major market disruption, let alone making a response. I thought that writing such a post might incite some action. Sadly, while I got loads of reaction from all over the world, the one missing piece was that this was singularly not registering inside the “Faraday Cage” of RIM headquarters at Philip and Columbia in Waterloo.
For many years, to continuously hone my expertise as an investor and participant in the next generation mobile ecosystem at VERDEXUS, I have maintained a “production” device and a “testing” device which allows me to sample the greatest number of new applications and platforms in my daily business and personal life. At the time of the 2008 blog, I switched from Blackberry as production device and iPhone as testing device. At that time, I promoted iPhone to production and introduced an early Android device into the testing status.
The four and one-half years since then, representing four to five mobile device generations at the rapid pace in which these are deployed, has seen a lot of innovation and change in the mobile universe. The first production version of Android occurred one month after the aforementioned post. Today, over nine releases later, Android 4.2, known as Jelly Bean, is a mature and polished mobile platform.
Mobile user experience has, as it were, come up from the Farm and we are now definitely in Paree. It’s hard to imagine how things could get much better, yet an even more exciting future in mobile will undoubtedly unfold. The pace of change has been almost mind boggling, with Android appearing to move almost twice as fast as iOS, the more proprietary Apple platform running iPhone and iPad.
As a young platform, Android has long shown promise. Being an open source operating system primarily developed by Google, but customized by various device manufacturers, not to mention the ever-meddling carriers, has been both a blessing and a curse. Initially, Android seemed “rougher around the edges” and more techie in feel than the uber-polished and legendary iPhone experience, which is produced end to end by Apple.
Conversely, the limitations of the Apple closed ecosystem approach are starting overtake the advantages. There are numerous examples. If you simply want to plug in your device via USB and load music and other files, Android shines by bypassing the need to go through iTunes. While iTuneshas its advantages, many of us simply want more control over our cross-device media file deployments. Another even more telling example is the recent debacle in which Apple turfed the tried and true Google Maps application in favour of a badly implemented and incomplete version of their own. This is but a single example of where Apple’s legendary quest for control is wearing thin.
While giving more control to mobile application developers has its challenges, it is clear that no one company, no matter how sainted, can determine, let alone sully serve, the desires and needs of the entire mobile universe.
It is a combination of this clear advantage, coupled with the incredible progress inAndroid and its handset manufacturers, that has led me to promote my newest device to production and render the formerly top-billed iPhone second tier status of my test device.
For me that device is the Samsung Galaxy Note 2, which with its 5.5″ screen is sometimes dubbed a “phablet” (ie. a combination of phone and tablet). Essentially a super-sized Galaxy S3, this phone is nimble, fast in computational processing and with speedy network connectivity. I first saw Europeans use it a few months ago, a cool and capable device, but perhaps an acquired taste for some
Perhaps it is simply my poor vision, but the large screen size is versatile and a joy to work with for all sorts of browsing, content and documents. The S Penstylus, even for those who don’t want to do handwriting or line drawings, transforms the mobile browsing experience by removing the navigation problems on many sites with menus which are small on mobile screens. Samsung has even developed an SDK around the S Pen which could create a whole new application ecosystem, assuming this next generation stylus gains sufficient market traction.
Is my recent promotion of Android to top device spot the end of my quest for mobile perfection? Absolutely not! In fact, only one week ago, I personally promised my colleague Alec Saunders, the ubitquitous and transformational new VP of Developer Relations for Research In Motion, that I will definitely give the new Blackberry BB10 devices a serious try. And, not just because “Devs, Blackberrry Is Going to Keep on Loving You”. I truly do like much of what I’m hearing about their capabilities.
Stay tuned – the mobile world is a fascinating and ever changing one.
In the world of wine, the concept of terroir describes a centuries long process in which the climate, soil, grape varieties and dedicated vintners, symbiotically develop a unique “sense of place” for a wine region. A favourite of mine, the garrulous and quintessential Californian vintner, Randall Grahm, while trying to establish the old World notion of terroir in California postulates that it is a long term proposition and can take centuries to develop.
As both a wine lover and serial tech entrepreneur, I firmly believe that building a tech cluster is similarly a very long term process. Ironically, the epicentre of tech clusters is in California. The Silicon Valley, which got its start in the 1950s remains the major cluster worldwide as “… no other place as yet has the Valley’s scale and resilience.”
Although I started my tech startup career in the US, it was in the Canada’s leading tech cluster of Waterloo where I built major companies and was one person who got that cluster started. Like Silicon Valley’s origins in Stanford University, the Waterloo cluster was initially fuelled by University of Waterloo. Over time, a combination of executive and programming talent, capital and professional services capabilites led to the current state of almost 1000 technology companies. By contrast to Silicon Valley, Waterloo is a must younger cluster, having started just over 25 years ago compared to the 60 years of Silicon Valley. It continues to mature around some key ingredients such as global strategic marketing capabilities and sufficient capital to fund on a globally competitive basis. Experienced people may well be the most important ingredient in a cluster’s maturation.
Further, I feel that all who have been fortunate to build wealth and experience in business, owe an obligation to “pay it forward” to the next generation. My own contributions include significant startup mentoring, Board and strategic roles in organizations like Communitech and Innovation Guelph, and for the last 3 years a Board role and chairing Selection Committee for the Golden Triangle AngelNet (GTAN). In just 3 years, GTAN has grown to about 150 paid accredited investor members who bring a wealth of experience to the 25 funding transactions to date. And, it goes without saying, that many of those financings might not have happened without GTAN having emerged to fill a significant funding gap as VC’s became largely extinct. Acting as a superangel to syndicate angel network deals is a tremendously labour intensive exercise, but one that I and others believe will pay off in the long term economic prosperity of our region.
I firmly believe knowledge-based companies to be the key ingredient of our future economic prosperity, so such company-building competence is mission critical for our region, province, country and globally. As globalization occurs, we see more and more regions clambering to reap the riches of the innovative, tech startup world.
To that end, at Verdexus, we have always taken a transatlantic perspective, primarily to have a more global window on building companies that can achieve world leadership in their chosen businesses. Over the years, I’ve worked with startups across the United States and Europe in the dominant clusters such as Boston, Chicago, Silicon Valley, London, Munich, Berlin, Stockholm and more. To round out my experience, over the last few years, I’ve sampled some key emerging regions by volunteering as an expert judge in places as diverse as Brussels area, Warsaw and Torino. A week ago, I had the opportunity to judge startups associated with the European Space Agency in Toulouse France as well as in Istanbul, Turkey. The latter Istanbul venue, EU Venture Forum was jointly sponsored by EUREKA (the pan-European research and development funding and coordination organization) and Europe Unlimited from Brussels. Collectively, these more than a dozen regional events ultimately feed into a pan-European venture prize in Berlin in December.
It has been very instructive to visit various clusters. This grassroots view, from the perspective of startups, reveals much in common globally but also a few surprises. Based solely on interacting with local startups, on a global perspective, it is clear that culture and experience vary greatly across various Euroopean regions. For example, I was pleasantly surprised that Warsaw had some of the smartest and most sophisticated business startups I’d seen anywhere. And, remember, they are pitching in English which is not their native language. Conversely, the cluster around Torino appeared to have a long way to go before its startups would begin to measure up globally.
Pitching in Istanbul
Similarly, the startups I saw in Istanbul were impressive. Some companies, following a model also common to the emerging markets of Central and Eastern Europe, were essentially cloning an existing business model into the 80 million strong Turkish market. More significantly others were clearly building globally strong technology startups. One pleasant surprise was that, of the eight companies that I coached the day before the forum, three had women CEOs. This was a surprise for Turkey, but sadly women-led companies remain all to rare in Canada
The calibre of engineering and basic technology talent was very impressive. That said, it was also clear that the level of support ecosystem around these startups is very limited – at least compared to what we see here in North America. One direct challenge was that in Europe companies appear to receive generous R&D funding which seems to encourage more of an engineering mentality than a market-driven one. In essence, projects stay too long as “science projects” and the culture and skills to get projects to market seem to suffer as a result. Although this is a generalization, there are many exceptions.
In the area of capital, the meltdown in Venture Capital A Round investments is about 3-4 years behind what already occurred in Canada. One particularly European challenge is that more and more of the VC funds have moved their offices and focus from regional markets to London, meaning that companies in the regions often have less direct access to capital. Conversely, the growing role of Angel Networks and Superangels to fill the gap is still in its infancy in Europe. I suspect that will change over the next two or three years. Venture funders like to either be close (1 hour travel) to their portfolio companies or, at the very least, to have a local investor who can “provide adult supervision”. Increasingly, experienced serial entrepreneurs will be called on to fill that key local role as Angels and Superangels. It is clear that the notion of Tim Draper going to Estonia and finding Skype is definitely the exception rather than the rule.
And that takes me right back to the notion of “tech terroir”. As global innovation increases, and people around the world vie to build ever stronger tech startup ecosystems, it is the dedicates entrepreneurs in the sector who magically nurture these maturing ecosystems. As one of the entrepreneurs that I coached mentioned, she wants to:
“make innovation easier in Turkey and to make life easier for entrepreneurs”
So, in addition to building a great global business, she also takes time to help move the needle of her local ecosystem forward. It’s a very encouraging sign that continues to inspire me as I engage with the new globalized world of tech startups.
This summer I took time to re-read an oft-overlooked volume that I believe to be the essential to anyone working in marketing and innovation. In this review, I’ll provide a few examples of why this book needs more attention, particularly here in Canada where we definitely need to up our game in marketing of innovation and technology.
Clayton Christensen, as Associate Professor of Business Administration at Harvard Business School, is a leading academic researcher on innovation. Yet, he still manages to provide practical and pragmatic strategies that real companies can use. And, most importantly, his theoretical groundwork is based on extensive, data intensive research over longer period of time with real companies and markets going through disruptive innovation.
The latter term is often thrown around lightly in technology company circles. A Disruptive technology (or innovation) typically has worse product performance in mainstream markets while having key features that interest fringe and merging markets. By contrast, sustaining technologies provide improved product performance (and often price) in mainstream markets.
The book covers real markets, including the various generations of disk drives starting with 14″ drives in the 1970’s to today’s 2.5″ (and smaller) drives. By studying hundreds of companies that emerged, thrived and failed over a 25 year period, some clear patterns emerge. Further examples across a broad range of markets, include he microprocessor market, the transition from cable diggers to hydraulic “backhoes”, accounting software and even the transition of industrial motor controllers from mechanical to electronic programmable models.
The key message of the book is that the playbook for normal (“sustaining”) technology innovation must be thrown away for disruptive technologies. Disruptive technologies break traditional rules in many, often counter-intuitive ways:
Financial – typically disruptive technologies are more expensive and have lower performance than existing products. This effect causes financial managers to kill many such innovations.
Marketing: the normal rule to “listen to your customers” must be thrown away – instead many educated guesses with repeated failures are the only path forward.
Organization: given the ability of normal strategies to reject disruptive innovations, such practices as heavyweight teams (which silo the team with more autonomy) and even spin-outs are the order of the day.
Entrepreneurial writings, not to mention my own experience, encourage us to celebrate failure. Beyond the power of learning by trial and error, The Innovator’s Dilemma, for the first time, provides an analytical framework as to why such failure is so critical in new markets.
One area where the book could provide more guidance is that of differentiating disruptive from sustaining technologies. Such discrimination is absolutely critical to ensure the right strategic approach to the new technology is adopted. Generally easy with the benefit of hindsight, such determination can be very tricky, and error prone, when first confronted with such new technologies.
This is a book that anyone working with products in fast moving markets needs to re-read regularly. It surprises me that, 15 years after publication, how few product marketers and senior executives appear to have benefited from the deep wisdom Christensen imparts.
After welcoming people to the 050th Reunion of the ‘Bunand other 1970’s computing at University of Waterloo in mid-August 2012, I’ve gathered together a photo album, the brief presentation from the Gala and the many comments received outside of the earlier blog post.
Before the Gala, almost 100 photos were gathered which have grown to almost 250 contributed by various attendees. Enjoy browsing the memories.
Dave conroy
Sytem controller
Card Reader
Line Printer
Removable Disc Driver
Randall Howard
Dave Buckingham
Charles Forsyth @ Math/Unix
Eric Manning
Dave Martindale
Robert Biddle
Mark Niemiec
Jim Gardner
Vic DiCiccio
Dave Martindale
Peter & Sylvia Raynham
Wendy Nabert Williams
Rohan Jayasekera
Hide Tokuda & San-Qui Li
Dave + Randall @ Mark Williams
Alex White
Randall @ MKS
The Hacks @ Randall&Judy Wedding
Math Building
Morven Gentleman
Morven Gentleman
Eric Manning
Eric Manning
Ciaran O’Donnell
Michael Dillon
Peter & Flaurie Stevens
Rick Beach
Rick Beach
Brad Templeton
Brad Templeton
Brad Templeton
Ian Chaprin
Ron & Amy Hansen
Jon Livesey
Johan George
Kelly Booth
Mike Malcolm
Ian! Allen
Linda Carson
Linda Carson
Dan Dodge
Dave Huron
R Anne Smith
Trevor J Tho,mpson
Math Building
I’ve also included the brief presentation from the Gala on Saturday 18 August, 2012 in case anyone wants to see that:
Finally, there was a lively discussion via email,Facebook, Google+, LinkedIn and Twitter both from attendees and those who were unable to join us. The following is a summary of some of those reflections and comments:
Morven Gentleman
Randall,
The first story that comes to mind is how we got the Bun in the first place.
In 1971, Eric Manning and myself as young faculty members felt that it was embarrassing that a university which wanted to pride itself on Computer Science did not have any time-sharing capability, as all the major Computer Science schools did.
At the time, the Faculty of Mathematics was paying roughly $29,000/month to IBM for a IBM 360/50, which was hardly used at all – it apparently had originally been intended for process control, but that never happened. (Perhaps the 360/50 had been obtained at the same time as the 360/75 – I never knew.) So Eric and I approached the dean with a proposal to see if those funds could be diverted to be spent instead on obtaining time-sharing service. The dean approved us proceeding to investigate the options.
The popular time-sharing machine of the day in universities was the DEC PDP-10, so we wired a spec to get one, but issued the RFP to all vendors. In the end, we received bids from IBM, Control Data, Univac, DEC, and Honeywell. IBM bid a 360/67 running TSS 360 at more than twice what we were paying for the 360/50, and at the time only the University of Michigan’s MTS software actually worked at all on the machine: the bid was easily dismissed. Control Data bid a CDC 6400 at above our budget, but at the time didn’t have working time-sharing software: again easily dismissed. Univac bid an 1106, again above our budget, and although its OS, Exec 8, had some nice aspects as a batch system, we had no awareness of time-sharing on it: so we dismissed it too. DEC bid a KA 10 almost exactly at our budget: this was what we originally wanted, so it made the short list. Honeywell bid the 6050 for $24000/month, notable savings for the Faculty, and since I had used GCOS III at Bell Labs, I knew that even if not ideal, it would be acceptable: again on the short list.
Announcing the short list had a dramatic effect. DEC was so sure that they would win that they revealed that, as was their common practice in that day, they had low-balled the bid, and a viable system was actually going to cost $32,000/month.
Honeywell instead sweetened their bid – more for the same money, and the opportunity for direct involvement with Honeywell’s engineering group in Phoenix. Whereas with DEC we would be perhaps thousandth university in line, and unlikely to have any special relationship, Honeywell only had three other university customers: MIT, who were engrossed with Multics; Dartmouth, who had built their own DTSS system; and the University of Kansas, who had no aspirations in software development – we would be their GCOS partner.
The consequence was there was no contest. The Faculty cancelled the 360/50 contract and accepted Honeywell’s bid. I agreed to take on the additional responsibility for running the new time-sharing system. The machine had already been warehoused in Toronto, so it was installed as soon as the machine room on the third floor could be prepared.
Morven (aka wmgentleman)
Eric Manning
Hi Randall
Yes, all’s well here. I was mandatorily retired from UVic but continue to work on various projects for the Engineering Faculty, and a bit of consulting etc. Engineering has no end of interesting things to work on. I’m very sorry that I can’t attend your Unix/Bun/CCNG celebration; the mark we made certainly should be celebrated!
I’m distressed about the crash & burn of Nortel and now RIM, and I certainly wish you well in keeping the tech sector alive and well. Rocks, logs and banks alone do not a healthy economy make.
All the best
Eric
Gary Sager
Randall,
Unfortunately I have to be in Seattle at that time. It does sound like a good time will be had. I would especially like to go to the Heidelberg again (which I did have the occasion to do in 2001 [or so]).
After Waterloo, I did time at BTL (in Denver, working on real-time systems) then wound up at Sun in charge of the Operating Systems and Networking group — putting me in charge of what was arguably the best set of UNIX people ever assembled. Had a number of other adventures after Sun, and finally decided to retire when the people I was hiring were more interested in how much money they could make than in what they would be doing. Guess I was spoiled by the Sun people I managed.
I have a “blog” updated quarterly for friends and family: http://bclodge.com/index.htm
Do look us up if you are ever in this area (Bozeman, MT). Some memories:
One day some malicious (and uncreative) person copied down a script that was known to crash UNIX by making it essentially unusable. It went something like:
while true do mkdir crash cd crash done
Some subset of the hacks (I forget which) spent a great deal of time trying to figure out how to undo the damage. The obvious things did not work. They finally decided to go to dinner and think about it. I stayed and thought of a way to fix the problem; I finished the fix just as they returned. They wanted to know how I did it. I never told them and am still holding the secret (it was a truly disgusting hack).
Anyhow, the hacks I most remember (other than yourself) were Ciaran O’Donnell (on LinkedIn), Dave Conroy, the underage Indian kid whose name escapes me at the moment, and one more Dave (Martindale?).
Some more stories:
Someone from Bell Labs came to give a talk about text to voice and gave a demo by logging in via phone modem to the Bell Labs computers. The hacks looked at the phone records and figured out how to log in to the BTL system. Suddenly our Math/UNIX system was getting all the latest new UNIX features before they were released (by means unbeknownst to me). The BTL people weren’t terribly happy when they found out, but they were happy to accept a guarantee it would stop.
We kept trying to use the IBM system to do printing with a connection to one of their channels (I think they were called). It would frequently stop working and someone would have to call the operator and say “restart channel 5” (or some other jargon). I had a meeting with the IBM staff to see if we could get the problem fixed. At that meeting I recall one of the staff was incredulous that our system did not reboot when they rebooted the IBM mainframe. Anyhow, they were reluctant to fix the problem so I told them I would fix it by buying a voice synthesizer (as demonstrated by BTL) and have our system call their operator to instruct them to “restart channel 5”. They fixed the problem.
The worst security problem I recall someone finding in the ‘Bun’ was to do an execute doubleword where the second word was another execute doubleword. Execute double word disabled interrupts — this was a way of
executing indivisible sequences of instructions. By chaining this way for exactly the right amount of time (1/60 second I think) and doing a system call as the last instruction, there would be a fault in the OS for disabling interrupts too long and the system would crash. I don’t know if anyone ever figured out a fix since this was essentially hardwired into the machine.
I assume there will be pictures, etc from the event….
Gary (aka grsager)
Richard Sexton
Richard Sexton: I still used the ‘bun for a few months when I moved to LA in 79 (x.25 ftw). I’d love to be there but can’t make it that day but I promise when there’s a similar event for math unix I will be there; that was the first (and I sometimes think only) decent computer I ever used.
When I worked with Dave Conroy summers at Teklogix, we worked for Ted Thorpe who was the Digital sales guy running around selling the same machine to six different universities just so they could sign for it at the shipping dock and get it on *this* years budget. Ted would then take the machine to the next school until Digital has actually made enough they could ship all the ones that had actually been ordered.
Stefan Vorkoetter: Wow! I remember using that machine in the 80s. It must have been kept alive for quite a while if it was installed 40 years ago.
Judy McMullan: It was decommissioned Apr 23, 1992 Brenda Parsons: The 6050 or the Level 66 or the DPS8 — wasn’t there a hardware change in there somewhere before ’92?
Jan Gray: Thanks for explaining the S.C. Johnson connection. I had no idea how the Unix culture came to Waterloo.
I was just a young twerp user, but I fondly remember the Telerays and particularly rmcrook/adv/hstar. As well as this dialog (approximate) :-
Sorry, colossal cave is closed now. > WIZARD Prove you’re a wizard? What’s the password? > XXXXX Foo, you are nothing but a charlatan.
c .r ..a …s ….h_
Ciaran O’Donnell
Random musings from the desk of Ciaran O’Donnell when he should be working
I would especially like to thank my dear friend Judy McMullan for organizing this wonderful reunion.
I am so glad to have gone to a University that was born the same year as me, that taught you Mathematics, that did not force you to program in Cobol or use an IBM-360, and that paid people like Reinaldo Braga to write a B compiler. It was nice to have L.J. Dickey teach you about APL in a world before Excel and to learn logic and geometry.
It was so nice to go to university, to not have to own a credit card or a car, to be able to wash floors at the co-op residence, and to pay tuition for the price of a 3-G iPad today. It was not so bad either not to get arrested for smoking pot or crashing the Honeywell main frame even though one was quite a nuisance, or to play politics on the Chevron.
It was so neat to be mentored by people like Ernie Chang and Jay Majithia. The University of Waterloo in the 1970s is an unsung place of great programming. I just have to look at what people like Ron Hansen accomplished designing a chess program or what David Conroy has become. As for myself, I have actually learned C++ and Java which proves that you can teach an old dog new tricks.
How things have changed. Back then, we kicked the Marxist-Leninists off the Chevron. Nowadays, communist officials from China can come to America and get a heroes welcome at a Los Angeles Lakers game. All I will say about my life since 1979 is that I have been in France is … “I KNOW NOTHING” like Sgt. Schultz from Hogan’s Heroes.
I am especially grateful to Steven C Johnson for having inspired me to get into compilers and to Sunil Saxena for having encouraged me to come to California.
There are a lot of fun people down here from Waterloo including myself, Peter Stevens, Rick Beach, Sanjay Rhadia, David Cheriton, Dave Conroy, Kent Peacock, Sunil Saxena, John Williamson, and a whole bunch of others.
Ciaran (aka cgodonnell)
Dave Conroy
Sadly, I am not going to make it. It was touch and go right to the end, but I have to go to DC to be a witness in an ITC dispute.
Lynn and I will try and sync with the group online on Saturday.
Building larger technology companies is critical for our future economic well being, yet somehow we seem to pay more attention to the seed and startup phase. This post and a subsequent missive, Wisdom from Recent Waterloo Technology Acquisitions, aim to analyze some recipes for building technology businesses to scale first from the perspective of recent companies and then specifically through the lens of local acquisitions. This pair of posts will be based on extensive data, but the findings are intended to start discussion rather than be the last word.
The importance of building new, innovative, and large, companies can’t be underestimated regionally, provincially and nationally. Here in Waterloo, with perhaps 10 000 jobs at a single behemoth, Research in Motion, the notion of job creation is particularly topical simply to lessen our dependency on such a large company.
My sense is that, of late, most of the focus centres around making startups: small, energetic and entrepreneurial software, web and mobile companies, some simply building a mobile application. And, even with the current notion of Lean Startups or our Venture 2.0approach, there is no question that building such early stage companies is probably an order of magnitude cheaper than it was back in the 1990’s While undoubtedly a good thing for all concerned – founders, investors and consumers all have so much more choice – has this led to a corresponding increase in new major businesses in the technology sector?
I see this as more of a discussion than a simple answer, and thus to start, I include the following table of my sense of how the numbers have changed over time. The following table provides some idea of how company formation has trended over the last 25 years, through the lens of scale rather than acquisitions:
[table “” not found /]
NOTES ON DATA:
Sources: public records, internet, personal recollections and interviews with 20 key ecosystem participants.
The definition of “big” is purposely somewhat arbitrary (and perhaps vague). I am using a threshold of 50 employees or $10 million in revenues, which is probably more indicative of these startups becoming mid-sized businesses.
INITIAL INSIGHTS:
This data, while helpful, can never provide a complete answer. However, it can guide the conversation around what I see to be an important economic mission for our region and country – that is, building more significant technology businesses. I’m sure there are no easy answers, but in shaping policy, it is important to base decisions on informed debate and research.
To that end, I would offer the following thoughts:
The current plethora of “lean startups” does not (necessarily) represent a clear path to growing those startups into larger businesses.
I suspect that, in some ways, multiplying small startups can retard the growth of larger companies. That said, the data are insufficient to prove cause and effect.
At the ecosystem level, we need to focus resource allocation beyond simple startup creation to include building more long term, and larger, technology businesses. Instead of spreading talent and other resources thinly, key gaps in senior management talent (especially marketing) and access to capital (B rounds and beyond) need to be resolved.
Even in day to day discussion, the narrative must shift so that entrepreneurism isn’t just about startups, to make company building cool again.
Canada holds many smart, creative and hardworking entrepreneurs who will undoubtedly rise to the challenge of building our next generation economy. Meanwhile, I’d welcome comments, suggestions and feedback on how we can build dozens or more, instead of a handful, of larger technology companies in our region.
A marvellous exploration of a research and innovation powerhouse that, even viewed from this age of innovation, surprisingly anticipated many approaches we think of as modern breakthroughs. I’ve long admired Bell Labs and feel that many of its researchers and innovations interacted with an impacting my own career. While in University, the notion of working with or at Bell Labs was the highest aspiration for top thinkers in many fields. The Idea Factory is an engaging read and showed me how limited my understanding of that institution really was.
First of all, from the 1920s to the 1980s, it was way ahead of its time as an agent of innovation. The approaches were brilliant and could be applied today, including the notion of building architecture and organization structures to encourage interdisciplinary collaboration. Breaking down “knowledge silos” was definitely countercultural in a century known for specialization.
Secondly, the sheer number of transformational inventions, including the laser, transistor, fibre optics, satellite communications, the cellular mobile network, integrated circuits and the notion of information as digital that came from a single institution is both surprising and would be impossible in today’s world. Sadly, in the modern competitive marketplace, there is likely no room for a monolithic regulated monopoly, as was AT&T, to support such a single engine of innovation and basic research.
My primary connection with Bell Labs was through computer science with innovations such as UNIX and C Programming Language. The historical context this book outlines shows how surprising this is because AT&T was, by regulatory decree, precluded from entering the computer industry. That said, it is ironic that most of the inventions of Bell Labs, collectively contrived to make telecommunications as a separate industry obsolete. Instead, as predicted as early as 1948 by the remarkable information age seer, Claude Shannon, much of the modern economy has by transformed by our current digital age of networked and pervasive computing.
Lastly, Gertner explores the culture of those who drove innovation. Often eccentric, and to outsiders perhaps impossible or unemployable individuals, had the sheer force of will and brainpower to achieve breakthroughs that others either hadn’t even considered or thought impossible. Given my own small town origins, the deliberate strategy of finding these small town prodigies to populate the largest research-oriented brain trust in the world resonated.
All too often, societies believe that they are the first to master innovation. Sometimes we should stop and consider successful strategies from the past. Far from being solely a modern preoccupation, innovation has always been a hallmark of human advancement. Yet, with no clear place for a lucrative and regulated monopoly to fund pure research, where will the fundamental research of the future originate?
The book cites John Mayo, a former Bell Labs chief,
“Bell Labs substantial innovations, account for a large fraction of the jobs in this country and around the world”
In a world driven by global markets and the quarterly thinking of Wall Street, we really do need to consider how our next leap of fundamental research will be unleashed. John Pierce, another Bell Labs chief summarized the “Bell Labs formula” in four main points:
“A technically competent management all the way to the top. Researchers who didn’t have to raise funds. Research on a topic or system could be, and was, supported for years. Research could be terminated without damning the researcher.”
Beyond learning from the wisdom of the leading research institution, where will we find the vision and resources to enable innovation on such a transformational scale? Beyond the Venture Capital and now Angel funded technology startup ecosystem, perhaps exemplars like Mike Lazaridis‘s pioneering Perimeter Institute of Theoretical Physicswill chart a course for the 21st century.
If you are in any way connected to this story, see link to event invitation at end of this post.
In August 1972, just before the start of fall classes, a new arrival was causing a stir in the Math & Computer building at University of Waterloo – a brand new Honeywell 6050 mainframe size computer running GCOS (General Comprehensive Operating Supervisor) and TSS (TimeSharing System). The arrival of this computer (which quickly got nicknamed, “HoneyBun” and eventually “The ‘Bun”) set the stage for a whole new generation of computer innovators at University of Waterloo and was the foundation for many a computer and internet innovator.
In retrospect, it was a fortuitous time to be young and engaged in computing. A fluid group of enthusiast programmers, “The Hacks” (a variant of the term “Hackers” popularized by MIT, yet not to be confused with the later “Crackers” who were all about malicious security breaches), revelled in getting these expensive machines (yet by today’s standards underpowered) to do super-human feats. The early 1970’s was the decade when software was coming into its own as a free-standing discipline, for the first time unbundled and unshackled from the underlying hardware. The phenemena of the timing of one’s birth affecting whole careers is eerily (the years are the same as my own) described by Malcolm Gladwell in his 2009 book Outliers.
The Honeywell had a whole culture of operators, SNUMBs, LLINKs, GMAP, MMEs, DRLs, Master Mode and not to mention that infamous pitcher of beer for anyone who could break its security. To do so was remarkably easy. For example, one day the system was down, as was commonplace in those days. As it happened the IBM 2741 terminals were loaded to print on the backs of a listing of the entire GCOS operating system. Without the ‘Bun to amuse us, we challenged each other to find at least one bug on a single page of this GCOS assembler listing. And, remarkably for a system reputed to be secure, each of us found at least one bug that was serious enough to be a security hole. This is pretty troubling for a computer system targeted to mission critical, military applications, including running the World Wide Command and Control System (WWMCCS – ie. the nuclear early warning and decision mechanism).
Shortly after the arrival of the Honeywell, Steve Johnson came to the Math Faculty on sabbatical from Bell Labs. The prolific creator of many iconic UNIX tools such as Yacc, he is also famous for the quote: “Using TSOis like kicking a dead whale down the beach”. I suspect that few people realize his key role in introducing Bell Labs culture to University of Waterloo so early, including B Programming Language, getchar(), putchar(), the beginnings of the notion of software portability and, of course, yacc. It is hard to underestimate the influence on a whole generation at Waterloo of the Bell Labs culture – a refreshing switch from the IBM and Computing Centre hegemony of the time.
The adoption of the high level language B, in addition to the GMAP assembler, unleashed a tremendous amount of hacker creativity, including work in languages, early networking, very early email (1973), the notion of a command and utilities world (even pre-UNIX) and some very high level abstractions, including writing an Easter date calculator in the macros embedded inside the high level editor QED.
Ultimately, Steve’s strong influence led to University of Waterloo being among the first schools worldwide to get the religion that was (and is) UNIX. As recounted in my recent post remembering the late Dennis Ritchie, first CCNG was able to get a tape directly from Ken Thompson to run UNIX in an amazing 1973. That machine is pictured below. A few years later, several of us UNIX converts commandeered, with assistance from several professors, a relatively unused PDP-11/45 on the 6th floor of the Math building. This ultimately became Math/UNIX which provided an almost production system complement to the ‘Bun on the 3rd floor. And, even the subject of several journal papers, we built file transfer, printing and job submission networked applications to connect them.
Photo Courtesy Jan Gray
So, whether you were an instigator, quiet observer or just an interested party, we’d love you to join us to commemorate the decade of creativity unleashed by the arrival of the Honeywell 050 years ago. We’ve got a weekend of events planned from August 17-19, 2012, with a special gala celebratory dinner on the 18th. We hope you can join us and do share this with friends so that we don’t miss anyone. Check out the details here at:
And, do try to scrounge around in your memories for anecdotes, photos and other things to bring this important milestone to life. Long before Twitter handles, I was rjhoward, so do include your Honeywell userID if you can recall it.
I’ve always had the luxury to work in jobs in which I’ve had great passion for the core mission. I’ve come to realize how rare that is. And, with the twenty-first century making career and personal choices an ever more complex labyrinth, that fact is indeed a shame.
With this in mind, I was so pleased to be pointed to a book by Clay Christensen, one of the leading gurus of innovation with fresh insights on the topic of individual choices. As befits the author of The Innovator’s Dilemma, Christensen brings a fresh and personal perspective to the assist people in shaping their life to match personal motivation with life, relationship and career choices. I was pleased to see the issue of personal integrity covered in this book. What distinguishes this book from typical self help tomes is that, instead of providing generic answers, it defines a strategic framework for navigating the increasingly complex and personalized world.
The book is well informed by his existing recipes for strategic innovation, an example being the balance of emergent strategy with deliberate strategy. Where else could Christensen’s unique notion of “the job to be done” speak to the notion of empathy, as in intersponal relationships? Sometimes new concepts do come from other fields. In this case, the leading Harvard Business School commentary on innovation brings a new approach to an old topic.
I strongly recommend that people read this slim, yet insightful, work.
Today was a banner day for announcements involving a reset of the technology funding ecosystem in Canada.
For a long time, the slow demise of Canadian Venture Capital has concerned me deeply, putting us at an international disadvantage in regards to funding and building our next generation of innovative businesses. You may recall my 2009 post Who Killed Canadian Venture Capital? A Peculiarly Canadian Implosion? which recounts the extinction of almost all of the A round investors working in Ontario.
Since then, many of us have worked to bridge the gap by building Angel Networks, including Golden Triangle AngelNet (GTAN), where I chair the Selection process and using extreme syndication and leverage to replace a portion of the missing A rounds.
Today, the launch of Round 13 Capital revealed a new model for venture finance centred around a strong Founder Board whose members are also LPs, each with a “meaningful” investment in the fund. My decision to get involved was based both on this strongly aligned wealth of operating wisdom coupled with the clear strength of the core team.
The launch was widely covered by a range of tech savvy media, including:
To illustrate the both the differentiation of Round 13 and show the depth of founder experience, Bruce Croxon, indicated that the founders board has, measured by aggregate exit value, built over $2.5 billion of wealth in Canada. It is this kind of vision and operational experience that directly addresses the second of my three points that Canadian Venture Capital needs to solve.
It is exciting to be involved with the unfolding next generation funding ecosystem for technology companies of the future. Time will tell the ultimate outcome, but I’m certainly bullish on Round 13.
Mobile user experience has, as it were, come up from the Farm and we are now definitely in Paree. It’s hard to imagine how things could get much better, yet an even more exciting future in mobile will undoubtedly unfold. The pace of change has been almost mind boggling, with Android appearing to move almost twice as fast as iOS, the more proprietary Apple platform running iPhone and iPad.
Pitching in Istanbul
Eric Manning
Gary Sager
Richard Sexton
Stefan Vorkoetter: Wow! I remember using that machine in the 80s. It must have been kept alive for quite a while if it was installed 40 years ago.
Judy McMullan: It was decommissioned Apr 23, 1992
Brenda Parsons: The 6050 or the Level 66 or the DPS8 — wasn’t there a hardware change in there somewhere before ’92?
Jan Gray: Thanks for explaining the S.C. Johnson connection. I had no idea how the Unix culture came to Waterloo.
Ciaran O’Donnell
Dave Conroy
Photo Courtesy Jan Gray
1 Jan 2014
0 CommentsIce Storms Highlight Canada’s Obsolete Infrastructure
As we enter 2014, well into the 21st Century, one lesson for me from the year just past was that Canada seems to be hobbled with 19th century infrastructure. Let me explain.
During 2013, my home in Ontario was subject to not one, but two, different ice storms – in April and December. Both brought down large chunks of trees and both caused multi-day electrical power outages. In decades, this is the first time I can recall losing power for more than 1 day. To have this occur twice, with a combined 8 days of power outage, in a single year is even more striking.
After the first ice storm in April, I recall discussing this with a European colleague who was surprised by the very notion of a power outage. From a European perspective, he suggested the last power outage, of any length, that he could recall was 30 years ago. This started me thinking about why the difference.
In Canada, we have always prided ourselves on being one of the world’s richest countries, with modern infrastructure. However, much of our infrastructure was built for a different time and need. Much of it is really a testament to truly inventive Victorian design. It was indeed wonderful but no longer makes sense in the 21st Century. So, why indeed do we still have most of our electrical power lines above-ground on poles, while the rest of the (rich) world generally buries them? Why do our railways still rely on switches that freeze in winter and need to be operated by workers with propane torches? Why is a city like Toronto paralyzed by a major rainstorm?
Our homes, utilities, drainage and much more was built for a world predating our current period of rapid climate change. Surprisingly there remain in this world Luddites, who bizarrely continue to deny the fact of climate change. While we still have much to learn, on-the-ground results are here for all to see.
I gained significant insight into these issues when as a Director of Gore Mutual Insurance Company, a leading property insurer, I attended an enlightening presentation by the poignantly named Institute for Catastrophic Loss Reduction (ICLR). This industry-funded organization is a world leader, collaborating globally in research and advocacy around the causes and solutions for large scale insurance losses, known in industry jargon as a Catastrophe or even a Cat.
ICLR gathers data and works with many academic researchers to increase both understanding and awareness of what causes insurance losses. The data shows that the last ten years have seen huge increases in the number of severity of large scale losses, particularly from damaging wind, water and ice events, which are all significantly driven by climate change.
For example, with increased wind events (typically tornadoes in this area of Ontario), a call for more homes to be built with windows structurally rated to withstand 200 mph wind events makes sense.
Furthermore, climate change means that rainfall in 1 hour can equal what used to occur over 24 hours or more, with flash floods ensuing. In such an environment, instead of our historic practice of getting rid of water as quickly as possible, it is better to slow it down and buffer the potential for flash flooding.
For me, the power outages are a metaphor for how we in Canadian society need to look at our infrastructure with a sense of long term vision. We really need to invest to upgrade utilities, transportation and drainage for the needs of the 21st century. This in no way takes away from the heroic efforts of Hydro workers over the holiday season. I’m simply surprised that attention has never been focused on the root cause and long term prevention.
In an era of political infighting and embarrassing city Mayors, I’m wondering where the leadership necessary to achieve this will come from?
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