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Monthly Archives for December 2010

Great case study on the rabbit caught in the headlights

Fred Wilson picks up on a post by Michael Mace on Blackberry maker RIM.  The debate on the future of RIM is great but the approach Mike uses would be a great teaching tool and applies to lots of other companies and industries.  I wonder if he were able to obtain the exact figures from RIM if it would make any difference.

Picking up a point made at Leweb Paris 2010, I wonder what percentage of the wealth of the two founders of RIM is still in RIM stock?  That might concentrate their minds.  But from a learning perspective, is it better that they have 100% or 0%?  Somewhere in the middle but where?  What would you do as the founder?  As an investor?

The lesson is that technology keeps moving along and you cannot blame the academics behind most start-ups in the Cambridge Cluster for selling out early.  The only critics are the people who have never started anything.  But if the significant shareholders of a company, as in the Cambridge Cluster, are academics, their main drive it to climb the academic pole and a few million made on  the side gives them cudos and something to talk about at the High Table!

It is better not to be the rabbit caught in the headlights, but if you are, which way do you jump and how far?  Or just turn tail and keep running?

Written on 12 December 2010 by Philip under Uncategorized with No Comments

Sad, but Hypertag goes down

The Cambridge Evening News reports that Hypertag has gone down with a creditors meeting arranged.  Hypertage made posters interactive but with geolocation and smart phones, the world is interactive not just posters.  Nice people buy Hypertag never got much traction.  A loss for NESTA who provided the funding.  Just reminds you that not all Cambridge companies are bought by Apple and Google.  It is tough being an entrepreneur(s).

Written on 11 December 2010 by Philip under Uncategorized with 1 Comment

Phonetic Arts sells to Google but for how much?

Google takes over Cambridge, UK, company Phonetic Arts and as seems usual with a company connected to Cambridge University (a founder is a professor) there are not financial details.  There is no indication if Cambridge Enterprise is involved so presumably there were no patents.  Funding came from Max Bautin of IQ Capital.  Great to have return to Cambridge, UK, investors.

Phonetic Arts allows sound to change in a similar way to graphics.  This is an idea we had for Tonemaker nearly ten years ago but did not execute.The price will come out in Cambridge and look forward to hearing it on the grapevine at a Christmas party.  Wonder if all 14 people will be moving to Silicon Valley or whether they will be the nucleus of Google Research in Cambridge, UK?  See below, guess they will be moving to London.

From IQ Capital:Mike Cohen, the manager of speech technology at Google, said “…Phonetic Arts’ team of researchers and engineers work at the cutting edge of speech synthesis, delivering technology that generates natural computer speech from small samples of recorded voice. There’s a particular focus right now in the U.K. on technology and innovation, and we’re delighted to be deepening our investment in the country with this acquisition. We already have a strong engineering center in London and look forward to welcoming Phonetic Arts to the team. We are excited about their technology, and while we don’t have plans to share yet, we’re confident that together we’ll move a little faster towards that Star Trek future”.

Max Bautin, Managing Partner of IQ Capital and a Phonetic Arts board member, worked with Phonetic Arts on the exit. He added “We’re delighted with this exit, which follows the sale of ImSense earlier this year. While IQ Capital Fund is continuing to actively invest and plans to make two to four further investments in the next 12 months, we are very pleased with these early successes, proving our investment model. I’d like to thank all the team of Phonetic, and especially founder CEO Paul Taylor, for their very hard work over the last two and a half years, as well as Stephen Young and David Braben, the two ‘IQ Angels’ who were of tremendous help to both us and the company since initial investment.”

Hope that the two angels did very well!!

Hat tip: Paul Hughes on Twitter


 Paul Hughes 

Google buys Phonetic Arts - 

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Written on 09 December 2010 by Philip under Uncategorized with 5 Comments

How has Groupon grown so fast?

From start-up two years ago, to there being rumours of being in discussions to be bought by Google for $5billion is quite a story.  I wondered what was there business plan resource?  I looked at their board of directors.  Of the nine people listed, nearly everyone seemed to represent an investor.

CrunchBase reports that Groupon has raised some$30million in a Series B round in December 2009 and a further $135million in a Series C round in April 2010.  The latter may have been at a valuation of $3billion and bought in new investors so a $5billlion exit seems believable.

CrunchBase sets out the case for Groupon as:

Groupon (www.groupon.com) features a daily deal on the best stuff to do, see, eat, and buy in more than 150 cities around the world. By promising businesses a minimum number of customers, Groupon can offer deals that aren’t available elsewhere.

Groupon brings buyers and sellers together in a fun and collaborative way that offers the consumer an unbeatable deal, and businesses a large number of new customers. To date, it has saved consumers more than $300 million and claims it has generated millions in revenue for the businesses it features.

Groupon originated the concept of using collective buying to get a daily deal on local goods and services, and is an outgrowth of ThePoint.com, an online community launched in 2007 for organizing all forms of group action and fund-raising around a “tipping point” of required participants.

1,000 people work in the Chicago HQ with offices opening round the world.  Not one in Cambridge, UK, sadly.  In the Daily Telegraph, Rajen Ruparell, Groupon UK director, said Groupon will have around 2.5million UK subscribers by the end of the year.  He went on to say that most of the time they are female, they are office workers and they start the day with a chat about “what did you buy, why did you buy it?”.

All linked by Facebook and Twitter to build a large enough group of people wanting to buy a product to justify a fantastic discount.

But a very different business model from the likes of eBay, Google, Twitter and Facebook which provide a structure and the leave the punters to do all the work.

When will a business like this come out of the Cambridge, UK, cluster?

Written on 03 December 2010 by Philip under Uncategorized with 42 Comments

Early retirement puzzle

Talking to a friend who may be offered a deal to leave the public sector early as part of the cut backs.  Say he earns around £30k per year, he would be offered twice that amount (one month for every year worked and say he has worked for 30 years) making a total of over £30k.  Then he would be offered a pension of about 50% and be able to commute part of his pension, say 3x his pension.  So he would be offered around £60k plus £15k per year, index linked, for life.  One way or the other, as some people say, he would receive nearly £100k plus his pension.

So if ten of his chums with similar service sit down for a farewell lunch, there will be nearly £1million round the table.  Multiply that by a few tens of thousands of people who may be leaving the public sector and there will be a sizeable chunk of cash looking for a home.

Wonder if any will chose to invest in a technology start-up and need a business plan resource?  That is the puzzle as the cash may have to last for many years and if it is left in cash or near cash with little risk, the purchasing power will decline rapidly if we have any inflation.  Touch decisions to be made.

Written on 01 December 2010 by Philip under Uncategorized with 2 Comments