10 massive announcements from Google I/O: A new version of Android is coming for cars, smartwatches and TVs6:48AM | Thursday, 26 June
Google’s head of Android, Sundar Pichai, delivered a keynote speech overnight to the tech giant’s annual developer conference, Google I/O. In terms of big announcements, he didn’t disappoint, with key points including a new version of Android – called Android L – that will work with smart cars, wearables and TVs. For small businesses, a major piece of news is Google Drive for Work, a new cloud computing product set to go head-to-head with Microsoft’s Office 365 and OneDrive. The new product will cost businesses just $US10 per user per month, and allow them to access unlimited storage. Where Microsoft bumped its storage limits to one terabyte earlier this week, Google will allow individual files of up to five terabytes in size. Meanwhile, Google Docs, Sheets and Slides are now able to create or save Microsoft Office files in both Android and Chrome Browser, with support coming soon to iOS. Here are 10 other massive announcements from the Google I/O keynote: 1. Android is absolutely hammering Apple in the marketplace Sorry Apple fans, but the iPhone has well and truly been left in the dust. According to figures read out during Pichai’s keynote, the number of users to have actively used an Android smartphone in the past 30 days has grown to over a billion. This is up from 77 million in 2011, 233 million in 2012, and 538 million last year. But it’s not just in smartphones that Apple is being left behind. Google revealed that in 2012, 39% of all tablets ran Android, growing to 49% last year. This year, that has grown to 62%. In even worse news for the iPad, those figures exclude non-Google Android devices such as Amazon’s Kindle. As if Google needed to stick the boot in to Apple further, Pichai told the conference: “If you look at what other platforms are getting now, many of these things came to Android four, maybe five years ago.” The quote was a reference to a number of features, such as maps, text prediction, cloud services, widgets and support for custom keyboards, which have long been features of Android since around version 1.5, but have only recently been added to iOS. 2. Android L, with a new app platform and interface The biggest news out of the conference was, of course, the newest version of Android, codenamed “Android L”. The latest version is designed to power a range of new devices, including wearables, cars and TVs. The assumption will be that while users will always carry their mobile around with them, they are increasingly likely to be simultaneously using a second device. Cosmetically, the new version will be built around a new, “flat” design language called “Material”, which bears a slight resemblance to Microsoft’s tile interface. The new interface will be carried through Google’s mobile apps, including its Chrome web browser. However, the biggest changes are under the hood, with Android L getting upgraded to 64-bit. It also adds BlackBerry-style containerisation separating work and personal apps. Meanwhile Dalvik, the app runtime environment used in Android, is getting dumped in favour of the new Android Runtime Environment (ART). For most developers, the change will mean better performance with no need to change their code. ART is also truly-platform, meaning developers will be able to write apps once and deploy them to devices running Intel x86, ARM or MIPS processors. Android L will be available to developers starting from today. 3. Android Wear One of the big growth areas for mobile device makers is in wearables. Google has developed a platform for these devices, known as Android Wear, which it demonstrated at the conference. “Android Wear supports both round and square displays, because we think there will be a wide array of fashionable choices,” said Pichai. As many have predicted, notification cards and Google Now integration are key features of its wearables platform. LG has made its first Android Wear device, the LG G Watch, available for pre-order, while Samsung is releasing a version of its Gear smartwatches that runs Android Wear, known as “Samsung Gear Live”. Meanwhile, Motorola’s smartwatch, with a round clockface, will be available later this year. For developers, Google has made a software development kit (SDK) available allowing for customer user interfaces, support for voice actions, and transferring data to or from a smartphone or tablet. This article continues on Page 2. Please click below. 4. Android Auto Google has also released its smart car platform, known as Android Auto. Google says it has now signed up 25 major auto makers to the platform, including Ford, Honda, Hyundai, Chrysler, Chevrolet, Volvo, Volkswagen, Kia, Renault, Mitsubishi, Subaru, Skoda, Jeep, Suzuki and Nissan. Android Auto will be able to be driven by voice commands, and is designed to make app development for cars as simple as developing apps for smartphones and tablets. Again, for developers, Google has released an SDK allowing for car and auto apps. Key focuses for the platform are navigation (Google Maps), communications (both audio and messaging) and streaming audio services. Android Auto also contains a screen that displays notification cards in real time. 5. Android TV Google’s new smart TV platform, announced during the keynote, is known as Android TV. It can be used to power a range of different devices, from smart TVs to set-top-boxes and dedicated streaming sticks. Android TV allows the user to use their smartphone, tablet or smartwatch as a voice-powered remote control for their TV. Android TV devices will include all the functionality of ChromeCast, but also add the ability of directly running apps directly. 6. ChromeCast Speaking of things TV related, Google says its low-cost ChromeCast sticks are currently outselling every other streaming device combined. New capabilities coming to the sticks include a new section on the Google Play app store for apps designed with added ChromeCast capabilities. ChromeCast owners will soon be able to mirror the screen of their Android smartphone or tablet wirelessly on their TV screen. Users will also soon get the capability of sending content to a ChromeCast device by logging in with a PIN, even if they aren’t on the same WiFi network. Another new feature is that users will be able to set a picture or photo as a wallpaper on their ChromeCast for when they’re not using the device. 7. Android L integration with ChromeBooks Up until now, Google has maintained two separate operating systems: Android for smartphones and tablets, and Chrome OS for its ChromeBook series of laptops. A massive update for Android L is that ChromeBooks will now be able to run Android apps. Meanwhile, apps running on a users’ tablet or smartphone will be mirrored on the screen of their ChromeBook device. 8. Google Fit At Apple’s WWDC, the introduction of a health framework was one of the largest announcements. Given the sheer volume of announcements at Google I/O, the introduction of Google Fit is almost an afterthought. Basically, like Apple HealthKit, Google Fit is a single set of APIs that blends data from multiple apps and devices to create a comprehensive picture of a users’ health. Google is promising a developer preview of Google Fit in the next few weeks. 9. Google Play Already, I’ve noted one big upgrade to Google Play, namely the addition of a section dedicated to apps with ChromeCast playback. Presumably, there will be similar sections dedicated to Android Wear and Android Auto. But there are other changes afoot for Google’s Play download store. First, Google says that it has paid out $US5 billion to app developers over the past year, which is two-and-a-half times higher than a year earlier. Second, Google also announced the takeover of a startup called Appurify, which will provide automation services for apps being developed either for Google Play and Android or iOS. And thirdly, for those interested in games, Google Play is adding the ability to save a snapshot of your progress in a game to the cloud, as well as special quests for games. 10. Cloud tools and services Last, but certainly not least, Google has added a range of new cloud tools and services. These include Cloud Monitoring, which provides a dashboard with real time metrics for apps running in Google’s cloud services. A second, called Cloud Dataflow, is a data pipeline service similar to Amazon’s Data Pipeline. And a third, called Cloud Debugger, allows developers to more easily trace slowdowns in cloud-based apps. This article first appeared on Smart Company.
Amazon, the e-commerce internet giant, is launching its first smartphone. Media attention is focusing on whether the phone’s features, such as its rumoured 3D interface, are really as cool as portrayed in its trailer video which aims to wow early users. But by entering into the fray of an already hyper-competitive mobile phone industry, Amazon is doing a lot more than adding another gee-whizz feature to a smartphone. This launch tells us a great deal about CEO Jeff Bezos' strategy for his company – and what it might mean for the future of competition and innovation in our increasingly digital world. First, let’s ask the obvious questions. Why is Amazon, known for internet retailing and related software development, entering a hardware market where leading incumbents like Nokia have already failed? After all, what does Amazon know about the telecoms business? Can it succeed where Google has failed? We have seen Google, which has virtually limitless financial resources, enter the mobile phone handset industry by purchasing Motorola Mobile in 2012, only to take a heavy loss after selling it on less than two years later. Even incumbent firms who had a very strong set of phone-making capabilities have taken tough hits in this turbulent market – witness Nokia’s dramatic plunge, which led to a sale of its mobile phone business to Microsoft. Platform Number 1 You cannot understand Amazon’s move without situating it in the broader context of platform competition. Platforms, these fundamental technologies such as Google search, Facebook and the Apple iPhone, are the building blocks of our digital economy. They act as a foundation on top of which thousands of innovators worldwide develop complementary products and services and facilitate transactions between increasingly larger networks of users, buyers and sellers. Platform competition is the name of the game in hi-tech industries today. The top-valued digital companies in the world (Amazon, Apple, Google, Facebook) are all aggressively pursuing platform strategies. App developers and other producers of complementary services or products provide the armies that sustain the vibrancy and competitiveness of these platforms by adding their products to them. The more users a platform has, the more these innovators will be attracted to developing for them. The more complements available, the more valuable the platform becomes to users. It is these virtuous cycles – positive feedback loops, or “network effects” – that fuel the growth of platforms and transform them into formidable engines of growth for the companies and developers associated with them. The smartphone is a crucial digital platform. Achieving platform leader status in this space is a competitive position all the hi-tech giants are fighting for. Google has its ubiquitous Android operating system, Apple has shaped the whole market with the iPhone, Microsoft has purchased Nokia’s phone business, and Facebook has invested $19 billion in WhatsApp among other acquisitions for its growing platform. In fact, I suppose I should have rephrased my question a little earlier – why hasn’t Amazon already staked its claim to lead this digital space after having launched its Kindle Fire tablet and Fire TV set-top box? Opening the door Simply put, the smartphone is the main gateway to the internet today, and, in the hand of billions of users throughout the world, is the physical embodiment of a conduit that links those users to each other and to the whole content of the internet. There are almost 7 billion mobile phones in the world (and only 1 billion bank accounts). And the trend is staggering. Mobile payment transaction value surpassed $235 billion worldwide in 2013, and is growing at 40% a year, with the share of mobile transactions already reaching 20% of all worldwide transactions. So, while risky, Amazon’s entry into the smartphone business is a classic play: a platform leader entering an adjacent platform market that is also complementary to its primary business. All platform leaders aim to stimulate complementary innovation (think how video game console makers aim to stimulate the provision of videogames), and they often attempt not to compete too much with their complementors in order to preserve innovation incentives. But at some point all platform leaders start to enter these complementary markets themselves. Google has done it through Android, Apple has done it with iTunes, Facebook has done it with Facebook Home. It happens when platform leaders feel threatened by competition in their core market, or when they want to steer demand, competition and innovation in a particular direction. The idea is to use their own user base as well as their own content and technologies to create an unassailable bundle, one that is difficult for external competitors to break into. Think of it as creating barriers to entry, while expanding the core market. The reasoning behind entering a complementary market is well known, and related to the benefits of bundling. In the case of hi-tech platforms, the benefits are even stronger. By optimising and controlling the interface between a platform and complements, a company can have a structuring impact on the evolution of the platform ecosystem – and that means on all the innovators around the world that invest and make efforts to develop complementary products and services. In your hands So, these are the reasons why Amazon is entering the mobile phone market, despite the difficulties inherent in taking on an über-competitive market. This strategic choice makes a lot of sense. As to whether Amazon has a fighting chance of succeeding, there are reasons to be optimistic. Beyond its deep financial resources, Amazon has learned something of what it takes in the development and successful commercialisation of various versions of the Kindle. That has given it expertise in hardware, on top of its software background, and should prove a useful training ground to allow it to launch other consumer products such as the smartphone. But the ultimate judge will be you, gentle readers. Will you be willing to swap your favourite mobile phone for a yet another new kid on the block, even if it does let you browse Amazon’s ever-growing catalogue in splendid 3D? Annabelle Gawer is Associate Professor in Strategy and Innovation at Imperial College Business School. This story was originally published at The Conversation. Read the
Amazon has unveiled its long awaited smartphone – Fire. Features include Dynamic Perspective and Firefly, which the company is describing as breakthrough innovations that “let you see and interact with the world through a whole new lens”. Dynamic perspective uses a new sensor system to respond to the way you hold, view and move Fire. Firefly quickly recognises things in the real world – web and email addresses, phone numbers, QR and bar codes, music, movies, and millions of products which can be added to your Amazon shopping cart. It has a Quad-core Qualcomm Snapdragon 2.2 GHz processor, 4.7 inch HD display and is set to be released on July 25. Canadian court orders Google to block websites worldwide The Canadian Supreme Court has issued a temporary injunction which requires Google to block a group of websites from its search engine. The decision came despite arguments from Google’s lawyers that the Canadian courts did not have jurisdiction to make such an order. App that just says ‘Yo’ raises $1 million in investment The app, which took eight hours to build, allows users to send the word ‘Yo’ to their friends. Founder Or Arbel says the app deals with “context-based communications”. The app, which was released on April Fools’ Day this year, has raised $1 million in investment and has over 50,000 users, according to ThinkProgress. Overnight The Dow Jones Industrial Average is up 98.13 to 16,906.62. The Australian dollar is currently trading at US94 cents.
According to SEEK co-founder and Square Peg chief executive Paul Bassat, payments are the “holy grail of innovation”. He made the comment at The Australian Financial Review and Macquarie Future Forum on Tuesday, where some of Australia’s leading entrepreneurs declared the industry ripe for disruption. Despite banks in Australia being protected by complicated regulations, entrepreneurs are placing the industry under increasing pressure. Adding to banking woes are the likes of Google, Amazon, Apple and Facebook eyeing entry to the payments market. Here are the top four Australian disruptive financial services startups to watch: 1. Society One Society One is Australia's leading peer-to-peer lending platform, with a $5 million investment from Westpac’s Reinventure Group, a $50 million fund set up to back early stage startups. It’s rumored to be on the investment radar of both James Packer and Lachlan Murdoch. Borrowers list loan requirements and investors decide which loans they choose, how much to invest in each loan, and the rate at which you want to earn their interest. Its personal loan rate for a prime borrower is 9.80% pa, 5% lower than the average rate from the major banks. 2. Tyro Payments Tyro provides credit, debit and EFTPOS card acquiring services and does not take money on deposit. It was founded in 2003 by ex-Cisco employees Peter Haig, Andrew Rothwell and Paul Wood as MoneySwitch Ltd. Eleven-year-old Tyro is in its second year of profitable business operations. Disrupting the Australian banking industry was never going to be easy, and it took the team over $30 million in capital and a founder break-up to get there. At launch it was the first new entrant into the eftpos space in 15 years. 3. Pin Payments Pin Payments is an Australian-based startup operating from Melbourne and Perth that offers onsite payments and a developer API without the need for a merchant account. It received a grant from Commercialisation Australia and partnered with some of the Australian banks to make its offering possible. Both overseas-based Braintree and Stripe operate in the same space, but Pin has a solid local focus. Getting access to a payment system has previously been a juggle for companies, especially early stage ones. Pin Payments is aimed at developers who can easily integrate its service through their API. 4. CoinJar CoinJar, a Melbourne-based bitcoin exchange and payment system, which has raised $500,000 in seed funding from a range of individual investors and the Blackbird Ventures seed fund. Launched in February by Asher Tan and Ryan Zhou, CoinJar has over 10,000 active users in Australia. The company charges a low single-digit percentage fee for each transaction. CoinJar was the first company to get its Bitcoin app re-listed in the iPhone App Store, after Apple revised its app guidelines to include virtual currency apps that it previously excluded.
Thousands of black cab drivers in London have protested against technology-enabled taxi services such as Uber. They are upset that Uber allows its users to call a cab with their mobile phone and the fare is worked out using a mobile phone and GPS. Cabbies compare this to a taximeter, which legally only black cabs are allowed to use in London. The protests come just as Uber launches UberTAXI in London, which is open for black-taxi drivers to use unlike its uberX, EXEC and LUX services. Amazon has another supplier confrontation Amazon is refusing to sell upcoming Warner Home Video features as part of its effort to gain leverage in a confrontation with a supplier. In a standoff with Hachette Book Group, Amazon is refusing to take advance orders and delaying shipments. The two are currently negotiating e-book terms. Apple tax schemes under investigation European authorities have launched a probe into whether Apple’s corporate income tax arrangements in Ireland are legal, or whether they qualify as unlawful state aid. Ireland is the base of choice for many large tech companies’ international operations because of a low corporate tax rate and other favourable laws. Overnight The Dow Jones Industrial Average is down 102.04 to 16,853.88. The Australian dollar is currently trading at US94 cents.
Amazon plans to launch a marketplace for local services – a term which encompasses anything from babysitters to tradespeople, according to a Reuters report. The e-commerce giant will gauge demand and test logistics before beginning the expansion of the service, much like the way it launched its grocery delivery service Amazon Fresh, which was initially tested in Seattle before expanding to San Francisco and Los Angeles. Google acquires Skybox Imaging Google has paid $500 million in cash for Skybox Imaging, a company that provides high-resolution photos using satellites. In a statement announcing the acquisition, Google says Skybox’s satellites will help keep Google Maps accurate with up-to-date imagery. “Over time, we also hope that Skybox’s team and technology will be able to help improve internet access and disaster relief – areas Google has long been interested in,” the statement says. About.me raises $11 million About.me, the startup that enables its users to create a simple page where you can find information about them online, has announced it has raised $11 million. The company says it will use the money to invest in new features and to make its platform easier to use. Overnight The Dow Jones Industrial Average is up 2.82 to 16,945.92. The Australian dollar is currently trading at US94 cents.
Amazon’s move to patent the process of taking a picture of an object against a white background makes Australian startup Pixc stronger, according to founder Holly Cardew. Pixc is a web-based service aimed at online retailers that photoshops the background out of pictures and replaces it with a white background, within 24 hours for a small fee. Amazon recently made waves when it applied for and received the patent, which details a process using a camera and lighting and a particular studio arrangement in order to take a picture of an object against a white background. The patent includes a work flow chart that describes the process as follows: start, activate rear light source, activate front light source, position subject on elevated platform, initiate capture, end. “It shows how serious Amazon take their white backgrounds,’’ Cardew says. “This shows both to our customers and investors that white backgrounds are the key to selling a product online.” The decision to grant Amazon the patent had been widely mocked and some have gone so far as to call it the silliest patent ever awarded. “I think if you have the money and the right lawyers anything is possible, unfortunately,’’ Cardew says. “I am curious how they are going to enforce this as photographers have been using this technique for years. “The photographers are the ones who should be concerned as they will have to do more post photo editing, which means that companies like Pixc are even more relevant.” Cardew says Pixc doesn’t own a patent on the process it uses to produce its images of objects on a white background and she points out the structural advantages that behemoth’s like Amazon enjoy. “I wouldn’t get a patent unless I knew I had the funds or lawyers to fight it,’’ she says. “It can cost a lot to get a patent but unless you can enforce it, it is worthless.” Pixc is part of the Telstra backed muru-D accelerator program and Cardew is in the United States on a visit organised by the program where they are hoping to gain exposure to the US market.
Amazon is giving English and American customers the chance to shop without leaving Twitter. The online shopping giant is rolling out a new feature called #AmazonCart, which allows users to connect their Amazon and Twitter accounts and add products to their Amazon shopping basket by simply replying to any tweet containing an Amazon link, with #AmazonCart Apple and Samsung damages recalculated A US federal jury has recalculated the damages awarded in the court case involving the two smartphone competitors. The jury raised the amount owed for some patent infringements and lowered it for others. The changes offset each other meaning the total damages awarded in the new verdict stay the same as the original. The court awarded Apple $US119.6 million for patent infringements and Samsung $US158,400. Google and Facebook top three in tech by 2020, Apple not? One of the world’s top tech investors, Fred Wilson of New York’s Union Square Ventures, believes Apple will cease to be important by 2020. Wilson, speaking at the TC Disrupt conference in New York, said Apple is too rooted to hardware and isn’t invested enough in the cloud, something he says will provide the company significant challenges moving forward. Overnight The Dow Jones Industrial Average is up 17.66 to 16.530.55 and the Australian Dollar is trading at US93 cents.
Check-in app Foursquare is splitting into two separate apps. One of the apps will retain the Foursquare name and will be aimed at discovering new venues, while the other, will be known as Swarm and will continue Foursquare’s more familiar task of checking into locations. According to an announcement on Foursquare’s blog, Swarm will be available on iOS and Android in the coming weeks, and soon after on Windows Phone. New Snapchat mixes video and texting Mobile app Snapchat has added the ability to send text-only messages that disappear as well as the ability to video chat with other active app users. In a statement on its blog the Snapchat team said they felt the app was missing an important part of conversation – presence. “There’s nothing like knowing you have the full attention of your friend, while you’re chatting,’’ the statement said. Amazon smartphone photo allegedly leaked A photo claiming to be Amazon’s long awaited but as yet unannounced smartphone has appeared on tech news website Boy Genius Report. The website says “multiple trusted sources” have verified the authenticity the photo of the phone, which features a smartphone with Amazon branding on the back. Overnight The Dow Jones Industrial Average is down 21.97 to 16,558.87. The Australian dollar is currently trading at US93 cents.
Google has announced the takeover of drone aircraft manufacturer Titan Aerospace, outmanoeuvring Facebook in the process. As SmartCompany reported in early March, Facebook was believed to be interested in launching a $60 million bid for the drone aircraft maker. At the time, it was believed the social media giant was primarily interested in Titan’s technology in a bid to launch affordable, low-cost internet services in emerging markets. Titan’s drones – dubbed “atmospheric satellite platforms” by the company – fly at an altitude of nearly 20 kilometres and are equipped with solar panels, allowing them to continuously remain in flight for up to five years without needing to land. While most of the content on its website has been removed since the announcement, the New Mexico-based drone aircraft manufacturer originally described its primary market as being for high-resolution imaging. “Titan Aerospace provides persistent solar atmospheric satellite platforms to global customers for easy access to real-time high-resolution images of the earth, voice and data services, and other atmospheric-based sensor systems,” the company stated on its website as of March this year. A Google spokesperson emailed SmartCompany and said providing internet access was one of the key benefits of purchasing Titan. “Titan Aerospace and Google share a profound optimism about the potential for technology to improve the world. It’s still early days, but atmospheric satellites could help bring internet access to millions of people, and help solve other problems, including disaster relief and environmental damage like deforestation.” In June of last year, Google announced Project Loon, a project using hot air balloons to deliver broadband services to remote areas. Meanwhile, interest in drone aircraft has intensified after online retail giant Amazon announced plans to deliver customer orders using unmanned aircraft in December of last year. This story first appeared on SmartCompany.
Amazon is believed to be gearing up to release a smartphone in the second half of this year, according to reports in the Wall Street Journal. The tech and online retail giant is believed to have demonstrated prototype handsets to developers in recent weeks, with an official announcement planned by the end of June ahead of a September launch. A key feature of the new device is said to be a 3D screen that doesn’t require special glasses, a feature the company hopes will differentiate its device from competitors, including Apple and Samsung. No dotcom crash despite stock falls, say US analysts Leading analysts in the US say another ‘90s-style tech crash is not likely, despite recent falls on the tech-heavy Nasdaq index. “What I'm looking for is really more or less a re-alignment in a somewhat orderly fashion,” BMO Private Bank chief investment officer Jack Ablin says. “A new appreciation for dividends, for cash flow, for earnings and for revenues - things that investors should be looking for all the time. “Investors are starting to move away from markets that seem expensive and are gravitating toward markets that have a better value so, all and all, I think it’s probably a cathartic cycle that's going on right now.” Smaller David Jones stores coming after SA Woolworths takeover South African department store operator Woolworths Holdings says it is looking at introducing smaller format David Jones stores if its takeover of the Australian department store chain is successful. Last week, the South African Woolworths, which is not affiliated with the Australian retailer of the same name, surprised investors by announcing a $2.15 billion takeover bid for David Jones. “I think we see three obvious [sites] within the next couple of years. I believe we can get to double digits in time – but it's going to take time,” Woolworths Holdings chief executive Ian Moir said. “What we will not do as a business is make bad real estate decisions. So you need to make sure you have got the right demographic and the right position within that demographic.” Overnight The Dow Jones Industrial Average is down to 16026.8. The Aussie dollar is down to US93.97 cents.
It takes a gusty entrepreneur to start a pitch claiming Amazon’s plans for drone deliveries are vaporware, and then that his tiny team can and is pulling it off. But that’s exactly how Sydney-based drone startup Flirtey’s Matthew Sweeny kicked off his pitch at one of the Startmate accelerator demo days recently. He’s one of eight Australian startups hitting the shores of the United States with hundreds of hours of pitch practice behind them, in a bid to woo early stage investors with their bright ideas. Sweeny told StartupSmart they believe they’re ahead of the curve with the incoming surge of accessibly priced robots. “Our vision is a future where flying robots are low cost and ubiquitous,” Sweeny says. “I founded Flirtey because I realised there had been no innovation in delivery for a long time and wanted to develop a disruptive technology that would create a new industry.” The idea for drones emerged for Sweeny while he was studying in China and tinkering with helicopters in his spare time. Realising the technology was at an inflection point, Sweeny decided he wanted to be part of making drones mainstream. The Flirtey technology was developed with the assistance of the University of Sydney's Warren Center for Advanced Engineering. The drones operate on rechargeable lithium polymer batteries. Sweeny says they can carry parcels of up 2kg for a range of up to 10km. They use GPS to locate customers, and may be tracked via smartphone in real-time. “The market opportunity is enormous, we're in discussions with some of the world's largest online retailers for UAV delivery,” Sweeny says. As for the regulations around drones: Australia is apparently a good place to start, as it has already legalized commercial UAV flights. Flirtey previously partnered with a textbook startup Zookal (video below) to demonstrate what the technology could do. The story garnered some international media attention, with some reporters believing the hype was a little premature Flirtey Zookal flight from The PR Group on Vimeo. Beyond ecommerce deliveries, Sweeney says the drones could also be used to deliver food and even urgent blood and medical supplies. But it’s not going to be simple. Other than Amazon, Flirtey is just one of 219 drone startups registered on Angel List.
The secret to Airbnb’s freakishly rapid orgy response: “Scenario planning”. Yes, there is a business story in here. On FastCompany, Austin Carr explores how Airbnb used strategic thinking to prepare the business for just such an occurrence. “He and Chesky came up with a game plan for how to respond to a range of incidents,” Carr says. “The aim was to make sure its hosts and guests feel safe and cared for in any situation.” Cheap words: Amazon is good for customers but is it good for books? George Packer charts Amazon’s rise to global dominance and argues the online behemoth has destroyed the publishing industry as it has reinvented it. “Publishers are less like abused minors and more like financially insecure adults who rely on the support of a bullying uncle,” he says. “Their dependence breeds bad faith.” As Amazon spreads its tentacles into an increasing number of product categories, the fate of the publishing industry is a cautionary tale. On Instagram, a bazaar where you least expected it. Instagram wasn’t designed as an e-commerce site, but in The New York Times Jenna Wortham argues the social network can offer shoppers the thrill of discovery.
By definition, every start-up plans to get global sooner or later. But scaling a business poorly is one of the fastest ways to kill it, according to two Stanford lecturers. Robert Sutton and Huggy Rao have recently released Scaling up Excellence, which explores how companies from tech superstars to fast food chains have grown and gotten stronger. “Start-ups need to start thinking about scaling a lot earlier than they do,” Sutton says, who adds you don’t need to a perfect organisation to scale well. “A lot of times when people think of scaling up, they think they’re going to focus on the great stuff and spread it. But when you look at organisations that have nailed scaling, they’ve gone from bad to great.” Sutton spoke to StartupSmart from San Francisco about the five biggest myths about scaling and how to overcome them. Myth 1: Scaling is all rapid growth through fast decisions While the scaling story of tech superstars Twitter, Google and Facebook can make it sound like every decision was instant and the implementation took only a tiny bit lower, Sutton says all scaling companies slow down to take the time they need to make the decisions where it matters. “In every case we’ve looked at, including those three, this notion they rushed all the time is just not true. From Google to even Starbucks, all successful global companies go slow sometimes.” A key time to focus on results rather than execution time is hiring staff. “From the very beginning, Google was always very picky about hiring. They only hired very technically skilled who also had the leadership skills to grow with the company no matter how badly they needed a warm body in that chair,” Sutton says. He adds founders shouldn’t shy away from the arrogance these decisions and the corresponding belief the company could become massive requires. Myth 2: Conflict will kill a company As companies grow, arguments are inevitable as teams choose what to focus on. Sutton says learning how to argue well is a critical skill for a scaling company. “To make the best decisions, you need to be clear on how you argue and when you stop arguing. Good teams can have blazing arguments and then move on.” Sutton says part of the success of many tech superpowers has come down to having founders, and later managers and executives, who are willing to model vigorous arguments followed by a resolution all commit too. “Firefox’s John Lilly (chief executive 2008 to 2010) oversaw the company’s growth from 12 to 500,” Sutton says. “He told me he started realising at about 80 people that people had begun to act as though they were afraid of their boss. So he just started having arguments with his immediate team whenever he could. He’d be right or wrong but would always end respectfully and move on.” Sutton says making sure everyone shares an understanding of what medium-term success looks like makes it easier to resolve disagreements and unites a team. Myth 3: Scaling means building the team as quickly as possible According to Sutton, one of the most dangerous myths about start-ups is the belief bigger is better when it comes to teams. “The notion that scaling mandates adding more people is a myth. There is lots of evidence that when you bring on board the wrong people too quickly, it’s deadly.” The pressure to build the team often comes from investors who are keen to see their money put to work. “I can’t tell you how many times I’ve seen a start-up still in the product development stage kill itself by hiring sales staff before they’re ready. These guys need to sell, so they sell a product that’s not ready and it’s over,” he says. Sutton says actions such as Israeli start-up Waze’s hiring freeze after raising $20 million should remind start-ups about the virtues of staying lean, as the company went on to be acquired by Google. Myth 4: Our culture will suffer and we need to stay small While cultural death by growth was the fate of Yahoo! and eBay (who later turned it around), Sutton says rapid growth won’t kill a start-up if they’re smart about it. The key to a culture thriving, as well as smarter working, is to keep teams small. “One of the mantras at Amazon is you shouldn’t have a team that can’t be fed by two pizzas,” Sutton says. “The difference between a five person team and say an 11 person team is huge. From battlefields to big corporates, all the evidence shows the maximum is seven before it dissolves into interpersonal contests and missed communications.” Small teams organised in pods is an emerging trend in start-ups. Australian start-up 99designs has used a pod approach for over a year. Sutton adds that scaling can make deeper cultural issues more significant as the organisation widens and effective communications requires more effort. “When you’re trying to scale an organisation and you have destructive behaviour or people, the first order of business is to nip that in the bud because otherwise it’s impossible to grow well.” Myth 5: Bureaucracy and hierarchies should be shunned as they stifle innovation and productivity One of the joys of start-ups is team flexibility. But start-ups need to implement some structure and processes if they want to become global companies. “Staying entrepreneurial and easy to get things done is admirable, but there is a lot of evidence that shows companies need managers, hierarchy and processes,” Sutton says. “There is a fine art of adding just enough process or bureaucracy so you can actually get all the work done. I think it’s admirable that entrepreneurs resist adding that stuff, but if you don’t it’ll turn into an unruly, out of control organisation.” For early stage ventures, Sutton adds it’s essential to work out the leadership structure early or risk confused strategy direction and in-fighting.
E-commerce platform Bigcommerce has revealed the top retail categories that are seeing strong online sales growth. It’s found jewellery and accessories stores are growing fast, with Bigcommerce stores in this category seeing revenues jump 31% last year. The automotive sector is also booming, with revenue surging 89% in 2013. But in a warning for those considering a store in books, movies and music, they’ve seen revenue fall by 14% as iTunes, Amazon and Netflix continue to dominate the space. Bigcommerce has produced an infographic that illustrates where the growth in online retail is happening, and where smaller players are beating the established retail giants.
If you run an Android smartphone or tablet, did you know that there’s a good chance you might be able to run Amazon’s app store as well as Google Play? Here’s how to set it up. First, in your settings menu, look through the Applications and Security menus for an option called “Install apps from unknown sources”. If you can find it, make sure you tap it to switch it on. Next, visit this page and press the yellow “Download the Amazon App Store” button in the middle of the screen. When the download is complete, you’ll get a notification saying “AmazonApps-release.apk. has installed”. Tap the notification, tap install, and then tap open. It’s now ready to run.
This week’s session of the Next start-up development program was focused on investment, with Adventure Capital co-founder and partner Darcy Naunton presenting to 27 start-ups about investment strategies and business development. Naunton told StartupSmart he was impressed all of the start-ups were tackling genuine problems, and therefore had real potential if they focused their idea on one target market. “The focus in my answers last night was on the need to target and hone in on one market. It’s much easier to test by defining your best market and going after them,” Naunton says. “It also means the number of players and stakeholders you need to get onside are much lower.” Naunton says once an idea is proven, you can approach angel or venture capital investors, and begin expanding across verticals. “Having traction within a single vertical is enough to approach any investor for funding, provided you understand the similarities and differences of the verticals that are next on your list. This is pretty important, because each market has its own dynamics and culture of doing things,” Naunton says. The presentation also explored the changes that are required once a start-up founder takes on investment, adding they are considerable. “You need to be ready for the obligations and cultural change that come when you take on investment and become responsible for someone else’s money. From then on, as director of a company your single goal becomes to maximise shareholder value, even if that’s a detriment to your own goals and lifestyle,” Naunton says, adding most investors expect to be able to exit within five years. Naunton says for new founders with limited track records, it helps to get in touch early to start building relationships before approaching for funding. “Investment is a people game, and getting comfortable with your investors should be your top priority. Get in early and set some goals, and then achieve those milestones and communicate it back before approaching for funds,” Naunton says. He adds it was great to see the start-ups were approaching possible investment pragmatically. “I was refreshed to see they weren’t all indoctrinated into the Silicon Valley mentality, and the idea that a good idea has the right to investment and enough persistence will make it happen sooner or later,” Naunton says. According to Naunton, online marketplaces are one of the most common ideas emerging across all levels of the start-up ecosystem, from start-up weekends to accelerator s to funding pitches, but many misunderstand how complicated these are to scale. “Because it’s quite an easy to understand business model, we keep seeing a lot of marketplace ideas. But they’re really hard to build and scale, and very few successful ones have emerged from Australia,” Naunton says, adding 99designs was the stand out in this space. Naunton added Adventure Capital saw a lot of value in business to business ideas, especially those that focused on delivering and using data such as business intelligence softwares. “Another really interesting area is ideas that follow on from the Amazon web services model and carve out particular aspects of the business process, refine it and turn it into a business of its own,” Naunton says.
Amazon executives are urged by their chief executive Jeff Bezos to read three books, which he uses as frameworks for explaining the future of the company. Bezos told a CNBC tech correspondent he encourages them to read Peter Drucker’s The Effective Executive, Clayton Christensen’s The Innovator’s Solution and Eliyahu Goldratt’s The Goal. Three local entrepreneurs spoke to StartupSmart about the book that changed their lives and approaches to their entrepreneurial careers. Fred Schebesta, founder of rapidly growing comparison site Finder, told StartupSmart that Michael E. Gerber’s E-Myth helped him understand the importance of systems for driving growth. “When I first started out in business I was completely stumped by continuously briefing the same project over and over again. As I had never worked in a big company before, I didn’t have the same frame of reference as other professionals and I needed something that would help me build a business,” Schebesta says. “E-Myth taught me the importance of systems, processes and how to manage people. It completely changed my view and provided me with a fresh perspective. I often consider reading it again for inspiration!” Dan Flynn told StartupSmart reading Robert Kiyosaki’s Rich Dad, Poor Dad in his teens sparked a new way of thinking that inspired him to launch the social enterprise Thankyou Water several years ago. “The book really got me thinking about ways to generate money but also helped me understand that while school education was important, entrepreneurs had to apply business principles in order to succeed,” Flynn says. Thankyou Water has got their range of food and water products into major supermarkets after a crowdsourced lobbying campaign. “As I look back over this book again now, there was this one line that was one of the key messages in the book: ‘Failure is the process of success.’ It’s crazy how this line is even more relevant to me now, five years into the Thankyou journey. The numerous failures and setbacks we’ve experienced have taught us so many lessons, which have helped shape Thankyou as a company and our team as individuals,” Flynn says. Robin McGowan, founder of customisable commerce site for suits InStitchu, told StartupSmart Tony Hsieh’s Delivering Happiness: A Path to Profits, Passion and Purpose should be mandatory reading for every business owner. “It tells the story of Zappos and the focus they put on customer service and experience. Tony makes the point that anyone can copy your business idea but they can't replicate the level of service you provide to your customers. If you go above and beyond with your service they will keep coming back no matter what,” McGowan says.