Published in Whitehot Magazine, 2012. Original article here.

Art about the Unseen
Hayward Gallery, London

‘Art about the unseen’ asks a lot from us. After all, most of the works are things we cannot see: blank papers, empty pedestals, a charge in the air. So when you first step into the Hayward Gallery, all you can see are the visitors standing in silence, facing seemingly blank walls before they take a few steps, then stopping again to stare some more. But of course, this is not actually performance art, as these people are in deep concentration: invisible art demands its audience to commit fully to the experience. And if we do, we will be amply rewarded.

This large group show features works spanning between 1957 and 2012, and had it not been so well put together it may have had an ‘Emperor’s new clothes’ sense about it. If a picture paints a thousand words, what can you say about a show which does not really have any pictures at all? The empty frames and blank canvases nudge us, inviting us to dream, or draw us into their histories. If we suspend our disbelief, the only limitation to what we will take away is limited by our own imaginations.

The first images to greet visitors as they enter the gallery are from Yves Klein’s attempt to telepathically transmit ‘a great concern’, alongside a video of his display of a room filled with his ‘sensibility’. Klein wanted to capture ‘immaterial elements’ such as fire, air and water, and referencing this work is certainly relevant to the Hayward exhibition. Still, we only really start to get an understanding of what Klein was hinting at once we reach the interactive pieces, and this happens with the recreation of Terry Atkinson and Michael Baldwin’s 1966 show. Moving past a plastic curtain, the temperature drops inside the small room, courtesy of two air-conditioning units. Granted, the concept of controlling our environment was a bit more novel back in 1966, but it sets the tone of the works to come in the exhibition by priming us with an awareness of the things we cannot see.

Such as Robert Barry’s ‘Energy field’ from 1968: this is a small wooden box with a battery circuit. It is impossible to tell whether or not it is powered up, but what Barry was after was the idea of being ‘sensitive, emotionally or physiologically, to the space you are in’. Next up are references to Chris Burden’s ‘White light / White heat’ show from 1975, where the artist would lie in the gallery, out of sight, for 22 days without speaking or eating. The audience reported the room felt haunted. Back at the Hayward, immediately after Burden’s work, we encounter a sign declaring that artist Bethan Huws is here with us, roaming about in disguise as a fellow gallery visitor. This is also the point where ‘Art about the unseen’ is no longer just an exhibition, but it is turning into an experience.

A series of invisible drawings start with the works of Bruno Jakob from 1993, made from ‘invisible ink, water, steam and light’. Staring at the one called ‘The third hand’ I start to become certain I can see a hand in there somehow, or am I imagining it? Next is ‘Philosophy escaped’, made using ‘Zurich snow, water and brain energy, primed with unseen green colour’. The wonderful ‘1000 hours of staring’ by Tom Friedman is less of a visual treat and more an exercise in mind-boggling, as you picture the artist standing in front of this canvas for all those hours. Friedman’s erased Playboy centrefolds are also exhibited, again providing nothing for the eyes but a rich backstory to explore for the mind.

‘The ghost of James Lee Byars’ is a clear highlight. Of course, it does not sound like much, being just a pitch black room. But then you realise you have no choice but to walk through it to continue, feeling your way through a space where your eyes are useless. Is there a ghost in here? I can hear whispers, probably from fellow visitors, but I cannot be sure. I stand still in the dark for a moment, feeling increasingly uncomfortable and intrigued.

As the exhibition continues upstairs, this is when demands really start to be placed on the visitors. Tom Friedman’s ‘Untitled (A curse)’ is a simple pedestal, but the artist hired a witch to curse the air above it. Carsten Höller has made a parking space for an invisible car, and a room by Roman Ondák’s comes with a hidden eavesdropping device. A poster informs us that Lai Chih-Sheng has traced around every single element of this room with a pencil, down to the cracks between the tiles in the floor. Everything about this room is charged with intent.

And then Teresa Margolles takes it to a new level with ‘Aire/Air’, where two humidifying units are running on the water used to wash murder victims ahead of autopsy. It is muggy inside the dedicated room, which visitors enter without knowing what is going on as the sign is on the inside. I find myself reluctant to breathe too deeply as I make myself stay, watching two other gallery visitors turn sharply on their heels to leave once they learn what they are breathing. Margolles’ work hits you in the guts.

Jeppe Hein’s ‘Invisible labyrinth’ is the final piece of the Hayward show, providing us with headsets that buzz when we are on the right path in the electronic maze. With our backs straight we all walk very slowly, turning around to find that connection again once we lose it. For a moment it is refreshing to just follow instruction: step, feel the charge, turn. ‘Art about the unseen’ asks a lot from its audience, it takes a lot out of you by leaving you no choice but to engage. The Hayward Gallery has created an extensive exploration of a fascinating subject: art which exists almost solely in our minds, and how this can be shared with others. This is not a visual experience, but one that is highly interactive, creating a strong connection between the audience and the individual artist. It is engaging and it is personal, and most of all, it is such a buzz.

Megabuyte, July 2012. Original article here (£).

Letter from the West Coast
The view to Britain
While the Silicon Valley startup ecosystem is the biggest in the world, this does not mean it is the only place capable of growing good technology companies. The West Coast scene is 4.5 times bigger than London, according to research from Startup Genome, but the UK capital is still the third biggest technology hub in the world, just behind New York and ahead of Toronto and Tel Aviv. But how is Britain’s technology scene viewed from the West Coast?

While the gap between the Valley and London is closing, the sheer size of the former is a factor that smaller startup cities really struggle to compete with. The vast amount of talent, history and knowledge present in the area attracts more of the same, perpetuating the trend. This also translates into better access to funding and nurturing for new companies; Startup Genome found that Silicon Valley has 54% more companies reaching a stage of aggressive growth than London; furthermore, Valley companies raise on average 2x or 3x times more money in their first three stages of development.

The ‘cool’ factor
These are all practical elements, but for a UK technology journalist visiting the Bay Area, one of the main elements that sets the West Coast apart in a distinct way is a “can do” attitude – there is a pushiness about it that is just not very British!

“There is such an enthusiasm out here for what we do,” says Suranga Chandratillake, the founder of video search group Blinkx, who has recently been promoted from CEO to president and Chief Strategy Officer. Blinkx started out in Cambridge, but Chandratillake was already in San Francisco from the beginning and now the operations are split between the UK and US. “Technology and engineering, and the sciences in general, is looked down on a bit in the UK, as if it is something very difficult that you only do if you are a boffin with no friends,” says Chandratillake, when asked about the attitude to technology in the UK. He explains how his peers at Cambridge University would view tech chatter as a bit un-cool: “But out here [in San Francisco] it is very cool to talk about technology. And those who are really good at it are treated a bit like rock stars.”

Still, the UK connection has been good for Aim-listed Blinkx. Cambridge’s contribution to the world of technology is not to be dismissed, as the town has nurtured some of the greats such as ARM Holdings and Autonomy. More recently, the town has provided plenty of raw materials for Blinkx in the form of people: “It is much easier to find and retain talent in Cambridge, whereas in the Valley, talent is constantly flowing. Where Cambridge came up short for us was on the business and marketing side. Your partners are here [on the West Coast]. The startup press is here. The venture capitalists are all here. […] From a technology point of view you can start businesses in lots of different places, but the connections you get out here are unique.”

For similar reasons, Blinkx often brings members from its Cambridge development team over to San Francisco for a month at a time, so they can tap into this buzz. “It is a particular Californian optimism, what you get out here,” says Chandratillake when asked whether the West Coast cheer is just a reflection of Americans’ generally more optimistic, less self-deprecating outlook. But no, says Chandratillake, in New York you will find a similar scepticism as you do in London. The Startup Genome data supports this assessment: Silicon Valley has 30% more founders wanting to change the world than London or New York, where founders are more focused on financial rewards. This translates into vastly different attitudes to risk and failure.

West goes East
How to export the Silicon Valley attitude once the company expands abroad is now a challenge faced by Yammer, he enterprise social network company focusing on its push into London. Lately, news around Yammer has circled mainly on the Microsoft acquisitions, however the company is hiring at its London offices. And Yammer co-founder and CTO Adam Pisoni thinks it is possible to export the vibe that makes the Valley such an efficient incubator.

“You can export this in as far as our company embodies these principles. We believe we can set up offices that will also embody these principles, so hopefully if enough companies like us do that in a place like London, you get a critical mass that has a life of its own,” says Pisoni. Still, the process is not without challenges: “When we interview engineers from Europe, the way we work and how we think is super foreign to them. They have never been in an environment where they have had this much autonomy to do their jobs.” Pisoni explains how Yammer’s engineers are not just handed a task, but they are expected to play an active role in determining the direction of the product. Providing staff with equity in the company is one way which Yammer keeps everyone’s interests aligned: “There is a different mentality [in Europe], there is more of a hierarchy. Or course we have that here too, but Silicon Valley is the centre of an attitude where you hire smart people and you throw away their job descriptions. Their job description is to use their talents as best they can to further the mission of the company.“

Pisoni says he is excited about the opportunities in the UK, even if it may be a more cautious business environment. “The best way to articulate that pain point is how companies used to value predictability above everything else. And predictability is the thing you have to trade if you want to become more innovative and and adaptable. Companies are now making that transition without knowing it, because they are expressing a wish to become more innovative and adaptable but they do not want to give up predictability. Those are incompatible.”

World-class technology
While London may currently be at the centre of attention for technology expansion, Bill Burns, the American CEO of UK-listed technology testing group Spirent, is quick to point out that the more established technology hubs are probably outside the capital: in places like Slough and Reading, plus CSR and Imagination Technologies in Cambridge and Hertfordshire respectively.

“It is hard to compare London and Silicon Valley, as they are so different. Everyone wants to be Silicon Valley: there was talk of Russia building a Silicon Valley lookalike, and Michigan wanted to start one up and advertised a job fair appealing to laid-off Yahoo-engineers,” says Burns in Sunnyvale. “There is a lot of initiative around trying to encourage more patents and intellectual property in the UK, but it is hard for anybody to rival Silicon Valley, simply because it is here already. […] It is hard for anyone to form that same dynamic anywhere in the world. But that does not mean that the city, the people or the service providers are any further or less advanced.”

After all, the UK competes just fine with the US when it comes to appetite for actually using technology, both in terms of business customers like BT, Vodafone and RBS, and in regular consumers’ hunger for new gadgets and intelligent software. And there are plenty of examples where London is ahead of San Francisco, which lags a decade behind London by implementing electronic public transport tickets only this year.

“Look at the London Congestion Charge. No-one called it that then, but what they were trying to drive was a smart city: ‘How do I control congestion in a downtown area by using technology to read licence plates?’ Ten years ago that was pretty advanced. Lots of cities are now trying to control and limit traffic on highways by charging. These are simple things we all overlook,” says Burns. Another example is CCTV, where London is the world’s most advanced city.

So while London, and the UK in general, is a different environment to Silicon Valley for operating a technology company, this does not necessarily mean it is inferior. While this is the last of the Letters from the West Coast, we are keen to further explore the UK startup scene; we are planning a spin around the Silicon Roundabout startup circuit to further explore how the UK is developing as a startup incubator. We will come back with ‘The Early View’ in the autumn.

Megabuyte, July 2012. Original article here (£).

Letter from the West Coast
The dark art of content monetisation

As the internet is becoming the primary portal for the delivery of the written word, this structural shift is rendering old revenue models in need of some significant new thinking. Newspapers have long accepted the inevitability of the change, with magazine- and book publishers following a bit further behind, as everyone knows the internet is the future; it means immediate delivery, low production costs and a world of multi-media opportunities to boot. But what about the money? Advertising, subscription and freemium are all possible solutions, and publishers cannot be accused of lack of trying. But the ideal method for monetisation of content, now that it is online, remains at large.

New alternatives to advertising
“The traditional way this has been done is mostly display ads, more so than subscription fees. But as every percentage of the page that you devote to advertising is one not being devoted to content, I think we have definitely started to hit diminishing returns,” said Oliver Roup, CEO and founder of VigLink, the San Francisco start-up aiming to provide a solution to the trouble with monetisation. One problem is that readers lose interest if there are too many ads, said Roup when I met him in his office, but Google is also increasingly penalising websites that overload on ads. As websites are becoming easier and easier to set up, online real estate is just not worth what it once was; generally speaking, web outlets are finding it harder to survive just on advertising alone.

This is where VigLink comes in, as an additional means of generating revenues through affiliate links. Back before the company was founded (in 2009), Roup was at Microsoft, where he learned about the Amazon Associates Programme: if a website is a member of this scheme, anyone who follows a link away from the site and onto Amazon will yield a commission for the site of the original link. Curious to see how many people were actually using the affiliates programme, Roup wrote a web crawler and discovered it was less than half: “People were linking to Amazon, but they were just not getting paid. They were not doing that little bit extra you need to do to get paid. So I thought, I am going to start a company that does that for you. And now we do that not just for Amazon links, but for many tens of thousands of other merchants too.”

Asked how much money a website can generate from affiliate marketing, Roup said this depends on numerous factors: who you are, who your audience is, what you are talking about, how much traffic you get. “We find our customers often earn in the range of what Google AdSense earns them. The good news is that it is completely incremental. The question is not, should I run ads or should I run VigLink. It is yes to both.”

Full disclosure
Pinterest, the social network based on curating images, drew headlines earlier this year when it emerged the group was monetising users’ content by inserting affiliate links. This was through a partnership with market leader Skimlinks, a four-year old startup running out of London. Pinterest ended up terminating its relationship with Skimlinks following criticism it had been concealing the arrangement. Still, the Skimlinks has continued to grow, having raised $4.5m last autumn which brings the total funding to $7.5m. CEO and co-founder Alicia Navarro responded to the Pinterest controversy by writing a blog post with a headline that sums it up nicely: “It’s not a secret. We do monetise social discovery, and it’s great.”

Bringing this up with Roup, he is quick to emphasise that sites using affiliate links need to be upfront about this fact. “I think users get upset when they do not know, so we say to the publishers: tell your users.” While there will be those who have issues with affiliate links, just as they may take issue with advertising, providing this information in advance will go a long way to prevent any problems. “We also offer an opt-out that mean no one will make money from their clicks, but the number of people who do that is vanishingly small. Still, it does defuse the issue.”

Boosting the hyperlink
Specifically, VigLink’s product works by trawling through content and changing links into affiliate links. Visually, nothing changes on the site, but any clicks through to the merchant will generate money back to the site. VigLink then gets a cut of this commission. Roup gave a nod to Skimlinks as the main competitor, but the industry is only a couple of years old and in constant development: “We think 2012 is the year the hyperlink gets smart. so, Now, when you pull up a web page, you see display ads that are decided on a very complex algorithm. But the hyperlinks you see are completely static. […] We believe the hyperlinks – which ones you see and where they point – should be decided as the page comes up just like display ads: depending on who you are and what is going on in the world. Our vision is to make the web better by making every link intelligent and valuable.”

Roup currently has 22 people working in his company, after first securing funding in June 2009. Last year the group did a Series B round, raising $5.4m from Emergence Capital, Google Ventures and First Round Capital, taking the total raised to $7.3m. Roup told me had 96 meetings before seducing the seed money for the company, which is a lot – but then considering what year it was, and the fact that Roup was, as he puts it, “just me and a Powerpoint deck; no team or customers or website,” it starts to look quite impressive. Roup’s team is working on the sales expansion now, but ultimately what the entrepreneur wants to do is to take the hyperlink to the next level. Links technology that has been almost static since the start of the web, but as anyone knows if they read newspapers online, they can add significant value to the user experience; “So making every link on the web intelligent and valuable is what we are about.”

Advertisers: look sharp
Affiliate links look poised to become a straightforward tack-on to advertising for monetising online content, especially for materials unlikely to attract subscription fees. While the likes of VigLink can grab a slice of the market by helping to shape this area as it develops, the move to online has placed significant demands for revival for the advertising industry. As people become more discerning, ads have to become smarter to earn our attention.

Online advertisement is moving from static ads towards more moving content, meaning the focus is less on how many clicks generated but on getting people to actually watch the ads, explained Suranga Chandratillake, CEO of Blinkx. A key selling point for Blinkx is the ability to recognise meaning from audio and video, enabling only relevant advertising to be placed alongside. A similar change is happening at YouTube: five seconds in, you often get the option to skip the ad. This means the ad has to be good enough for the viewer to actually not mind watching it, or no one gets paid. This further personalises the experience for the viewer, and it raises the game for the advertiser to come up with something good, and ultimately, effective.

But throw the mobile internet into the mix and the issue of monetisation becomes a lot more challenging. Static ads do not work as well on the tiny screen, and people accessing data on the go will have less patience for video ads. “The mobile world is fascinating,” said Chandratillake. “There is a usage revolution happening, not just with apps but also with accessing web services through the mobile phone. The size is a disadvantage, but the advantage is that the platform knows who or where you are.”

Copying the web content monetisation models is not working on mobile, asserted Chandratillake, pointing out that even relatively new companies such as Facebook are running into problems as their mobile interface does not support ads in the same way. 69% of UK Facebook users have a smartphone, a statistic that rises to 82% for Twitter users, according to a recent Ipsos Mori poll. So how can companies monetise their content when users increasingly access it through mobile devices?

The mobile experiment
“The truth is that no one really knows how to make money from this. It is causing big problems for big as well as small companies,” said Chandratillake. “At Blinkx we are actively working on capitalising this opportunity though. We are building mobile applications, we are partnering with mobile companies, and 10% of our audience comes through mobile devices. But ultimately, everyone is in the same position. We are all experimenting.”

So far, these experiments include making mini-ads that fit smaller screens, as well as more interactive ads, but as demonstrated by the rise of affiliate links we are likely to be looking at hybrid solutions. One example is how earlier this month O2-owner Telefonica announced agreements with Facebook, Google and Microsoft that will let users pay for digital goods and services via their mobile phone bills, in an effort to drive downloads of paid content.

While the move towards mobile is a major structural shift that is likely to have casualties, Chandratillake believes there are numerous elements from the web that will transfer well to mobile. Brands with strong customer relationships is one of them, and Yelp, the restaurant reviews site, is a company that has done a good job on this: “They realised mobile was perfect for them, and they used their existing relationships with users and partners to build an app and got it out there very quickly.”

Yelp, a Silicon Valley success story which floated late last year, boasts 71.4m users per month and makes its money from selling advertising packages and banner ads to businesses. Currently valued at $1.6bn, the company has however been running at a loss for the past eight years, and critics are wondering whether this will ever change. Yelp, however, as well as everyone else, will undoubtedly have their best heads working on it, as online content delivery, and now mobile delivery, is the undeniable trend. But when it comes to making proper money from it, even the industry leaders are admitting it is still a hit and miss game.

Megabuyte, July 2012. Original article here (£).

Letter from the West Coast
The mobile internet takes shape
HotelTonight is a mobile business with its eye on a future. Specifically, the future where we will all have fast internet available on clever gadgets in our pockets. HotelTonight, which is just this summer launching in London, provides an app where users can book same-day discounted hotel rooms using their iPhone, iPad or Android device. It is a great example of a service that is made specifically to take advantage of the main benefit of the mobile device: solving a problem at the last minute, while on the go.

Keen to try the service ahead of my meeting with CEO and co-founder Sam Shank in San Francisco, I found myself in something of a “the cobbler’s children have no shoes” moment; this technology journalist’s phone is too old for apps, and HotelTonight’s services cannot be used on a regular computer. Shank takes this in good spirits, pulls up the app on his iPhone and hands it to me. It turns out there is no need to spend time familiarising yourself with this app, because the interface is so sleek and the options so self-explanatory that you would be hard pressed to struggle. The app is designed to enable users to move quickly through the options, with minimum fuss on the small screen.

But, I ask as we sit down to talk, would it really detract from the mobile app to just have a basic website that people can access from their computers? This was what I tried to do in a cafe earlier that day, using my very mobile laptop. “There is a reason why we have stayed mobile-only,” says Shank. “As a start-up you have to focus to be the best at something. And the bottom line is that online travel is growing at single digits a year, whereas mobile bookings are growing at 100% per year. So if you had to choose which one to be in, it is very obvious where to go.”

A mobile focus
Shank believes a web portal would distract the team, now at 45 people and counting, as they would have to support another platform: “Our message is very clean, it is mobile-only and that is why the deals are great. You are getting people when they are already out. It is a better message on the brand, and it is a better message for the hotels. It has been working really well.”

In addition to streamlining the focus, the mobile-only focus also has other benefits: “Being entirely based around mobile means we have a different way of thinking. The approach to the market is different, the marketing channels are very different,” says Shank, adding that the customer service also sits within the app. “If we were trying to do a website, we would be doing things very differently in terms of all the other aspects of the company as well. We want to be really good at mobile because that is where the future is.”

It is hard to argue with this argument, as Shank is betting on a future trend – the spread of the mobile internet – that looks pretty certain. Financially the company is no slouch either, having just secured $23m in a fundraising round led by US Venture Partners, which includes participation from Accel Partners, Battery Ventures and First Round Capital. The group has now raised a total of $35.8m since its establishment in December 2010. Shank, who was also the founder of DealBase.com, a travel deals search engine, has a lot of travel sector expertise with him; his co-founders are COO Jared Simon, previously online-video production and distribution outfit TurnHere, and CTO Chris Bailey, formerly of DealBase.com and Adobe Systems.

Shank, Simon and Bailey are up against some big names in the travel industry though, including Expedia, Priceline, TripAdvisor and Orbitz. The CEO says he actually waited a few months after having the idea for his business before going ahead, because he thought, surely something similar must already be in the works. It is such a simple, obvious product idea. “But then I realised: no one [else] is going to do this. And if no one else is going to do it, I want to be the company that does it.”

Poised for expansion
HotelTonight takes a 20% cut of each transaction, an amount Shank says is standard in the industry. With over 2.3m customer downloads under its belt, the group is now pushing hard to include more cities, both in the US and internationally, a process that is labour-intensive. HotelTonight has great traction, says Shank, but admits there is some work involved in explaining the benefit of this new business model to hotels: “The message we have for hotels is very friendly and very complementary to what they already do. We say: ‘Only use HotelTonight if you have rooms available on that same day that you know you are not going to sell otherwise. Give them to us and provide a discount to consumers, and we will help you fill those rooms.’ It is a very different message to what is being sent by the bigger online travel agencies that are competing with the hotels for advance purchase bookings.”

HotelTonight customers can book up to five nights, but the first night must be the same day. The app only shows three of hotels at any one time, meaning there is a level of unpredictability. Half the users are business people, explains Shank, using the app on last-minute trips or maybe after a delayed flight; “The other group of people are what we call ‘impulse bookers’. These are people that would otherwise not stay in a hotel at all. […] For the hotel industry [this means] it is not cannibalising, but it is growing the entire audience.” Another advantage for HotelTonight over the competition, according to Shank, is having the best booking process, the best merchandising, the best bargains and the ability to deliver the best quality guests to the hotels.

Bigger, better, faster
Unlike in the UK, 4G mobile internet rollout is well underway in the US. Spirent CEO Bill Burns, whose company is a leader in testing the newest networks and gadgets for manufacturers, says the coverage is still patchy even in big US cities, but AT&T and Verizon are working on it consistently. What this means for people is that soon the internet in our pockets will be as good as broadband at home.

“There is a significant difference in speed from 3G to 4G, maybe around four times faster. This all depends on coverage though: what aerial you have, what is your connectivity, how close you are to cell towers,” says Burns, adding that 4G phones will fall back on 3G when the former is not available. “4G will roll out over the next 10 years. But there will be many years where we will also continue to go to faster data rates for 3G. There is lots of hype around 4G and LTE (long-term evolution), which is just in its infancy.”

Today, most people would be thrilled to get a broadband-level internet service on their mobile phones, and it seems a bit greedy to ask for more. But we will – increasingly better gadgets, expanding social networks, online phone calls and better video streaming services mean that soon we will ‘need’ faster data, and we will ‘need’ it not only at home but at our fingertips. Verizon and AT&T in the US are the furthest along with 4G, with progress also made by DoCoMo in Japan and providers in the Nordic countries. “In the UK, if one of the operators moves ahead with 4G the others will follow. They need to compete with those faster data rates,” asserts Burns. After all, the technology is already being developed to take things to the next level beyond 4G: LTE Advanced.

“Early adopters will move to LTE Advanced in three years from now, but the ones that are just adopting now will get to LTE Advanced in about 10 years. […] The capacity to push data from the devices, out to the wireless network, to the core network and back to the data centres are all evolving at the same time, and that is the opportunity for anyone inside technology and IT,” says Burns, adding that the reason this is so exciting now is that the demand is already there: “If you look back to the year 2000, you saw a lot of networks being built without a lot of users demanding that bandwidth. Today the demand is really coming from people who want to use these devices like you and me, and they are demanding all of this, and truly pushing the use and demand from everything from social networking to video.”

Right here, right now
HotelTonight is sitting pretty in the middle of a big trend, with founders wasting no time trying to pander to more dated models with lesser growth. Starting out as a purely mobile company means the likes of HotelTonight can create a product that is ideally fitted to mobile. This goes beyond designing the product to fit on the small screen, to truly taking into account the unique needs of a user who will be in different situations than those using a desktop computer: in the street, in a rush, maybe on a slow connection, and in need of something specific to their exact location.

HotelTonight covers all these bases, but there are lots of others who have done well: the Uber app offers on-demand car service to US customers; Hailo is a UK black cab app launched by three cabbies and three tech entrepreneurs; Trover is an app similar to Instagram, but the photos are organised according to geographic locations. “Beyond that, there is a lot of personal expression apps and companies, whether that is finding people that are close to you, or photo-sharing or local discovery,” says Shank. “This is a very natural fit for mobile: ‘I am out, I need to get around.’”

Megabuyte, July 2012. Original article here (£).

Letter from the West Coast
The social revolution

“Yammer is going to be huge,” I remember thinking as I walked down the street after meeting with co-founder Adam Pisoni in San Francisco, feeling buzzed up and inspired about how technology is changing the way we live and work. Yammer may be an enterprise social network group, but what CTO Pisoni and CEO David Sacks are trying to do is to change the way companies collaborate and innovate.

It was only a few weeks later it became clear that the mighty Microsoft had reached a similar conclusion, putting down $1.2bn to secure Yammer. Microsoft CEO Steve Ballmer pledged to let Yammer continue to develop standalone services and “maintain its commitment to simplicity, innovation and cross-platform experiences”, before talk turned to “complementary offerings” and integration with Microsoft Office. We can only hope this coupling works out for Yammer, which is only four years old and could potentially benefit from a hand in dealing with its supersonic growth. And as Microsoft’s move into social follows Salesforce’s buying of Buddy Media, and Oracle’s buying of Virtue and Collective Intellect, let there be no doubt: social business tools will be part of our future, and it will happen soon.

The cross-platform hub
The day I met with Adam Pisoni, however, there was not so much as a whisper around to reveal what was in the works. If Pisoni knew, he certainly gave nothing away. Yammer has been doing pretty well on its own though: over 5m corporate users on a freemium model, including employees at 85% of the Fortune 500, of which 20% are paying customers. This percentage is double that of the industry average, as estimated by Constellation Research. Yammer’s revenues have not been disclosed, but speculation puts it between $22-30m. So how did Yammer manage to get so far so quickly?

“The market is so large and growing so fast. We are partially a catalyst for the growth of this market, but it is growing despite us,” says Pisoni, pointing out that more than half of Yammer’s traffic is now in Europe even though the company is not really present there yet. A big push is now underway in London, which Pisoni expects to be huge this year. But still, Yammer must have something going for itself; it is not like customers are lacking in options, especially with Salesforce’s Chatter benefiting from the name-recognition factor. On this note, Pisoni argues that Chatter is a good activity stream sitting on top of Salesforce’s other functions, but it is not really an enterprise social network because it does not let people collaborate in the same way as Yammer does: “Chatter is not meant to be your aggregated activity stream across all your applications. … Our goal is to be the enterprise social network, to be the hub of where people come to get work done, communicate and collaborate.”

Innovation at the edges
As 13-year-old Salesforce is getting on a bit in technology years, this brings about the questions about innovation and cannibalisation of the old models. This, however, is where Yammer starts to look different, as part of its business model is to avoid exactly this pattern: “What is becoming more important is how quickly you can innovate, not how quickly you can preserve value. Companies are not going to be defined as much by a product or service, you are going to be defined by your velocity and your ability to adapt.”

Most technology companies will say this, but for Yammer this shift is not only their philosophy: it is also their business plan. While Yammer is still small, Pisoni explains how customers are changing from an attitude of centralised innovation, where ideas are generated at the top and spread outward, to a system of innovation at the edges: “As older companies think about how to become more innovative they are doing it in an old way: ‘We need to figure out the next innovation.’ But there is no next innovation! It is about constant innovation, and organising around letting everyone innovate.”

Yammer’s software is designed to enable this new culture of creation to unfold on a practical level. The key elements to empower employees and decentralise execution, says Pisoni, as well as to operate on a transparent model where everyone can see what others are doing and build on it. This lets people connect and organise themselves in the optimal way, pushing past the boundaries of communication and job descriptions. “Yammer is all about self-organisation and empowerment but also transparency and trust, and you need both of those things to be successful,” says Pisoni. Better informed employees make better decisions, and in turn make the company more adaptable and innovative.

Creating the roadmap
As a former office worker, this sounds downright wonderful. But, I put to Pisoni, middle management is going to hate this. This is such a significant shift in thinking that it that may even require a generation shift to come to fruition.

“People ask us, who is your target customer? But is not a geography, it is not an industry, it is not a size. It is companies that recognise that they have to make this shift. [Our demographics are] an even slice across industry, geography, and size, but the consistency is that they are using Yammer to transform into a new kind of company.” While some people get it right away, Pisoni acknowledges that the novel nature of Yammer’s offerings mean lots of conversations with customers to help them see how they can take these ideas and use them in a practical way in their companies. “There are not really any good roadmaps. Plus to become a transparent company is difficult and there is friction involved,” says Pisoni. Explaining how this can be done, and why it is beneficial, is a big part of Yammer’s challenge.

‘Facebook for business’ tends to be the shortest way to explain what it is Yammer does, and it has played a significant part in helping people understand the basics of Yammer’s operations. But considering Pisoni’s face when I bring this up, these reference points are starting to feel limiting.

“The comparison was somewhat useful in the beginning, but yes, now we find a little bit annoying.” Pisoni laughs. “Really early on, we started Yammer because we recognised where this new form of [self-organising meta-to-meta] communication was going. It was revolutionising how we communicate in our personal lives [through social media], and this was likely to go to enterprise,” says Pisoni, emphasising that Yammer was the first to come out and state their intention to become a social enterprise. The manifestation of this, however, looks very different from Facebook. In the business context, the focus is on people self-organising into groups, getting work done as teams, and integrating with applications and business processes.

Yammer’s interface also distinguishes between content generated by people and applications, a factor which Pisoni highlights as an advantage over Chatter and Tibbr: “You do not want the human generated content be pushed down [the information stream] by a mass volume of computer generated content such as printers out of ink. Over time we will let people interact with [computer-generated] stories: they can comment on them, or ‘like’ them, and that will move them over into the human-generated content feed as it has been signalled that people care about it.” What Yammer is doing now is developing its cross-application workflow systems, meaning data will flow together whether it is from SharePoint, Salesforce, NetSuite or elsewhere. As data volumes grow, the human interaction with the content will be crucial to determine its importance, hence helping the system keep noise at a manageable level for the individual users.

A softer world
Business evolution is no longer a seminar that is held once a year: it is becoming a way of life. Pisoni is proud that Yammer practices what it preaches: a decentralised organisation where innovation happens at the edges. Staff who feel empowered make for better workers, and the role of management is shifted from telling everyone what to do, to organising people so they can interact and create in an efficient manner.

This approach is different from what came before and can feel a bit fuzzy and difficult to quantify, but this is what happens in a social space. What Facebook, Twitter, Tumblr and all the other social networks have done is to take something people do naturally offline and move it online, and the likes of Yammer are picking up the elements that can improve business relationships. A new entrant on on the social technology scene is Pinterest, which was founded three years ago in Palo Alto by Ben Silberman and Evan Sharp. Now with over 10m users, Pinterest lets users create ‘pinboards’ of images and share them, like themed scrapbooks: “The things you collect says so much about who you are and what you are interest in. That is what I wanted to capture with Pinterest,” said CEO Ben Silberman at March’s SXSW gathering in Texas. “I cannot say the idea came from hard-nosed business analysis. It was just something I really wanted to see built,” said Silberman, who admits the company is still experimenting with revenue models. So far affiliate links seems to be the main method.

Pinterest’s product-before-money attitude is mirrored by Facebook’s Mark Zuckerberg, who declared in his IPO letter an intent to make money to create better services and not the other way around. There are two reasons this is not as crazy as it may seem, starting with the fact that social tools are based on people choosing to spend significant amounts of time on these sites; in order for this to happen, people need to feel they are having a genuine experience with other people, with the selling kept in the background. Then there is the fact that our expectations have never been higher: “People can use Facebook which is the pinnacle of social design. They can use Apple which is the height of interactive design. They can use Google products which are beacons of efficiency,” said Silberman. “If you do not give people something that is worth their time, they should not give you their time.”

The differentiation is often a sleek interface and beautiful design, as efficiency is no longer enough and we need a little something extra to be charmed. Pisoni talks about the joy of creating a product that makes people’s workday better; Silberman kept saying how satisfying it is to create a beautiful site where people can share things that make them happy; Zuckerberg wants to change the world, plain and simple. The new social layer means technology is no longer just about creating something that works and making some cash, but to make things better, more beautiful, more meaningful. Now that the human element has been mixed into technology there is no turning back.

Megabuyte, June 2012. Original article here (£).

Letter from the West Coast
The innovation cycle: The agony and the ecstasy

Instagram, the popular photo-sharing app, drew a $1bn price tag when Facebook came knocking back in April. It is a massive leap of faith to pay this much for a company lacking that pesky thing that is a revenue model, but equally, it is a powerful signal as to the importance of photos in the new social internet future. So then why is it that just four months earlier, the inventor of the hand-held camera filed for bankruptcy? It is not like people had lost interest in photography, the lifeblood of Kodak, in fact quite the opposite.

When it folded, Kodak was worth almost exactly as much in cash as Instagram was worth in dreams. Instagram was funded on just $500,000 back in October 2010, with a second round in February 2011 bringing onboard $7m from big-name investors. Of course we have the benefit of hindsight, but it would have been so easy for Kodak to make its own Instagram. So why did they not?

Small ideas in big companies
To be fair, Kodak had not exactly been sitting on its hands in the run-up to the bankruptcy; the 133-year-old company actually now draws 75% of its income from digital businesses. While change is constant, the current technological leap is bigger than usual: the coming of age of the internet means photography becomes digital, newspapers go online, music is available for immediate download, and books are read on e-paper. While Kodak had the money to try new things, it would seem that it did not quite have the courage to shake things up to the extent that was really necessary to survive.

Before Oliver Roup founded VigLink, the web-content monetisation software group in 2009, he was in charge of products for Microsoft’s media outfits such as XBox Live Video Marketplace and MSN Entertainment. At the time of our meeting in San Francisco, Roup’s idea had grown into a 22-people-strong operation. So why did he leave Microsoft to do this?

“The main reason I left was to get more autonomy. I wanted to build something of my own,” said Roup. When looking ahead at the kinds of projects he would be working with at a big company like Microsoft, he found they paled in comparison with the excitement of entrepreneurship. But from the point of view of his former employer, why were they not bending over backwards to give industrious employees a chance to develop new ideas in-house?

“The thing is that their interests and goals are different. I think a company like Microsoft, if they could create a business worth a $100m a year, that is not even worth it to them. The intellectual overhead of even thinking about it …” Roup shrugged, but quickly added that this is not a reflection of incompetence nor malevolence on part of a big organisation: “Priorities shift when you are already making $60bn in revenues. In order to move the needle and impress your investors you have to make strides that are material to that number, and that’s a very hard thing to do.” In other words: they are looking for guarantees, and with start-up adventures there is no such thing.

The acquisition challenge
76 year old Spirent, the technology testing group operating out of Silicon Valley, only needs to point to its age to demonstrate its skills as an innovator. Successful acquisitions have played an important part for the Crawley-born company: the 2002 acquisition of Caw Networks, which makes network performance testing appliances, gave the group a foothold in a growing niche, while the same is hoped to be the case for Mu Dynamics, a cloud- and app-testing specialist brought onboard earlier this year.

“But acquisitions are always challenging. You have a different culture and you have a product that is fairly typically early in its life cycle. You have to nurture the relationship, the culture and the product area, and they are not always successful,” CEO Bill Burns said as we met in his Sunnydale office. The challenge of being able to predict which trend will spark and catch fire is immense, and even if you get the trend right, the technology may be wrong.

Take Cisco’s acquisition of Flip, the little pocket camera, which came at a time when personal videos and YouTube were booming. Cisco was right about the trend, but it was the smartphone that would become people’s recording device of choice. Burns added: “You wonder if a Kodak could have done something around enhancing photo activity. Could they have sold the intellectual property around cameras in smartphones? Could they have turned themselves into a web service around photo processing?” Not knowing exactly which trend was going to be the winner, Kodak hesitated too long and ended up missing the boat.

Now Research In Motion seems to be where Kodak was a few years ago, instilling fear in the hearts of those of us still dedicated to the BlackBerry. “There are some things they excel in, such as battery life,” said Burns. “I think it is about the refinement of the product over time. They probably got too wedded to their keyboard.” RIM probably had numerous user surveys telling them never to do away with that keyboard, but then Apple, a beacon of innovation, came along with their touchpad, and lo and behold. As Steve Jobs once said: “People do not know what they want until you show it to them.”

The cannibalisation dilemma
Eric Kessler, co-president of cable TV channel HBO caused a stir last month when he said he thinks the move away from traditional TV to an internet-based model is just a “temporary phenomenon”. Consider then the fact the HBO series “Game of Thrones” is rapidly becoming the most pirated TV show of all times, with over 25 million downloads this spring as HBO refuses to let people pay for new episodes on Netflix, Hulu or iTunes.

VigLink’s Roup pointed out how the issue is difficult for HBO because the group gets most of their money from the network operators, and an online service would cannibalise this. Kessler is taking the conservative stance and sticking with what he knows, which makes sense. Added Roup: “If [at HBO] you throw out the Comcast business to go after that web business, maybe ten years from now someone else will be glad you did. But you will be out of a job, and that is what makes it hard.”

The fact that it is difficult for established companies to take chances is also part of what creates opportunities for start-ups. For young software companies, providing a pure Cloud offering from day one means they come across as modern and nimble, unencumbered by transitional issues. These remain a source of unending distractions for the incumbents as they try to keep everyone – new and old customers, as well as investors – happy, while they try and keep up with neverending change. But as a company grows and the management becomes invested in the status quo, is it possible to maintain that start-up spirit?

Staying ahead
“The start-up spirit was essential to us when we were tiny, we would not have survived without it. But it is hard to keep working at the pace and intensity of a start-up forever,” said Suranga Chandratillake, CEO of video search software outfit Blinkx. For large companies it is possible to throw money at the problem and buy what looks good from the upstart pool, and then strive to find the right balance between nurturing the growing company and leaving the entrepreneurs at the helm alone as much as possible lest they feel stifled and leave.

As Microsoft is looking to pay as much as $1bn for Yammer, it is hard not to be fearful: what if the tech giant starts stomping around at Yammer, imposing rules and processes and demanding ties instead of jeans. After meeting Adam Pisoni, co-founder and CTO at Yammer, it is hard to picture him being happy as a cog in the Microsoft machine.

“The thing that excites me [about running a start-up] first of all is the idea that we can build products that people want to use. I recognise that that is a bit vain, even,” said Pisoni. “The other part is feeling like you can build a better company. That you cannot only build a better product, but you can build a company that is sustainable, that is a better company than those who have done it before.” Before establishing Yammer just four years ago, Pisoni was software architect at Geni; he was instrumental in the systems architecture at Shopzilla; he co-founded web development consultancy, Cnation, which serviced big names such as CBS, Fox, Nissan and Honda.

And while the point about the jeans may sound superficial, Chandratillake argues that it is not: “It may sound silly, but things like this makes a big difference to the atmosphere at a small company.” This is also why Blinkx, whose market value has reached £150m, will regularly put engineers in start-up mode when working on new projects. “We pull people together from different teams, put them in a room together and give them crazy deadlines,” says Chandratillake. “Many of our employees find it empowering to work like that every now and again. It gives them a sense of ownership over the product. Keeping the start-up spirit alive is an important tool for staying ahead.”

Lionheart Magazine, Warmth issue, 2012. Original article.

A certain process
Beauty isn’t really a part of the equation for product designer Bernadette Deddens, but somehow it happens anyway.

“I don’t care about pretty things,” says Bernadette Deddens, as I’ve just asked her about the clean look of her work. Her considered and specific processes create something elegant and beautiful, but what it is not, and do take this in the best way possible, is pretty.

The product designer is fresh-faced and cheerful in spite of the freeze gripping London the day we meet. Fellow café patrons are huddled over hot tea, but Bernadette seems unfazed by the sub-zero temperature; her means of transport is a bicycle, imported from her native Holland.

“The beauty lies in the practicality, in the usability,” she explains, taking off her self-made leather bangle. “People say they like this, so it must be pretty. But for me, it’s a 1.2 metre long piece of leather. I considered the thickness of the leather, how to roll it up … that’s where the beauty is for me. It’s almost mathematical. It’s a simple object.”

I’d hoped to meet Bernadette in her studio, which I’ve been told is cold and cramped and speaks volumes of how one suffers for art, but alas. Bernadette, who makes up half of Study O Portable alongside husband Tetsuo Mukai, is in the process of moving to a bigger space: “At the moment we have small versions of the tools we need. A small belt sander, small drills, a puzzle saw instead of a big saw.” This is dirty work; the result may be elegant, but the process is anything but.

Of course, Bernadette realises customers may be less concerned with the method. This will sometimes result in requests for matching pieces, such as earrings, but this is problematic: “This process doesn’t apply to earrings,” asserts Bernadette, explaining that the hollowness of the bangle can’t be replicated for earrings: “The process was developed for bangles, and I like to be specific.” She runs her fingers around the inside of the bracelet, her voice soft again now, self-conscious after having spoken so adamantly. But she is certain in her intentions, meaning the product catalogue will never feature earrings alongside the bangles. But would she do it on commission? She shrugs a yes, probably. This is where artistic ideas meet the reality of rent.

On that note, Bernadette works part time in a gallery and as a university art tutor. “Tetsuo and I have always had other jobs to fund our work. The other jobs pay for the job I love. I never envisioned it any differently, but it’s starting to pay off now, seven years later.” While she loves teaching, Bernadette is quick to point out that not everyone is suited to become artists: “You have to have a vision of what you want to do.” I ask her if she has a vision, and she makes a face. And then: “Yes, I am capable!” She bursts out laughing, shy again for speaking boldly, but I think she knows this is the truth. Bernadette’s teachers tried to talk her out of going to art school, and she is not entirely against this advice: “You have to be extremely driven. You have to subject yourself to vigorous experiments.”

Bernadette and Tetsuo’s dedication to experimentation runs through everything they create. Take the newest works, a series of quartz crystal mirrors. Crystals are integral to transferring energy in technological devices, and the mirrors are a play on the idea that we see ourselves through the objects we create. “We didn’t know anything about crystal when we started. But if you want to know, you find out.”

Peering over the photos of the mirrors, I cannot but point out how neat they would be as pendant. Bernadette’s eyes widen: “The mirrors won’t be pendants!” Their function would be compromised if they were that small, she explains, laughing. What if someone commissions one, I ask, and she nods, well yes, probably: “Is that a cop out?”

I think that’s a reality of London rents, I say as we gather our coats to brave the cold again. Has she considered moving Study O Portable to a less expensive city? “No, I think we need London. It has amazing free lectures, for one, all the galleries, the opportunities to meet people. Elsewhere would be cheaper, but we’d miss out on all this. I think we need this flux.”

For a designer whose work is all about experiments, transferrable ideas and methods, it makes sense to want to be in the middle of the noise and grime of a place like London. For an artist who sees beauty through process and practicality, it must be paradise.

Lionheart Magazine, Warmth issue, 2012. Original article.

The years shall run like rabbits
‘Time flies’ – it’s an old person’s saying and I keep saying it. But instead of getting used to it, this racing of time, it just seems to scurry on more intensely. Time rushes along at an increasing pace, which doesn’t make any sense because there is more, not less, to do. Weekends come along thick and fast and all of a sudden it’s summer again when I could have sworn it was mid-winter only yesterday. When I was a kid, an hour was an age and winter seemed to never end. I walked home from school, one little foot in front of the other in seemingly infinite repetition, but I know now it was no more than fifteen minutes. I think time is supposed to be a constant element, but I’m really not all that convinced.

I keep getting distracted. I pick at the seam of my shirt, turning the hem upward to examine how the hastily assembled item is unravelling as I wear it. I feel my skin tingle and how my cardigan rests on my collarbone, my fingers wander up and slide into my hair. There they have work to keep busy for ages, twirling around the short, soft whisks underneath my ponytail, digging for rough strands near the crown and greedily feeling their coarseness when one is found. I look up and the sun has moved across the sky.

The dizziness of this new freedom is subsiding and I have more good days than bad days now; when it’s one of the latter the thoughts no longer feel like my own but as if there’s an intruder. Pragmatic as I am, I evoke my mother for the task at hand: ‘Don’t be so helpless,’ I hear her say inside my head, not unkindly. I get a broom and sweep the intruder away. I read back those last few sentences and realise how precious and melodramatic it sounds, to say things like that, but it’s the truth and don’t you think I wish it wasn’t. As I figure out what I want I can feel the world opening up but at the same time it’s getting narrower. I haven’t really changed anything but I am becoming determined and with it, ruthless; just a pinch.

And all of a sudden it’s the weekend again and we’re waiting for the green man so we can shuffle on in flimsy sandals, soles tapping against paving stones and there’s that feeling again: I want to be working. I’ve had the moment where I’ve realised that work is no longer something I’m trying to dodge – no more clock-watching for Jessie. There’s just me here, and all the things I’ve always wanted. And I’ve wanted them for a bloody long time too – so long that I was starting to wonder if waiting was all I could do.

Now that my time is my own I feel like it should be slowing down again, back to its leisurely, trusty ticking of the days before double-digit birthdays. ‘The day is long,’ my grandma used to say, as I stood in front of her wall-clock which counted the seconds so loudly they rattled through the whole house. Outside that living room, time runs like rabbits and I know it. So why isn’t all that dead-end inspiration of office afternoons here for me now, waiting like water in the tap? I spent so much time wanting to be ‘big’, for my time to be my own. Now both those wishes have come true, but there are other forces at play. Again I catch myself staring into the middle distance.

In the spring of 2012 I spent a month in San Francisco, speaking to technology entrepreneurs about trends and start-up culture. Letters from the West Coast is the article series I wrote about this for Megabuyte, the specialist technology newswire.

[The Early View is my follow-on series on technology start-up culture in the UK.]

* The magic in the Valley. What is it about Silicon Valley that makes it such a dynamic place to start a business? – read

* The innovation cycle: The agony and the ecstasy. The trouble with innovation and keeping the start-up spirit alive – read

* The social revolution. Interview with Yammer, plus how social tools are changing how businesses collaborate and create – read

* The mobile internet takes shape. Interview with HotelTonight, with notes on internet evolution from Spirent – read

* The dark art of content monetisation. Interview with VigLink, with notes on mobile advertising from Blinkx – read

* The view to Britain: How is Britain’s technology scene viewed from the West Coast? – read

Megabuyte, June 2012. Original article here (£).

Letter from the West Coast
The magic in the Valley

Silicon Valley sounds like it should be an airborne construction of glass and steel, with flying cars whizzing around as entrepreneurs test out their latest inventions. But instead, this capital of innovation is string of small suburban towns: San Jose, Santa Clara, Sunnyvale, Mountain View and Palo Alto, all nestled in the crook of the San Francisco peninsula. So what is it about Silicon Valley that makes it the world’s most dynamic place to be a technology startup company?

During the month I spent in the Bay Area I spoke to several entrepreneurs about what it is about the Valley, and the same thing happened every time: their eyes lit up, and they used the word “buzz”. The best people come here, they said, generating such a volume of ideas at such a rapid pace. Being constantly surrounded by this pushes you, it forces you to up your game.

Something in the water
“You can look at every metric of our company and see that it inflected when we moved here. This includes user growth. I cannot even explain that. There is this energy here,” said Adam Pisoni, CTO and co-founder of Yammer, the enterprise social network. I met Pisoni a few weeks before reports surfaced that Microsoft is prepared to pay over $1 billion for Yammer, which has come a very long way in only four years. The company scores highly on the “cool” factor with its San Francisco office, which is full of people in jeans, roaming dogs and discarded bikes, surrounded by framed praise from Forrester, BizSpark, the New York Times and the Wall Street Journal. Yammer spent its first year in Los Angeles, but access to “the best talent in the world” is first on Pisoni’s list of reasons to be on the West Coast: “Also, when you are here there are so many great companies, the bar you set for yourself is higher. You are comparing yourself to the greatest companies, the fastest moving companies in the world. So you start taking your goalposts and throwing them way out in front of you.”

Mountain View, home to Google and neighbour to Facebook, is just an hour south of San Francisco, courtesy of Caltrain. Walking down the street of this little town that intellectual property built I was surprised to find the innovator spirit is actually present in a very physical sense. On Castro Street, the main thoroughfare, you can hear people in Mozilla Firefox shirts talking shop, while the next killer app is being drafted on a napkin upstairs at Red Rock Cafe. It was here it all started, in 1956, when William Shockley left Bell Labs over his conviction that it was silicon, not germanium, that was the future of the transistor. Shockley Semiconductor Laboratory now has a plaque to mark this fact, but the real legacy is probably that of having nurtured employee Gordon Moore to go found Intel in 1968.

The kids are allright
Down the road in Sunnyvale, next door to Yahoo and Juniper Networks, is the operational headquarters of London-listed Spirent. Founded in the UK in 1936, the £1bn market cap is by no means an upstart, but the tester of telecoms and networking equipment still sees a presence in the Valley as vital. “Our operational headquarters are here is because our largest customers are here. If you look at the Bay Area in general, whether it is Cisco or Juniper or Extreme or Broadcom or Brocade or all the IP companies, the Googles, the Facebooks, the Yahoos … clearly it is the centre of tech,” said CEO Bill Burns. “Everybody who is anybody in technology has some kind of presence here.”

While Spirent is not fighting for its place in the sun in the same way as a company like Yammer, it does not take much revision of Valley history to remember that the world of technology innovation is ruthless. While Burns acknowledges that being “a young CEO with a ponytail” is fashionable, he points out that most companies are run by people who have grown up in the industry. Still, Burns thinks the constant influx is valuable also to the established businesses: “It is good for the industry to have smart and innovative new ideas, because it pushes all the rest of the companies to continue to do that. It really is about trying to transform your business over and over again, because if you do not keep up and do not make that transition, someone else will supercede you. […] Start-ups push bigger companies to be more innovative and make that change internally, or they go and acquire the new technology because the smaller company is further along with it.”

Friends of friends
Entrepreneurs keen on more urban settings in downtown San Francisco are mostly found in SoMa, an up-and-coming innercity area far from the chipper bells of the city’s ubiquitous cable cars. VigLink’s business is weblink monetisation, and founder and CEO Oliver Roup moved to San Francisco especially to set up the company in 2009, after leaving Microsoft.

“San Francisco is unmatched as far as the density of the people you want to reach. They are all right here, and many of our customers are a couple of blocks away. Every party you go to, every time you go to a bar you meet someone who is somehow related and helpful, and the ability to grow your network is amazing,” said Roup, as we met in his company’s warehouse office, where the birds on the walls reveal the former tenant’s identity as Twitter. In the Valley, Burns said similar things about the organic development of networks: “People meet at social or charity events, or while supporting local schools and universities. People are open and friendly and always willing to set up things. The introduction at an event is followed up with: ‘Hey, we met last week, we should go and have a coffee’.”

When asked why he decided to move to the city and not Palo Alto, Roup chalks this up to personal preference for an urban environment, and does not see the two as vitally different in terms of nurturing companies. The fundraising community, the venture capitalists, the banking resources, the law firms with the best technology knowledge for patents and M&A, all extend to cover the whole area. The same is also true on the flipside, however: the price of talent is steep. Every t-shirt wearing CEO I spoke to agreed that this is a place where the best engineers can wear what they want, come into work when they want (within reason) and collect good salaries before moving on to something new in a year or two. “But on balance, I think this the best place to start,” said Roup. “If you want to be an actor, you go to Hollywood; if you want to be in the money industry you go to New York;, if you want to be in start-ups you go to Silicon Valley. You can certainly do all those things in different cities, but you are not where the action is.”

Appetite for risk
Other cities could probably replicate many of Silicon Valley’s key characteristics to attract a startup community, but it would be hard to supercede the Valley’s size and history. The sheer tolerance for risk is a particular element that feels very alien from a UK perspective. Suranga Chandratillake, the San Francisco-based CEO of London-listed Blinkx, explained during our chat how the UK venture capital scene has many players from a finance or big company background, but you cannot use those criteria to assess a startup because they work completely differently.

“With a startup it is more about products, the market, and about what products will work for a market. It is about what kind of personalities you need to build a team,” said Chandratillake, who founded video search software specialist Blinkx in 2004 and spun it out from Autonomy in 2007. It is understandably hard for a venture capitalist to back an entrepreneur with nothing but a PowerPoint presentation and a big idea if he or she has no idea what that is like; this is an extreme example, but the West Coast is probably one of the very few places where that can happen. Part of the reason for this, said Chandratillake, is because the Valley now has an investor community that is established enough for former tech entrepreneurs to have gone full circle, meaning many are now part of the funding teams themselves.

And with tolerance for risk also comes a vastly more helpful and encouraging atmosphere. Sam Shank co-founded HotelTonight, a mobile app for same-day hotel bookings, in 2010. As we met in his SoMa offices, the CEO tells me how he found the Bay Area to provide a very different experience than other places in the US. “In Chicago, when I said I was starting a business, people said: ‘That’s so risky, I’d never do that.’ In Chicago, you get the five reasons why it is not going to work. In San Francisco, you get the five things you should do to be successful. You get, here is why you are going to succeed, and some introductions to help you succeed. Everyone wants you to succeed.”

Fail better
The fact that this hyper-optimism also allows for people to make mistakes is probably one of the key differences that makes Silicon Valley such a powerhouse. This attitude is instrumental to creating a nurturing space for feisty tech geeks to try out new ideas: you cannot make an omelette without breaking a few eggs. Of course, no one has forgot what it looks like when it goes wrong: the dot-com bust was only 12 years ago. And now, heat is again building in the sector, as seen with the values attached to the Facebook float and increasingly highly priced M&A activity with billion-dollar price tags for Instagram and Yammer.

Looking at the big picture, San Francisco is in many ways the ultimate boom-and-bust town, stretching all the way back to the Gold Rush in 1849. The same attitude that meant the city was rebuilt at a pace of 15 houses per day following the 1909 earthquake, which flattened the city, may be the very same reason the Bay Area has such an impressive track record for coming up with things that literally change our lives. There is of course the hope that the Valley has learned a thing or two from its previous failures, and will avoid busting quite so spectacularly again. Fingers crossed that 56 years of experience will count for something.