My Blog Has Moved

You can now find information about me here: Riku Seppälä and my blog is at learning.seppa.la

The Admob data IS relevant to Nokia

Admob just released some data about mobile web usage. It shows that Apple is the market leader in mobile web usage with 40% of traffic coming from iPhones and iTouches. You can read the article about the data here.

Some people have claimed that based on this it's wrong to say that Apple has a 40% market share of smartphones. Well, that may be, but I would definitely say the data is relevant to Nokia, maybe even more relevant than the positive data showing an increase of Nokia smartphone market share.

The data on smartphone market share says that Nokia is still clearly in the lead with 43% of the market, for example this blogpost by the writers of "Communities Dominate Brands" states the facts pretty clearly.

However, Nokia's strategy is to become a service provider more than a handset maker. The actual handset is becoming a commodity, it's nothing more than a touchscreen that can communicate with the outside world in different protocols.

The important thing is what you can do with it, ie the Apps (calling is an app as well). Also the content is of course important, what you read and so on, for example twitter and Facebook. We don't actually use the phone, we use the apps inside of it. So the apps are important, and all the innovation is now done in the apps. That's where the money will be in the future - Ads, Games, Apps...

The Apps are created by developers, and the more users for Apps, the more monetization possibilities for developers, which also means more innovation. Here Apple is the clear leader, and the fact that it dominates the mobile web market is the evidence. The appStore has also paid off.

So clearly Apple is in a situation where Nokia would like to be - a content and service provider.

I also think that the markets where Nokia dominates now, for example China and Africa, will follow suit in adopting iPhones, if Nokia isn't successful in developing an ecosystem like Apple's that just works. The N900 is a good start, and I'm very eager to see how far it gets Nokia. I can't understand the lack of innovation around the N900 though. Again, Nokia is just concentrating on what you have in your hand, not what people do with it.

So don't come telling me that Nokia is the winner because they're selling the most handsets in a commoditized market with falling margins. I know they don't feel like winners.

Paths to Entrepreneurship: Part 1. Get started

(Cross posted from the Aaltoes blog: )

Forget what you've read, entrepreneurship is not about getting a great idea and then working very hard. It's a dangerous simplification of entrepreneurship, and actually very few successful companies are created that way.

In this post I'll describe 3 of the more common paths to successful entrepreneurship that we have identified in Aaltoes. The goal is to be able to provide some guidance on what to concentrate on in case you are a student and interested in becoming an entrepreneur.

3 Paths:

1. Be at the forefront of technological development

Some of the more known entrepreneurial success stories are based on a group of students that have acquired specific technological knowledge and gone on to create great companies. Stories such as Microsoft, Apple, Oracle and F-Secure have been created in this way. So if you're very good in a field which is not very developed yet, and few people are very good at, you have a good chance of creating something that is possible to commercialize. I think IT is already too big and developed, but you never know. The problem is that you can't really focus on bio- or nanotech in your own backyard because you'll probably need a cleanroom and some pretty expensive equipment...

2. Find a problem and be able to create the solution.

A lot of web startups are being formed these days, and the ones that survive are the ones that fulfill a market need. In case you do identify a market need, you also need to be able to create the solution. And market it. The reality is that any web startup that wants to get traction these days needs to have a massive marketing budget to be able to break into the market. That of course requires investment, and unless you've already created a company as described above, or worked as a director for a big company, you will not get it. Not for a web startup.

Web startups are good examples of companies that are created to solve a problem, but they're not really difficult to create or duplicate and the Intellectual Property (IP) is difficult to protect. There is a huge number of developers around the world capable of doing the same thing. And there will be someone solving the exact same problem that you are. The one with the best connections and best knowledge will win, which is probably the one with the biggest marketing budget as well.

There have also been examples of teams that have identified a problem, for example mobile email (back in the days...) or created an application for an industry in which they got experience from during a summer job. In these cases, the difficulty becomes finding a great team which is committed to creating the product. It can be a good opportunity while you are studying since you might not need any income from the project. So focus on solving problems and creating the team that can solve it.

3. Be a researcher or connect with research

If you're a researcher, you will get paid and have resources to be at the forefront of technological development. It is probably easier to become a researcher and create something new than to be at the forefront of development yourself. For business students, the real opportunity is to network with researchers and find an interesting technology to commercialize or jump on board early in the companies development.


These are the entrepreneurial paths I think are the most realistic for students to become entrepreneurs. It's a lot about being active in the entrepreneurship community and networking and creating a great team. You also need to know where you stand. If you're not developing new technologies yourself and don't have a lot of experience in an industry you have very little possibilities of developing your own idea into a startup.

Aaltoes was created to help you start in one of these paths:

1. Attend our networking events and connect with other students that are interested in solving problems. Maybe you can find someone with great technological skill or the business visionary you need to commercialize your skills. Getting a committed team before you even now what to work on can also be valuable.

2. Attend our Technology Safaris and connect with research that you can commercialize as part of a team.

3. If you already have a solution to a problem but lack the skills to make it happen, join our Pitching Evenings and get your project jump started.

One of the points I want to make is that companies are not created by a group of business students thinking about different ideas. They might come up with a new sort of consulting company or a new way of distributing school books, but the ideas will be constrained by their experiences and knowledge. In addition, even if they can identify a good problem to solve, it will most likely require more financing and resources than they will be able to gather.

Anyways, probably the most important thing to do is to create a great team which has the required technical skills to pull something off.

"entrepreneurship is not about getting a great idea and then working very hard"

Entrepreneurship is about solving problems or using new technology to solve problems and having a great team that can execute.

Riku

Nokia Buys American Carrier and Releases The Tablet

This is not an authentic press release, but maybe something that we'll see quite soon:

Nokia has announced that it will buy a wireless carrier that covers the US and Canada. Nokia will sell its phones with a wireless package or without it. Nokia aims to undercut the prices of competing carriers. It is part of their new strategy in America. Company representatives comment:

"According to research by Technology Firm Gartner, consumers in the US and Canada pay 55 dollars for the same service that only costs 11 dollars in Northern Europe. US and Canada have advanced telecommunications networks, but the prices are the highest in the world. "

The margins of wireless carriers are not very high, but by integrating the value chain, Nokia believes that it can offer better service and lower costs to customers:

"The carriers are in a monopolistic position which hinders the advancement of communications in America. We want to change that. The carriers have also been able to exert power on Nokia, our best phones haven't even made it to the market because of the carriers. We were left with no choice but to start our own carrier."

The new Nokia strategy for America also includes the opening of Nokia stores and a single Smartphone platform.

"We'll be opening Nokia stores around America. We will also sell our carrier services from our own stores. The need for this has been made clear by some of the workforce that have moved from Europe to the US. They are not happy with their wireless service. The business model has been copied from the Northern European market, and we know it works. We are also working in collaboration with some Nordic carriers.

We will be offering unlimited data access and flat rates at any time for calls. We don't believe in restricting consumers and we want to allow predictable billing. In addition, there will be no international roaming fees and the calls will cost the same wherever you are in America, there are no long-distance fees. This has already been the case for example in Finland. It's economically feasible and offers value to the customers. The international call rates vary between 10 - 40 cents per minute."

"The opening of our new stores is happening at the same time as our new Nokia Tablet and Laptop are announced. The tablet runs on a completely open Maemo platform. This platform will be extended but always also supported. It is our answer to the need for customers and developers to only worry about one handheld and that you can keep all your applications and information for a long time forward."

Nokia believes that their technology is superior to what is offered on the market today.

"Well, of course we believe our phones are good. For example, for several years it has been possible to use your mobile phone over bluetooth as a modem for a computer. This is every day life for some people in Finland. However, in Americe, these are completely new features that have come out with the iPhone 3Gs. Unfortunately, Nokia has been unable to communicate these benefits to customers because of the pressure and control of carriers in America. Nokia is able to build the most advanced phones. So far, maybe not the most user friendly, but we're hoping that has changed"

It seems Nokia has found it's path again:

"The mobile carriers in America are barriers to Connecting People. Nokia wants to change that."

The Shift to Utility Computing / Cloud Doesn't Erode Competitive Advantage From IT

I sometimes see that researchers and technology analysts write that it is not possible to create competitive advantage through Information Technology. The reasoning is that as computing is becoming a utility and applications are moving to the cloud, IT becomes more of a competitive necessity that something that provides differentiation.

The analogy is often made to electricity;

1. first electricity was produced locally. In the same way as companies have their own data centers for computing today.
2. electricity then shifted to grids, and was provided as a service or "utility".

As a utility, electricity didn't provide any competitive advantage.

Computing is now becoming a utility just as electricity did.

But what about machines that were run on electricity?

Companies that used machines and integrations of machines that supported their specific processes were able to create competitve advantage even after the shift to electricity as a service or "cloud" electricity.

In the same way, companies that can use applications and integrate them in ways that support their specific processes will be able to create competitive advantage.

It's just the infrastructure that is not in-house anymore, not the way we use it.

Apple Time Capsule (TC) Setup Problem Amber Light, Stuck in Restart or just Flashing Amber Light, Cannot Connect through the Internet WAN port

I just go a new Apple Time Capsule, and I had some trouble setting it up. I also couldn't find any solutions on the web, so I decided to write a short post of how I solved the issues.

My setup is a 2008 new MacBook and the Time Capsule which came with firmware 7.4.1. I have a functioning ethernet connection which I want to turn wireless with my Time Capsule.

When I started, Airport Utility only recognized the Time Capsule once when setting up. When the Time Capsule was supposed to restart, Airport Utility got stuck. After that, even by plugging off the power from and replugging the power the Airport Utility wasn't able to find the Time Capsule. The status light was just amber at this point, stuck in "completing its startup sequence"... Yeah, right.

Well, I'll now describe how you can fix this problem if you find yourself in the same situation.

I only had the functioning ethernet connection running when starting the setup, so I wasn't going to extend and already functioning wireless network, but I think it would be possible as well.

Of course, you will need the functioning ethernet connection all the time (or an already setup wireless which you will be extending with the Time Capsule.

First, make sure that your Airport utility is updated with the newest version (Airport Utility - Check for Updates...)

1. Downloading the newest firmware for Time Capsule (7.4.2 for me)

I noticed there had been problems with the firmware 7.4.1 for Time Capsule. Many people have documented that the 7.3.x versions work better, but I still decided to try the 7.4.2. It worked, but the 7.4.1 might not.

You can download the newest firmware without connecting to the Time Capsule (which obviously doesn't work...). While on your working internet connection, go to Airport Utility (found from spotlight or applications/utilities), choose the 'File' menu and choose 'Check for updates' while holding the 'Option' (Alt on a MacBook) key. This will pop up a menu where you can choose to download new firmware for any devices. Choose the newest firmware or any you think might work if your current doesn't. (The current firmware of the TC can be found on the opening screen when your computer finds the TC after a reset of the TC... See below)

2. Checking and Documenting your Network Values

Make sure your internet connection works with the Ethernet cable that you're plugging into the Time Capsule Internet WAN port (or the wireless connection that you want to extend). When that connection works, check and write down the values for the IP-address, Subnet mask, Router Address and DNS servers from your Network Preferences under the 'Ethernet' Tab.

3. Connect to your Time Capsule through Airport Utility by a full reset on the TC and Update the Firmware.

So because you'll probably be in the situation where your Airport Utility cannot find the Time Capsule, you'll first have to reset and connect to it:

1. Connect the ethernet cable from one of your Time Machine Ethernet ports to your computer.
2. Do a complete reset of the Time Machine by:
1. dsconnecting the power from your Time Capsule.
2.With a pin or something, hold the reset button while plugging in the power again.
Hold the reset button until the Status Light on the Time Capsule starts flashing fast
(amber).
3. It then takes about 1 minute for the Time Capsule to start up and you'll see it in your Airport
utilities.
4. When you see the Time Capsule in Airport Utilities, choose 'manual setup'.
5. In the manual setup, in the tab 'summary', click on 'version', and select to upload the version number you downloaded in step 2.

4. Resetting and reconnecting the Time Capsule with Manual IP Settings.

When Airport Utility shows the information about the Time Capsule, don't choose 'Continue', or you'll be in trouble. Go for 'Manual Setup'. (This is the screen where you can see the firmware version of your Time Capsule.)

In the manual setup screen, choose 'Internet' from the options at the top of the window. Now, choose 'Setup manually' for the IPv4 settings. Fill in the IP-address, Subnet mask, Router address and DNS Servers that you wrote down in step 2. (When checking your Ethernet connection)

(Every time you update your changes in Airport Utility, Airport Utility will ask you if it's ok to restart the Time Capsule and lose the connection for a moment etc. Press 'ok' or continue or whatever. )

So if you now update the TC from Airport Utility by pressing 'Update', you will be warned that you will lose the connection for a while. Continue and hopefully your Time Capsule will now restart. After the TC has restarted (you can listen to the process on the Time Capsule), you'll hopefully see your Time Capsule in the Airport utility. This time the Time Capsule should show a Green Light. Now you can start feeling a bit better.

5. Change from Manual IPv4 settings to DHCP

The last step is to change back to DHCP and perform the other settings such as names, passwords etc. This time, when the Airport Utility has found your Time Capsule with the green light after step nr 4., you can choose the 'continue' option instead of 'Manual Setup' as before, and continue with setting up all the things you need to. You can setup the names and passwords etc. Now, choose "DHCP" instead of manual setup of IPv4.

Follow the steps and let the Time Capsule Restart again... Now you will hopefully have a fully functional wireless network with the settings you chose.

I hope that worked for you. When I went through this process, it was iterative and took several hours. I had to reset the TC at least 6 times with different updates to get it working. If this didn't work for you, don't lose hope:

Extra:

6. If it still doesn't work, go and setup the IPv4 Manually from the 'Manual Setup' again as in Step 3.

Let the Time Machine restart again with manual IPv4 settings so you get the green light. Now choose 'Manual Setup' again, go to internet and choose 'Using DHCP' for 'Configure IPv4'. You'll have to update again and let the Time Machine restart.

I hope it works for you. If you're having trouble with these steps feel free to comment and I'll try to guide you better.

Shame on Apple.

The Chrome OS and a glance of economics behind cloud computing

Someone finally got it. Quite a wonder actually that it was Google. I will just point out two facts about the good ideas behind the Chrome OS. In addition, I'll discuss the most important two things that will drive the move towards SaaS in the enterprise. (It might not be what you think)

Firstly, which two annoyances does the Chrome OS promise to help us with?

1. The most annoying thing about a laptop: Slow Booting.

Chrome OS just boots to a browser. It's fast. It skips most memory handling events which make Vista the slowest booter ever.

2. Not being able to smoothly collaborate and access your data from a distance securely.

Chrome OS is built around security for your web apps. And it will run your cloud applications faster, as we've seen with the Chrome browser. Chrome OS will be ready for enterprise applications to move to the cloud.

Now we come to my second point: Why do I predict that enterprise applications will move to the cloud?

Because the fixed costs for the providers are much lower and the relationship in a SaaS model shifts the advantage to the customer:

One of the key cost structure drivers is the need to support legacy versions of software. Because the SaaS provider doesn't have to support legacy versions, the costs of innovation will be lower, because the developers time isn't used in support. For example, if we compare the COGS (Cost of Goods Sold) to revenues of SAP and Salesforce.com:

SAP	48%
Salesforce	13%

This is an indicator that Salesforce is able to sell its software with a margin of 87%. The rest can be put on developing the software and ensuring sales. SAP on the other hand sells the software with a margin of 52%. SAP has to rely on heavy support fees to keep its business running (54% of SAP's software related revenues come from support).

The difference in these business models is unsustainable, which is why enterprise software will be driven to the cloud.

In addition to the cost structure difference, the SaaS model has advantages because of the relationship that is built between the provider and customer:

The provider relies on the customer to be satisfied enough to continue paying the monthly fee.

In a packaged application relationship, the seller wants to extract the maximum price beforehand, and after that has a monopolistic position to demand high service fees.

I think these differences are the key to why software in the enterprise will move towards the cloud. Security issues will just be solved, that's the beauty of technology.

How will the business IT game play out? Legacy vs. Agility

The amount of interesting web applications springing up each day is overwhelming. It makes me think that there are a lot of smart people out there who are allocating their scarce resource (their time) into projects that will linger a long time and then die out. I wouldn't want to be in that field, doing consumer web services. The barriers to entry are way too low, and the return on investment as well. There could be a lot of space, if we compare to tangible products for example. The problem is that the web provides zero-cost logistics. But that's a question for another post. Today I want to concentrate on Business Infromation Systems.

Business Information Systems (or applications, whatever) have been ruled by a few companies. Everyone has Microsoft (word, excel etc.). Then there's a more directly business oriented group of giants, SAP, Oracle and so forth. These giants have been attacking the balance sheets of all the companies in the world for years, making them believe that they cannot survive without paying their ridiculous licensing fees for software that is developed by such a huge amount of developers that no one really knows where the software is going.

More agile methods have been developing all the time. Ruby on rails, django and other rapid development methods have sprung up opportunitites to create customized applications faster.

Service Oriented Architectures (SOA) and SOAP promised making integration a breeze, and when that didn't quite work out as expected, REST came along and is looking quite strong in enabling new, easier ways of data integration.

What is needed now is some good ways of calculating ROI for development, fast ways to develop and easy integration. Using services such as Boomi, companies will be able to create an ecosystem that automates a lot of manual work, thus raising productivity.

In my opinion, some web applications, such as Dabbledb are already at a point where companies should start using their services and see what they can make faster using these easy alternatives to custom application development or out-of-the-box solutions.

It just isn't worth spending huge sums of money running an IT infrastructure that isn't agile, when it is possible to do simple collaboration with Google docs, just settle with Gmail and create fast business applications with Outsystems, Wavemaker or Hammerkit. Or just settle for Zoho and centralize your IT there.

One exciting company that's pushing the boundaries of productivity is Mark Logic. They allow companies to retrieve unstructured data and use it for analysis. Out of the box. No code. Just deploy. Once these technologies become mainstream, and once they are easy enough to use such as any web 2.0 service, productivity will rise fast, and the dilemma of information system success will be a faint memory. (the dilemma refers to the difficulty of research in finding a connection between IT investments and productivity).

I think the research on IT investments and productivity has been led astray. It should be built from the ground up. What can be improved by IT? How much? How much will it cost?

Instead, IT is taken as a bulk investment, money is poured into a hole, and then we try to measure something which at the same time is influenced by another 10 meaningful factors. I think it reflects well the products of the biggest vendors. You're just buying a lot of trouble, because they make you feel like you need it to stay competitive.

I just think companies should stay logical and start calculating what they really need.

Teachings from our AES TechStart event

My blogpost from our AES blog

We had the first amazing TechStart event on Monday at Eteläranta. The evening was organized together with SDG and The Finnish Software Entrepreneurs Association.

First of all, we had two Pitches from Startups looking for interested coders and sales persons to start working for them... These are early stage startups, and really great opportunities to learn and get to do something important during the summer.

Koala is a Startup developing non-visual controlling of the mobile. It was the second time I saw the demo and it still amazes me. So with Koala technology you can control your mobile with gestures without looking at your phone with the help of a 3D sound menu. I can't really explain that, you have to see it. They are looking for a Marketing & Sales person, student, graduate or more experienced. 2 Application developers, fulltime, with experience from Mobile, Java, C++. For this opportunity contact Raine Kajastila, firstname.lastname at tkk.fi.

Another opportunity relates to a team from Sibelius Akatemia, they are creating a professional tool for Musicians on the iPhone, they're looking for a C++ coder and a Business Developer. That's a summer project. You can contact Kristo Ovaska for more information, at fristname.lastname at gmail.com.

The TechStart Evening

The evening started off with a short info by our host, Jori, and the Software Entrepreneurs Organization. After the intro we got the enjoy the real beef, three very interesting presentations by some of the top entrepreneurs in Finland:

1. Teemu Kurppa from Huikea (ex-Jaiku)
2. Tuomas Syrjänen from Futurice
   
3. Osma Ahvenlampi from Sulake
   

I'm sure that all the tech students present got some very interesting new viewpoints to development and entrepreneurship. It was also a great event for everyone else... Gathering the main points from the guys about entrepreneurship, it would probably be the following:

1. Figure out an interesting problem to solve
2. Will, Vision and Persistence
3. Be lean, fail smart and learn fast

After the presentations we got to hear about Microsoft's Bizspark program, a program that allows startups to get their hands on all the Microsoft developement products for free. At least most of them. We also got to hear the stories of two Startups that have been in the program: GWeb2 and Sopima. Excellent stuff, go and check it out.

Value of Code = 0 and some more stuff

Teemu Kurppa from Huikea gave us his insights of the mobile market. Huikea is still in stealth mode, but seems to be targeted at the mobile market... Well, it is according to Teemu. Some pretty clever mathematics clearly shows why the mobile market suddenly is so attractive, and why the iPhone is so influential. I remember when the iPhone was released, Nokia was saying that it's not a threat to them at all, it's such a marginal product. Well, things have changed a bit, but still last autumn I was discussing with some Nokia Strategy people and they commented that Nokia has a strong position regarding smartphones. The logic was that Symbian has something like 2 million registered developers. And Nokia still has the most phones out, so developers reach a maximum amount of users. Right?

Teemu drew us this table:

OS/Phone	Amount of Phones Sold	% With Flat-Rate Data Plan	% Of App-Educated Users	=	Total Market For Developers
S60	140M	20%	10%	=	2,8M
iPhone	20M	100%	50%	=	10M

It's quite astonishing how one company can create this eco-system of Developers, Users and Distibutors/Operators. It's actually very smart, currently obvious but definitely not easy. This clearly shows why the level of innovation is so much higher in the iPhone compared to others. One of the key aspects that Teemu presented was of course the appStore and the ability for Apple and the developers to monetize the apps quickly and painlessly.

Teemu went on to discuss about mobile payments, and how the appStore changed the game since it became possible for startups to start monetizing on mobile apps. The new innovation from Apple in OS 3.0 are the in-app purchases which again allow a new level of innovation and monetization.

About the payments, Teemu also went on to describing the URL as a superior distribution model (Viral & Automatic updates...), but that a good payment solution still doesn't exist. Read more from Teemu on his blog.

Next up was Tuomas, CEO of Futurice, one of the fastest growing Technology Companies in the World (well, at least it was Europe, which must mean the world as well, right?). He wanted to shape us all into entrepreneurs and his point was that it just takes Passion, Will, Vision, Persistence and the Ability to Learn. As well, you need a Team.

Learning was emphasized, and the ability to adapt to changes. As the company grew, and Futurice didn't really have any sales people, Tuomas had just one day decided to become a sales person. That's definitely will, and persistence. And I'm sure it's easier that way around...(Being more of a salesperson myself). Some other imporant things that Tuomas discussed were:

1. Even contracts are People
2. The less experienced you are the more dangerous money is.
3. There are a billion good business opportunities - You only need to find one.
4. The value of code = 0. Only code that is in use and solves a business problem is worth something. If someone has a better solution than the code you've been working on for a year. Use the better solution.

Osma Ahvenlampi, CTO of Sulake also discussed the issues that according to his experience are vital in entrepreneurship and especially Software entrepreneurship. Some of the pointers that really caught me from his presentation were:

1. Starting up now is cheaper than ever.
2. You (and he) are wrong most of the time, so the key to decisions is to make them and the continuously revisit and realign the decisions.
3. Fail Fast. Fail Smart. Learn Fast.
4. Produce value for your customer: It probably isn't what you think it is, so test the market now. You always release too late (Because even he does)
5. There is one metric that rules over all: Cycle Time (release-to-release)
6. Small teams rule.

Learn more at startuplessonslearned.blogspot.com

I think that was a bit too much wisdom for a blog post, but if you've read this far, congratulations, and please comment about AES or TechStart!

TechStart - BioStart?

AES will continue to organize TechStart types of events. We'll gather some great entrepreneurs for a specific field and let them tell you about something interesting and how they see entrepreneurship and let them share their expertise on their subjects. It's a great way to meet interesting people and generate stuff to think about. I'm sure that there were a lot of people who got new ideas from TechStart.

Riku Seppälä, AES

Capturing the Learning Process - Example Django

From my experience as a teacher and learner, I've noticed that information actually is not the basis of knowledge. You can never just show someone how to solve a maths problem. They'll just forget it. What you have to do is the help the student to realize how to solve it. Usually it helps to ask the right questions for example. So that the student can have an epiphany and suddenly get it. Feels great.

Well, that's the basis of my Project of Capturing Learning Processes. I don't have a proper name for it yet though. This is a project that's going to take a while to conceptualize, since I want to revolutionize learning from the starting point of identifying the problem. I'll call the project sparks for now.

Problem: There is a lot of knowledge lost in learning. Learning is inefficient. Let's make learning more efficient by using the web.

I'm not going to tell more about the project right now, until I get a bit further. For now, I'm going to settle on Capturing my own Learning Process. I'm going to learn web developement on Django.

You can follow my learning process on my Django Learning Process blog