The Failure of Athos Wearable Technology.

I've been documenting my predictions over the last few years with what I believe is a complete waste of VC and Limited partners money in technology investments.

Athos has raised close to $50 million and it just goes to show that some VCs just don't know what they are doing.

The company sells a wearable technology that tracks your muscle electrical pulses to determine how much and how effective you are working particular muscles.

Well, that doesn't seem to be much of a mass market to me.  I might be one of their target customers because I have been lifting weights for a long time, but I don't need something like this.  The average consumer isn't going to need this either.

So maybe professional athletes, or extreme athletes?  A very, very niche market.

The apparel that you have to use is like a slim wet suit directly next to the body (no under garments).  Really? I want to push myself and sweat with a completely non-breathable set of "clothing"?  Not likely.

Add to that to purchase get a full set (shirt and shorts) with two of the core units will cost you around $600.00. And with it actually "backordered" and not guarantees that it will ship by 12/25/2015, I would guess they've had very limited demand and have kept supplies low.

And since the suit needs to be next to your body, when you return it, the company basically has to burn it.  With slim margins in the price of the suit, I would guess the company could make $100.00 on a full suit sold.  But with the amount of returns that they would get, it would eat away at any potential of profit.

Again, dumb VC money, just being thrown away without doing any competent due diligence on the market and the viability of a product.

Who knows, the company might succeed by selling using the "greater fool" theory.

Until Next Time!

Transformational Leadership and Employee Retention

It's been a while since I've posted to my own blog.  I've been very busy with some management and hands-on engineering for a couple of companies.  I wasn't always a great manager.  I was fair and I don't believe I was too hard on employees in the early days of my own company, but I was more of an authentic leader than a transformational one.  But a lot has changed for me in the last 10 years.

I soon will be finishing my MBA and have learned some new ways of being a great leader.  Although I had learned quite a few things from running my own software company for 10+ years, I did learn a couple of new things when it comes to effective leadership.

I really have always been pretty honest and open with employees about everything and always strive to keep employees engaged and help them build their career, even if it was destined to be outside my company. You can see from my LinkedIn recommendations that I think I've achieved great success in being a truly transformational leader.

I have recently been working for a couple of people that aren't transformational leaders and are more transactional leaders.  It is very tough for a transformational leader to work under transactional leaders.  This is the most significant reason I have left companies recently.

A good infographic that I recommend everyone read and understand some of my goals with respect to becoming a better transformational leader can be found here: http://www.officevibe.com/blog/stats-employee-engagement-infographic 

In the mean time, I am engaging my reports with transformational leadership techniques and still trying to up-manage so that the executive staff will eventually learn how to keep employees engaged.  The rule-by-iron-fist techniques of the past do not work very well with the new generations.  Time will tell if the company can be successful or not.

The Demise of Google Glass

This is one more prediction for 2013. Google Glass will be a failure.  It's a nice nerdy/geeky thing, but really?  It's a novelty item, but one that will die very quickly.

But KPCB has going to invest in apps for this? http://venturecompany.com/blog/2013/05/kpcb-culpa-tua

What has the venture community come too?  What a bunch of buffoons.   Please just give me the money to light some cigars with.  It will be faster and less expensive.

Are the limited partners really on board with this?  What about the safety implications?  Does having that much money really kill brain cells?

One more prediction for 2013, the complete and utter failure of Google Glass.

Until next time.

2013 Predictions

I've decided to start documenting my predictions, because when it comes to the technology, I seem to have a knack for it.  Call it common sense, intuition or just a gut feeling, I seem to be able to get it right quite a bit.

Some past predictions:

The gaming industry will have a major shift away from retail titles into more digital titles (predicted circa, 2008).  I first predicted within a year, but then realizing how things move I extended my forecast to 2 years.

I will now make another prediction about the new video game consoles coming out of Microsoft and Sony, DOA, yes "Dead On Arrival".  Nintendo WiiU/3DS and other consoles are going the way to of the dinosaur.  Yes there may be still some hardcore gamers that will buy the systems, but in general it won't be enough to support a profitable business.  Nintendo will shift focus to strictly software and eventually get out of the hardware business (prediction: about 2015 or so).

The reasoning behind all this?  Simple, time.  People have less and less time to spend on video games.  They have to sneak in time here and there.  The younger generation is using portable devices, but they are multi-use. Parents hand their kids their iPhone or their iPad and have games & educational titles on it.  This exposes the kids at an early age in using portable devices. Apple has a pretty good foothold on this market.

I predicted the slow adoption of Windows 7 and what I see as a complete failure of Windows 8 and the Microsoft PC business. I fully predicted that this wouldn't be a success.  I don't think it will kill Microsoft, but it is going to reduce their total earnings.  That coupled with the decline in XBOX 360 sales and the failure of "XBOX 720" will probably reduce their earnings by at least 30-40%.  They will survive, because they have lots of cash in the bank and are entrenched in enterprise and server side software.  But that will soon change also.  I will talk about that more later.

Apple and Samsung - Continue to split the market.  Apple has made a business out of fantastic user interfaces and ease of use.  I used to be a hardcore PC user and when the Macbook Pro and Air came out and I could use bootcamp for Windows, I got rid of all my PCs.  My Macbook Air is not a real monster powerhouse, but it's good enough for what I need to do, which is a lot more than the average user would use it for.  The only thing that can hinder Apple at this point is pricing.  They get a premium for their products and I am willing to pay for it, for now.

Now comes a bold prediction, at least I believe it is.  A certain company is quietly eating away at all of the above mentioned companies.  They are are missing a couple key ingredients, but are partnering with the right companies. Who is it you may ask?  Amazon.  Amazon has become an under the radar powerhouse in different areas that will help propel the company to a new level.

Amazon EC2 and other systems are their cloud based servers that allow you to run instances of your own servers on their hardware.  No more hardware maintenance for you.  You can install Windows Server or Linux on your server and setup a really good system without the investment in hardware.  The only downside is you are at the mercy of Amazon's infrastructure.  But so far, so good.

Now along comes the Kindle, Kindle Fire and they just released tablets that rival the iPad 3 with retina display and it's cheaper.  It's Android based, so they've partnered with Google.  While I'm not a huge fan of some of the decisions that Google made with respect to Android OS, it is getting better.  Also, Google did release their Native Development Kit, which helps overcome some of the problems with speed by using C++ and also allows easier porting of applications to the system.

I mentioned their were a couple of areas that Amazon is missing.  The first being the OS.  Being beholden to others for an OS can be very cumbersome.  Google has mitigated this problem a little by allows hardware vendors to modify the OS for their hardware.  It does make and engineers job much harder however.  The second area is the phone area.  Samsung rules the Android phone market.  This is mainly because of the Asian market, but is had spilled over into the U.S. market.

But this is possibly a good strategy for Amazon.  Let Samsung borne the cost of the phone hardware and Amazon will have and end to end solution for the software.  Software is where the money is made anyway. For instance take a multiplayer game on Android.  You can play it on a Kindle, Kindle Fire, etc.  To download and pay for the game you can use Google Play or Amazon Appstore for Android.  Even if the game is put in both places, you can use the backend servers of Amazon for the multiplayer part of the game.  Now Amazon has you using their hardware, possibly their app market and their backend, taking a piece of the pie in each step.  And I for one am more than willing to pay for this.

It's going to take a couple years (probably until 2015), but I predict Amazon is going to become a big winner.  Google and Samsung will remain strong, albeit in more a niche sort of way.  The big losers will be Microsoft, Sony, Nintendo all will have diminishing returns upwards of 40%.

The only twist to this is if one of the majors decides to make an all in one system that is open to all developers to develop for.  They would then have to make a profit on the hardware or really put out some killer games for the hardware.  I would definitely pay $299-$399 for a product that can play  Blu-Ray, allow PS/3/4 games to be played, surf the web, play back my music, be a home based cloud server that connects to my Android/iPhone to retrieve movies/music/pictures and was easily upgradeable to large hard disks of my own choosing.  That would be the panacea of a home entertainment system.  Sony, Microsoft, you guys listening?  No, how about Amazon?  They would be perfect for this.

I will update predictions when I see them.  If for no other reason to document what I think is going to happen in the market and revisit to see if I am right.



 

Electronic Arts and Riccitiello

It's no secret that I've been vocal about what I see as a waste and just dumb decisions in executive leadership in the game industry.  What I find very interesting about the really really bad decisions is that it was able to spill over into VC;s and game industry investors.

Bing Gordon, runs sFund that is mentioned here.  http://venturecompany.com/blog/2013/03/kpcb-mea-culpa/ He also was the primary VC behind Zynga.  LP's should be waking up and smelling the losses.  But they will probably keep these guys in power and accept the millions more in losses.  When will it stop?

Electronic Arts and Elevation partners is another prime example of how investors and Limited partners have been swindled out of hundreds of millions.  I would guess that it's over a billion in losses total now.

http://news.cnet.com/8301-10784_3-9796120-7.html

How this cannot be "illegal" is beyond me.  You start a VC firm, then go to work for a company that buys out one of the firms investments for an ungodly amount and personally benefit from it.

From the article:

"Not only may the deal strengthen EA, but Riccitiello will probably personally benefit from the deal. He remains an investor in the Elevation Partners fund, and could stand to make $4.9 million on the deal following the distribution of the profits to fund shareholders, according to a filing EA made with the Securities and Exchange Commission Thursday"

Like Georges from the venture company, I've been vocal about my dissatisfaction with the lack of good VC performance, especially when related to the game industry.  The VC model and this model is broken. Now it happens for the 3rd time with respect to Electronic Arts.  The fiasco of a launch of the Sims being reported as the probable reason.

http://techcrunch.com/2013/03/18/ea-ceo-john-riccitiello-steps-down-larry-probst-becomes-executive-chairman/

I am going to start putting my predictions in my blog from now on, as Georges has been doing.  Here's my take on the state of EA from 4 years ago:

http://www.phatyaffle.com/index.php?option=com_fireboard&Itemid=107&func=view&id=781&catid=38

Excerpts from those blog posts
---------------------------------------------------------------------------

EA and Riccitiellos Plight 4 Years, 4 Months ago

Karma: 50

EA loses $310 million for 1 quarter. Ouch. OK, I'm going to be a blunt and rant a little here. I've been critical of the game industry costs of development for games for quite some time now. In order to make good profit you need to find efficiencies. We have taken that model and been using it for a few years now. It's either that or keep losing until the company is broke. Investors in EA are not going to be happy. But heck, EA can pump out the next Madden and make coin for it. More power to them. But the business will not have significant growth unless they can find alternate streams of revenue. Social Gaming, Online gaming, digital distribution, virtual goods, etc. But they are growing stagnate and complacent. Stagnation will kill a company. I wonder if he remembers the old phrase from EA "mutate or die". He seems to have some good common sense and is promising to do just that. See this article: http://www.gamasutra.com/view/news/20900 Also, Also, another blast from the past!. EA.com spent 200 million back in 2001 to get online, I heard it was closer to $500 million to get online in the end. http://web.archive.org/web/20061022183807/http://www.videobusiness.com/article/CA619045.html Riccitiellos said the same thing back then. He wants to focus on games that have higher profit potential. Problems is you don't know what is going to hit really big. Might as well make profit current IP and on the little ones that do profit until you find that hit. How hard is that business plan? I hope EA shareholders see this, how long before EA can wake up and see the shifting winds? Behemoths like EA are starting to look like the old Behemoths of the past that aren't very nimble and just bleed money. --------------------------------------------------------------------------- Maybe 4th times a charm for Riccitiello?  Maybe we'll see him back in a year or two with another "bill of goods", er em, game company to sell EA. Isn't the saying, "fool me once, shame on you, fool me twice shame on me".  What about 3 or 4 times?

Agile or Waterfall? How about both!

In the many years I've been doing development and managed many an engineer, I've been through both development processes.

I've never been very happy with either and always used a blend of both.  Some companies have coined
the term "Nimble" or "Wet Agile".

This, in my opinion, is probably the best way to get a project completed close to on-time and on budget with getting your team as efficient as possible.  It also bridges the gap of a Waterfall process with the ability of Agile to get a product that your customer wants.

There is a fantastic white paper on the subject available from:

http://www.commonplaces.com/sites/commonplaces.com/files/attachment/article/a_guide_to_planning_your_next_web_project.pdf

It's exactly what I like to do in terms of development process and managing that process.

What's nice about it, is that it fits well withing the Mobile/Web development process.  Most of the time I see development that is a combination of web front ends, server backends used in conjunction with Mobile
client applications.

Using the "Nimble" approach solves the issues to allow good processes and architecture to be in place across the entire software system.

How Kickstarter is Killing Innovation

How Kickstarter is Killing Innovation

A better choice is Rockethub: http://www.rockethub.com/projects/14868

I used to like Kickstarter.  I even blogged about it before. But I think it has declined into something that is bad for innovation.  You see, like other projects, my Kickstarter project was declined.  Now, you may be thinking, well it happens, maybe your project didn't fit the guidelines.  That isn't the case.  Here's the story:

I spent quite a few weeks putting together the pitch for my project.  Followed all the guidelines.  To be honest, I thought of their process as a contract.  You follow the rules, etc, we will post your project, that simple and we get a percentage of what you collect. 

Well it didn't turn out that way.

They basically say that the project doesn't fit into their "focus" and isn't a "best fit" for Kickstarter.  Not that it violated any of their guidelines.

So now, Kickstarter has turned into basically a Venture Capitalist of sorts.  A Kickstarter staff member gets to decide if he thinks your project is worthy.  Only then can you have the project posted.  Crazy isn't it?

This has really turned me off to Kickstarter and I won't be supporting any more projects on the site.  You can call it sour grapes or whatever you want, but I don't think Kickstarter is or should be the authority on what is a good project.  They are a platform to enable you to reach friends, followers, and possibly other interested people in your project.  But they are afraid, very afraid.  This is probably why they aren't going to be approving many crowd funding projects in the future.

http://venturebeat.com/2013/01/22/why-this-jilted-kickstarter-backer-decided-to-sue-why-he-was-right/

Also, now that I spent a good deal of time and effort to massage my proposal into their Kickstarter system, shouldn't I be able to charge Kickstarter for my effort?  I'm not an attorney, but to me this seems like a breach of contract and non-payment for that contract.  I signed up with Kickstarter to both contribute and get my projects funded.  I started the project and expected that I would be compenstated for my work, by having my project go live and be able to get some exposure for my time. I followed their guidelines to a 'T' and spent all this time and effort only to be told sorry, your project isn't in Kickstarter's vision.

They should kill the category and not let me think that my project has a chance, since it seems that they are doing this because of legal reasons.

They will probably take down the preview link, but it is here and I will soon have it available on another website using the selfstarter.us code base.

http://www.kickstarter.com/projects/klhurley/1105551075?token=a2c42f6d

So, to all my friends, if you use Kickstarter to try and fund your projects, I won't be contributing any help through their system.

Here's the declined emails.

1. Project declined

   • 
     Kickstarter Staff

     Friday Jan 25, 8:19am PST

     Hi there,
     Thanks for taking the time to write to us again. We took another look at the project after your message and, although we appreciate the hard work you've put into this project, it is unfortunately not the best fit for Kickstarter. This isn't a judgment on the quality of the project, but rather a reflection of our focus.
     We wish you the best as you continue to pursue this endeavor, and we hope you continue to be part of the Kickstarter community.
     Best,
     Kickstarter
   • 
     Appeal
     

     Social Systems Technology

     Thursday Jan 24, 2:46pm PST

     I would like to appeal this. I'm not sure why you would reject this. It is a great piece of software for your iPhone and iPad and includes a great piece of hardware.
     You approved other projects which are very similar including, "OUYA", Parallella: A Supercomputer For Everyone, Twine, Transporter, CloudFTP just to name a few.
     All of these projects are similar and provide you with hardware and some software to access them. You've even approved a NAS device before.
   • 
     Kickstarter Staff

     Thursday Jan 24, 2:02pm PST

     Hi Kenneth,
     Thanks for taking the time to share you project with us, but this project is not a good fit for Kickstarter.
     Technology is a category with unique challenges and not all projects fall within our focus. We know building a project and submitting it for review is a lot of work, and we're sorry to have bad news to report.
     We appreciate you taking the time to check out Kickstarter, and we hope you'll consider us again.
     Thanks
     Kickstarter