I was kindly invited by Microsoft to join their UK launch of BizSpark - a worldwide initiative from Microsoft in which they will give participating startups three years of free software licenses, mainly to their development tools, server and database software as well as Microsoft-powered cloud hosting. Further Microsoft provides some level of additional support through their network partners and selected people within the broader Microsoft organization, as well as some sort of visibility on Microsoft’s website and through their communication. After the three years startups are asked to pay a $100 program enrollment fee and (obviously) purchase the necessary licenses for your, then hopefully humming, business. Participation rules are simple: Your company must be less than 3 years old and generate less than $1m in annual revenue.

Sounds good? Even great? Ready to enroll?

Well - not so easy my dear friends. Consider what the program really means for your company on the one and evaluate the real benefits on the other hand.

Let’s start with the benefits: You get development tools, server and database software for free. Well - big deal. My companies (and many, many more) are developing software with free tools since the dawn of the Internet. The magic sauce is called Open Source - Webserver happily hum along using Apache, databases run smoothly under mySQL, applications are served by PHP, coders spend nights happily hacking away using Eclipse. And this is only one set of possibilities. There are nearly endless options for you to have all the best (literally the best) tools in the world for free. So - what I get from Microsoft is something I would get for free anyway.

Ah - I forgot. Cloud hosting. Well - I get really cheap and reliable hosting from a whole stack of companies. And great cloud hosting from companies such as Amazon (with their amazing S3 and EC2 services) or Mosso (which is essentially RackSpace, one of the great hosting companies out there). So - yes, Microsoft is offering me something for free which I would otherwise pay a few dollars per month for. But at which price?

Now this brings me to my second point - the true costs of the program: What Microsoft is obviously trying to do here is lock you in. Just as they locked you in with Windows and Office, they lock you in their .Net framework as well as Microsoft server and database systems. Even the rather long period of three years for the benefits of the program are really cleverly chosen - after three years you are normally at least at version two of your software. Which makes it really unlikely that you will switch the technological backend anymore.

What does vendor lock-in mean for you? Hmm… it might not mean anything for you and your business. It might mean that you will need to pay dearly for licenses at the end of the three year program. It definitely will mean that your options in this evolving world of technology are reduced - you put your bets on a single horse and have to go with it.

In essence I applaud Microsoft for their program - I am all for every support the startup community can get. But you have to weight the advantages and disadvantages of a program like this - and personally I will continue to build companies who’s servers run on Open Source software. Simply because it’s a better business decision for me.

This - for once - will be a rather personal posting…

Those of you who have known me for a while, know that I strive to work in areas which tend to be real challenges and where I aim to somehow make a dent (if not in the universe than at least in the area I work in). A dear friend of mine once described this as “choosing the stony path”. It is just so much more satisfying and fun.

Now - after a rather long search - I found a new calling: Since a few days I work with Mozilla (home of the Firefox browser) on creating their Open Innovation program (to get a glimpse of the things to come check out Mozilla Labs’ Concept Series). This is a tremendously exciting opportunity - working with some of the smartest people around (Chris Beard, Mozilla’s Chief Innovation Officer or Aza Raskin, Mozilla’s Head of User Experience to name just a few) on a topic which hasn’t been done before and which has the potential to change the way innovation is done on the Open Web.

This is - hands down - one of the most exciting jobs in my life (it actually reminds me a lot to those nights we worked through, while being part of the Transaction Services Group at eBay - oh, good times!). And for those in the know: Yes, I will once again work with Jane. Something I am really looking forward to.

Great times…

I read a lot of books (yeah, Amazon must love me!). I strongly believe that you can learn a ton by reading the right books - most books I read are therefore either business books or in related areas. Every now and then I come across a book which I think is really worth reading. Whenever this happens I tend to blog about it. Very seldomly I come across a book which I think is a must-read. If you are a regular reader of my blog you will know that the last book which crossed this benchmark was Guy Kawasaki’s “The Art of the Start” - which I consider a definitive must-read for every entrepreneur.

Now Guy’s new book “Reality Check” arrived - and it doesn’t disappoint. “Reality Check” follows an interesting concept - it basically is a collection of ‘essays’ (in lack of a better word) providing battle-proven advice on topics ranging from “The Reality of Starting” via funding, planning & executing, innovation, marketing & sales, hiring & firing to “The Reality of Working” and ends with a chapter on doing good in the world. The individual pieces provide short and precise advice as well as great food for thought - and are either written by Guy (often based on stuff he wrote on his blog before - so if you are intimately familiar with his blog you might find some stuff repetitive) or by co-authors who are authorities on their respective field of work.

The book is an amazing read for every entrepreneur - in Guy’s  own words: “I wanted to provide hardcore information to hardcore people who want to kick ass [...]“. And that’s exactly what it is - so now you have two books to buy: “The Art of the Start” to get your company off the ground and “Reality Check” to kick some serious ass (without the usual bull shiitaki or fuzziness which so many business books share).

And now for the best bit - I have a spare copy of the book which I will give away to a reader of my blog. Just send me an email till Sunday Nov 9th, I will draw a name Monday morning and one of you will get their free copy of Guy’s latest book.

As some of you already know, since a couple of months I am supporting the not-for-profit Participatory Culture Foundation (PCF) and their genius open source media player Miro. The PCF, supported by other non-profit organizations such as Mozilla and a number of individuals (Mitch Kapor or the Rappaport Family to name a few) was created a couple of years ago to promote open and free access to online video content - both from a consumer’s as well as from a producer’s point of view. I strongly believe this is increasingly important as proprietory services such as Apple’s iTunes are limiting the type of content (and thus information) you can consume online.

Why am I telling you all this? Easy - first of all: Download Miro and enjoy a truly great video experience. Secondly - Contact me if you are interested in doing something with Miro; We are really open to all ideas.

And now - have a great weekend and don’t forget to send me an email if you want to hone your pitching skills.

This just in - the Mozilla Labs guys (to be precise: Aza Raskin and Dan Mills) will host a great event alongside Web 2.0 Expo in Berlin (also see my earlier blog post). As there were a few misunderstandings around this event - the event is free, you can hop in and out at any time (you don’t need to spend three days there) and they are really looking forward meeting you (believe me - I just spoke to Aza while visiting the Mozilla HQ in Mountain View). The Labs team also posted an updated agenda on their blog - read it here.

So - why should you care? Easy - Mozilla Labs is at the very forefront of the stuff which is going on in the world of the Internet and especially the browser. Aza and Dan are amazing visionaries with a ton of experience - and are happy to share it. Which makes this event a great opportunity to exchange thoughts, get some fresh perspectives and ideas. And it is only a stone-throw away from the Web 2.0 Expo location.

With Web 2.0 Expo looming ahead of us (to be precise - next Tuesday is kick-off), Aza Raskin from Mozilla Labs just announced that they will host the Mozilla Labs Hack Days alongside the Web 2.0 Expo. Location will be the excellent C-Base, which is just a few minutes to walk from the Web 2.0 Expo location. Sounds like a great event - and an amazing opportunity to talk to the guys behind some of the more interesting innovations in web browsing these days (Geode, Ubiquity, Weave).

And in case you still haven’t got your ticket for Web 2.0 Expo - get a free expo pass with the voucher code webeu08bn5 or 35% off a full pass with the voucher code webeu08gr67.

See you in Berlin!

Update: I just saw that the Labs guys are also in London; on the evening of October 20th they will hold a session at UCL, all infos here (scroll to the middle of the page).

Mozilla, the makers of the wonderful Firefox browser (and many other good things), launched a new community initiative called ‘Impact Mozilla‘ a few days ago.

As many of you know, Mozilla is one of the most active open source initiatives with many thousand contributors who volunteer to work on topics such as development (coding), bug testing, localization and spreading the word (grass-roots marketing). With ‘Impact Mozilla’ the guys at Mozilla headquarter pushed this concept a couple of notches up and into a new direction: ‘Impact Mozilla’ is a contest where Mozilla asks for ideas on how to improve activation (i.e. turning people who download Firefox into people who actually use Firefox). The person with the best idea not only wins $3,000 in price money but also gets the chance to see his idea being put into reality; effectively he will get the budget and the resources to realize his proposal.

Sounds like a good idea? Well, for me this is one of the most interesting initiatives which I have seen in the last year in terms of community involvement: Most open source projects (including Mozilla I assume) might have a strong community on the tech side (as most of the volunteering work is based on writing code or doing other, fairly technical jobs) but lack on the side of marketing, business development, etc. The reason - at least from my perspective - for this lies in the very nature of open source. At the end of the day (ah, I love this phrase - nearly as good as ‘This is so third quarter 1999′… but we are getting side-tracked) open source is something mainly for geeks (this is not meant in a decremental way!) or at least rather tech savvy people. Marketing and Biz Dev monkeys like myself usually have little to contribute - and even if I would like to contribute, I wouldn’t even know where to start. I’m not a coder, I’m not a localizer and bug testing might be something I could do, but have little interest in. But - I have done quite a bit of marketing in my life, thought long and hard about activation problems in numerous jobs and here I have a chance to make a difference for an open source project. With my skills. As a non-coder. Great!

I believe that this is a wonderful opportunity for tons of people out there to stick their teeth into a real-world problem which is not easy to solve. One where a solution could make a huge difference. And one where the winner even gets to implement the solution himself. If you ask me - if I would be still in university, this would be something I would rally a small team together, apply all my theoretical knowledge to and come up with some cool ideas.

Now - how does this make any difference to anyone else but Mozilla? Quite frankly - if you have a startup (which automatically means you are notoriouly short on resources) and have somewhat of a community - Why don’t you go out and try to get your community involved into your business. Who knows what happens and you might find your perfect VP Marketing through something like this.

Impact Mozilla is here.

I just finished reading Van Lindberg’s “Intellectual Property and Open Source: A Practical Guide to Protecting Code” (published at O’Reilly) - an excellent book for everyone interested in the broader topic of IP (intellectual property), the US system of patents, trade marks, trade secrets and copyright and how developing code (not only in an open source environment) fits into this.

As an author Van Lindberg is an odd fish - he is a software engineer and praticing attorney. Which means that you will find a lot of legal principles explained through analogies in coding - which in turn makes them rather easy to understand (if you are a techie that is). The book starts off with some general information about the legal system in the US, gives great explanations on the various topics which are connected to IP (copyrights, patents, etc) and then goes on and explains the very real implications this all has on open source software development (both from an open source project as well as contributor point of view).

What makes this book so relevant for pretty much every startup which develops code or makes use of freely available open source code is the simple fact that it gives you guidelines on what you can and can’t do with your code, how you can protect your code and what to look out for when you deploy open source software. All this can bite you into your backside when you go through a thorough due diligence process with a VC firm in later stage financing rounds. And make no mistake - this book might be written out of a US-law perspective, the underlying fundamentals are valid in pretty much the whole western world.

OStatic recently reviewed the book as well (which was the reason why I went out and bought it) - you’ll find their review here.

John Lilly, Mozilla’s CEO, recently gave a talk at Stanford university about how management works (and happens) in a heavily decentralized organization such as Mozilla. John made the slides from his presentation publicly available on Slideshare - here’s the link and here’s the deck:

Check it out — these are really interesting and entertaining 57 slides. Don’t miss slide 11 and 12 - John proves that you can boast about your achievements without sounding the slightest bit arrogant.

What makes this deck so special though is not the nice way it is layed out, nor is it the fact that John can tell a truly amazing and astonishing story with the whole “rising as phoenix from the ashes” angle around the birth and rise of Firefox; there is actually a tremendous amount of information in the deck which can help any organization in tackling their challenges while growing:

• The innovation and decision making process at Mozilla often happens at the edges of their organization — often by volunteers, not employees. Incorporating this into an organizational model is a massive challenge for an organization. In corporations we see time and time again that employees in the ‘lower ranks’ make very, very valuable suggestions - which don’t make their way up to the decision making levels and thus will never be implemented. I would even go so far and say that Mozilla in this respect is not unlike any large organization - I bet that even an organization such as GE has a ton of innovation happening on their edges, but they don’t excel at the ability to make sure that this innovation actually gets incorporated into the company (not to speak about the fact that decision making certainly doesn’t happen on the edges of an organization).
• The need for communication - I’m sure you heard it times and times again and we all try to live it. But in the end most organizations pretty much fail and we only communicate (internally as well as externally) more or less the bare minimum. Mozilla in contrast is tremendously open with their communication — and pretty much all their communication channels are two-way (Wikis, Blogs, IRC, etc) instead of simple one-way channels (the weekly memo send from the department head to his team).
• On the topic of decision making there is a lot we can learn about the way Mozilla tackles the challenge to have open discourse and participation with the need to actually make decisions (we all know the problem - 10 people discussing from very different points of view: Nothing gets done).

If you don’t have time or the patience to flip through the deck (I guess you then also wouldn’t have read this far anyway), check out slide 54 which summarizes John’s key learnings in 7 simple bullets.

This post is a bit late - nonetheless worth communicating: Since a few weeks I am helping the Miro team with some business development and fund raising in Europe.

In case you haven’t heard about Miro - Miro is a full featured desktop media player, build in an open and free way; licensing the code under an open source license. Miro is developed by the Participatory Culture Foundation (PCF), a non-profit organization with a mission to open media and culture to more people than ever before.

If you care about media (I certainly do), Miro matters - access to content, open standards for producing and distributing content, the ability for everyone to produce content are important in an open society. Miro is a piece of this infrastructure and by definition open and free.

Try Miro for yourself and give me a shout if you want to get involved, have ideas or just want to talk about Miro and the open web in general.

I’m a little late with this one - I know, I know. So let’s not waste any time and jump right into it:

John Lilly, Mozilla’s CEO stated in late November 2007 that Mozilla assumes that Firefox has more than 125 million users. That was in November last year - about 8 months ago. In the meantime Mozilla released version 3 of Firefox to much fanfare - so I guess it is safe to assume that now significantly more than 150 million people all over the world use Firefox (you can download Firefox in about 50 different languages). That’s a global market share north of 20% - more than one in every five human beings on the net uses Firefox.

Now you should understand that Firefox is an open system - you can easily add extensions which do everything from the mundane (like displaying funny pictures) to turning Firefox into something completely different (like creating a kiddy-friendly browser). Extensions can speak to application servers to get things done in the background; they can skin the browser to make Firefox look, feel and behave different and they can interact not only with the web but also with other applications on your computer (take for example FoxyTunes which puts a little iTunes controller into your browser status bar). Firefox extensions are developed using JavaScript and XUL (XML User Interface Language) - which makes them easy to build and maintain (and often doesn’t require a steep learning curve as JavaScript and XML is heavily used in pretty much everything Web 2.0).

Now let’s bring this together:

We have 150m active users who experience the Internet through Firefox - they spend hours every day (!) in Firefox. We have a platform which allows us to build powerful applications (aka extensions) with little effort. We even have a working distribution system (Firefox features extensions in the application and makes it easy to download and install new extensions).

In my eyes this is one of the most amazing business opportunities around - and funny enough one of the least explored. We have tons of discussions about Facebook (even I blogged about it), we speak about OpenSocial and iPhone Apps - there are even VC funds specifically for Facebook and iPhone applications. But we seem to miss the great opportunity which stares us right into the face every time we open our browser.

Still not convinced? StumbleUpon built its business on top of a Firefox and Internet Explorer extension and was sold to eBay for $75m. The StumbleUpon extension was downloaded more than 8 million times according to the Firefox extensions website. The aforementioned FoxyTunes was sold to Yahoo for $20-30m, again FoxyTunes build its business on a Firefox extension. And it was download more than 7 million times…

As always I would love to hear your ideas and opinions - and if you happen to build a business on top of an extension: Let me know.

Here’s an interesting thought - and as it is time for the weekend, I’ll make it short and will elaborate post more on this over the weekend:

With more than 125 million active users (I’ll try to find the correct number over the weekend) and marketshare of more than 30% in a lot of countries and an open interface which allows you to build cool and useful applications on top of the browser, doesn’t Firefox become the new platform and thus a very cool and interesting business opportunity?

As said - this is only a thought provoking teaser - more over the weekend.

Recently the fantastic OStatic blog posted an interesting article about venture funding in the open source space. It is great to see that VCs seem to warm up to open source projects (total spending in Q2 2008 was $115m, up from $101.5m a quarter before) and start to fund them - although it is notoriously hard to fund these projects as often open source projects are more or less a loose structure without a clear ‘ownership’ (which is not meant as in ‘ownership of intellectual property’ but more in the sense of a clearly defined group of people/organization driving the project). Further, the sheer nature of open source often forbids an ownership structure which could possibly work for a VC firm.

Yet, beside these more fundamental topics, it puzzles me that all the funded open source companies are in the area of corporate solutions - rPath does software appliance, Neocleus does virtualization and funambol for example operates in the space of mobile communication. Where are the consumer oriented plays?

First of all I believe it is important to note that there are tons of consumer applications in the open source space - yet a lot of them miss the all important marketing clout which makes them accessible to a wide consumer audience (to speak in our beloved MBA lingua: They haven’t crossed the chasm). The ones which do are few and far apart - top of my head the three projects which jump to mind are Mozilla with Firefox and Thunderbird (which is an obvious one), Songbird (a media player with a focus on music) and Miro (a video player and platform).

Why is that? You would imagine that volunteers should be easier to rally behind a common goal and cause if you set out to provide something in the space of consumer tech (e.g. a better alternative to iTunes rather than something seemingly boring like an alternative to Salesforce.com).

Having said that, this seems to be a large part of the problem: The large enterprise open source projects all have a revenue-generating structure behind them (and are often organized in proper legal entities which make them fundable by venture capital as you can buy and sell shares in them). This makes it significantly easier as it allows the project to establish an infrastructure with people who are paid to run the show, spend (some) money on marketing and PR and so on. The consumer projects mostly lack this infrastructure - which is even more so a problem as they operate in a space where marketing, PR and business development are actually paramount to success (the consumer space is unforgiving - see my post about marketing spend here).

This all strikes me as an interesting challenge - one which cries out for a good, robust, scalable solution. Options could include a publicly funded (through government grants and/or donations) organization which provides marketing, PR and business development capacities as a shared resource to these projects; effectively helping them break through the ‘noise barrier’ of consumer markets. Taking this idea to an even higher level and you could create a fund (again build on top of publicly available financing sources and similar to the funds being setup for Facebook or iPhone apps) which gives out grants to open source projects to help them break into consumer markets.

What is your take on this?

There is currently an interesting development in the wondrous world of browsers - after the dark ages of an Internet Explorer dominated world, the rising of phoenix from the ashes (I’m talking about Firefox here - in case you missed that), Apples foray into the market with their beautifully handcrafted Safari browser and not to forget our long, long active friends from Scandinavia (Opera that is), browsers finally became sexy again. And I’m not talking about the upcoming feature fights between Firefox 3, Internet Explorer 8, Safari 3.1 or Opera 9.5 - I’m talking about browsers developed specifically for niche markets.

There is Flock for the Social Web addict - that is, somehow, a pretty obvious niche. The even more interesting stuff is currently happening in the children’s market - in one corner of the ring we have Glubble, in the other corner we have KidZui. Both take a similar approach (and have received solid financing from the VC community): Take an Open Source browser, modify the browser to make it look more ‘kid-friendly’, create a content portal and hard-code into the browser that users of the browser can only access this portal and pretty much nothing else. This in itself is a pretty smart approach - you create a closed community (much in the way AOL was in its early years) where you control the content. This means that you don’t need to bother on how to filter that search on Google for “Britney Spears naked”. The moment you have the kid on your portal (and she won’t be able to go anywhere else anyway) you can start monetizing them - show them ads, analyze their surfing behavior, have them fill out some questionnaires…

So far so good - I just wonder how much marketing it takes to get to critical mass. As you first need to convince the parents that it’s a good idea that kids should access the web through your browser and then need to entertain a fickle community so that they won’t go screaming to their parents and request a ‘proper’ browser as they can’t access their preferred kiddie TV show’s site.

The interesting niche where I believe this strategy would work, you don’t have tremendous marketing costs (as the users are much less fickle) and there is real money to be made is senior citizens. Why not build a browser which is easy to use for older people (less functionality; large, easy to read buttons, text size increased by default to 150%, etc.), combine it with a useful portal as the default homepage, create a vibrant community around it and off you go.

Think about it - if you go ahead and do it, give me a call.

Our friends over at Mozilla not only make the best browser (seriously - if you haven’t checked out Firefox 3 you are definitely missing something) but also some good, fun marketing stunts:

To celebrate the launch of the upcomming release of Firefox 3 (much anticipated by many) they want to set the world record for most downloads in a single day. Nice one! Read all about it on Jane’s blog or go straight to their landing page.

I just wonder - how many downloads does Microsoft have a day when they release one of their beloved security updates?