All posts by Carlos Eduardo

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Economic Incentives for Change

I was having a coffee chat with a friend of mine recently about how some environmental changes aren’t happening fast enough because the motivations to do so are perhaps not as aligned with short-term public & commercial benefit. It was one of those fun conversations where lots of ideas were thrown around.

One that came up, however, while we were on the subject of how to improve the climatogolical decline we are suffering, was on how to help reduce carbon emissions from airplanes.

During our discussion, we figured that if we could reduce fuel consumption on airplanes, that would be a great place to start for slowing down climate change. Armed with the knowledge that hybrid airplanes are under development, we discussed: what if you could incentivize the faster development and use of hybrid airplanes that would consume less fuel, and make their adoption attractive to leading airlines?

The economic incentive idea, perhaps completely nuts, was as follows:

Some large airports have hours where they are not allowed to operate because of how they affect the noise of the neighborhoods where airplanes fly over. If these airports, with the permission of collaborating local authority or government, were to auction off, right now, the rights for airplanes to land on the airport during those off-hours, provided that the take-off and landing and flight through an agreed circumference & altitude from airport was done entirely silently through electric engines, and even if once they cleared the minimum circumference/altitude, they switched back to regular fuel power. We figured that by only having to be electric during this critical time, we would make it easier for this innovation to come faster because by not having to be fully electric, battery size and required stored energy could be reduced to only that which is necessary for approach, landing, and takeoff.

That change would allow many airlines to increase flight capacity on those airports without having to wait for the airport to build additional runways or violate noise & pollution levels (the airport authority would benefit financially as well, of course). Although this program would start ’now’, it would slowly become mandatory over time by steadily increasing the hours of operation where only hybrid planes could land and take off, that way, in the future, legacy fuel-only airplanes could still land/takeoff, but would be restricted to only a few hours a day of operation once the program was well underway.

The net effect, should this work, would be that the airlines (hopefully) through the economic incentive of being able to double revenues for arrivals and departures to specific high-margin city airports, would buy more of these airplanes, but also that engine & fuselage manufacturers would come up with creative ways to retrofit these types of hybrid solutions to existing fleets for them to take advantage of the economic benefits afforded by this program.

Since likely no one from the airline industry will read this (or will they?) the takeaway from the chat, for me at least, was to think creatively about how to take insurmountable problems and and create behavioural change through economic incentives that play into the interests of all parties.

Disclaimer Neither my friend nor I are specialists in the airline industry or have any connection with it. This blog post is just an example of crafting economic incentives for change. I don’t know if this idea is even legally or technically possible, or if there are any other limitations other than noise in allowing this to be approved by airport regulatory agencies. I further appreciate that if it were not possible for local authorities to make the necessary change in expansion of hours, then this idea would likely not work, but then, again, we’d just brainstorm up another one!

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On the Pebble Steel and the wearables market in general – Dated July 26rd, 2014

I’ve never put a date on a blog post title before, but I expect to look back on this post 5 years from now and laugh at how much I got right or how much I got wrong, either way, I do believe 100% that we are in the very beginnings of a very exciting time, as were the words of Tank in the Matrix when talking about Neo.

On killer “use cases”

About two weeks ago, we hosted a hackathon at Seedcamp on life-logging, and explored different ways people could quantify their lives either through apps directly (using the hardware on your phone to track, ala ‘Moves’) or wearables hardware that is tracking and providing information in a way that can feedback into an app (Android Wear, Pebble, Fitbit, Jawbone, Shine, etc).

My conclusion after the event is that we still don’t know how this sector will play out and what the ‘killer use case’ will be for the mass market.

However, if I take myself as an early adopter, I can clearly say that I’ve found ‘a’ killer use case’ which is to migrate notifications off the phone screen and onto my wrist, the way a watch moved time from the pocket watch to the wrist. 

This transition from phone to wrist alone has been quite liberating allowing me to have my phone charging in a different room and never lose track of messages (FB, Whatsapp, Telegram, SMS, calendars, etc) or calls during the time it is charging. Socially, it also allows me to leave my phone unattended because I don’t need to worry that I will not hear the call or message or feel the vibration amidst the noise of wherever I may be. Lastly, viewing messages is less disruptive and far faster than taking phone out of pocket, typing in unlock code, swiping and going into the app with the actual message. 

As such, I believe while we still have a lot of room for improvement, wearables will slowly become part of our passive consciousness (you feel notifications and react by type) vs. the current active engagement model (people in a room all looking at their phone).

So what about the current crop of devices? 

Well.. lets start with what I have.. a Pebble Steel

On my wrist, I currently have a Pebble Steel. I love it. Why do I love it?

1) It has a good enough battery life of 5-7 days (arguably ‘amazing’ relative to its competitors 1-2 days)
2) It is visible in every condition, bright sunlight or night.
3) It is simple & doesn’t try to be a gadget-laden watch with everything in it and failing at all.
4) It relies on hardware buttons to take input. This is important because you can take action without looking at the screen (you memorize what buttons do what and you can turn off an alarm or reject a call without having to touch the right part of the screen).
5) It has a rich ecosystem of apps – although some of the apps are completely over-extending what I think smartwatches should be/do.
6) It is ‘rugged’ – you can actually swim with it and get it dirty in a way that the current generation of competitors cannot.

As for Android Wear devices, for sure the Moto360 looks amazing, but it’s just ‘too much’. I don’t want poor battery life or to have to talk to ANY of my gadgets (I can’t imagine giving my watch commands in the notoriously quiet of conversation British public transportation system, for example. awkward.)… I take that back, when they hit sentience, then ok I might (because we can have a chat or something), but until then, manual input over touch is preferred as is waterproofing that allows you to enjoy life!

What could improve?

Well…. for one, design will always be an evolution. On the hardware side, the Pebble Steel is not bad, but its non-standard strap connector is a nuisance, its asymmetrical logo placement is less the pretty, and its screen could improve its resolution so that curved fonts didn’t look pixelated (although its not ‘bad’, just not ‘great’). Any improvements in battery life would be appreciated, but frankly, charging once a week or at worst every 5 days is no bother.

On tje software side, the Pebble App and App store could really use a speed bump when scrolling through apps, a better method of curation than just ‘search’ which usually shows very little, and better integration with the devices/apps it supports (although, can’t blame Pebble, it’s an iOS or Android issue).

How do I see this playing out in the future?

I see the major electronic hardware players (Apple/Samsung) coming out with some compelling products that track many things (health, other hardware bits, cars, etc) and provide you with quite a bit of data. However, I see the old-school Swiss manufacturers partnering with the likes of Pebble or other smartwatch platform to create an ecosystem of apps running on hardware that still allows a group of people to have the heirloom that the watch has become.

It is an exciting time indeed.

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Brand Tourism & Attention to Details

As a hobby, one thing I love to do when I travel is visit commercial establishments (be it coffee shops, stores, services, etc) that have excellent brand consistency. I call this ‘brand tourism’.

What I mean by brand consistency is where you get a feeling, as a customer, that every detail is thought through to reflect the values and vision of the founders. The more attention to detail, the more I enjoy the brand tourism experience.

This attention to detail typically includes how products are created/selected, how customer service is, and how people experience your product or service (packaging or locale).

To give you two visual examples of places in San Fran that I really enjoy for their visual attention to detail and store brand consistency, check out these two photo stories I made -

Taylor Stitch – A clothing store that has a very San Fran Hipster feel to it. - http://stories.iconografi.co/taylor-stitch

Four Barrel Coffee – Although these days the experience is perhaps slipping according to a few due to the popularity it has, its decor and how they hire staff has been very good. - http://stories.iconografi.co/four-barrel-coffee

I’ve chosen to share physical locations as examples (vs. apps) because they can set a good example upon which to base software products. Around San Fran there are several other really good example.. The Mission Workshop bags store and Triple Aught Design store to name a few others.

So, as you think about building out your website, imagery, icons, etc, ask yourself, am I making my brand consistent across all aspects and details of what I do?

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The Top Ten Fundraising Fails

Fundraising isn’t easy, even if done well, its fraught with all sorts of ambiguity and frustrations. To that very point, I recently wrote a blog post about the fundraising mindset in order to help you set a tone on approaching the process.

That said, there are things you can do to make it go better than others and things you can do to make it go worse… and in the spirit of the ‘Tonight Show’s’ top ten list, below are my top ten things that will likely cause a fundraising fail situation.

Avoid them and learn from your mistakes and you will increase your likelihood of success.

- 10 – Presenting with a style that doesn’t capture the right attention.

Yes, being over the top and dropping ‘f bombs’ might get you attention, but is it the right attention? Is it focusing the attention on what your message or just you? Also, what about a boring slide deck? Or a a deck that is missing product shots? Do these represent you well? What if you say your product is simple, but then your deck is really over complicated.. does that sound right?

 
- 9 – Not having a proper fundraising plan

Fundraising requires research. Find out if your potential investors are even interested in your sector.. have they invested in your competitor? What amount do they typically invest in? Going to someone that is a late stage investor when you are raising a little bit of money is like putting in a minimum order of 10 pizzas when you can only eat one.

 
- 8 – Not understanding your customer and how to reach them

When presenting or speaking about your customer, do you show a mastery about their issues? Do you understand what makes them tick and why your solution is the one that will likely best serve their needs? Do you also understand how to reach them? Where do they shop? What media do they consume?

 
- 7 – Unable to demonstrate a real pain for your customer (and how your solution fixes it)

It is always tempting to create something that is useful to you, but is the solution you’ve created really a necessity or just a nice-to-have? Demonstrating a real pain, usually through some form of customer validation, is crucial in making a convincing argument for your startup.

 
- 6 – Assuming that a general market size study applies to your startup

One of the things you can do to quickly show that you don’t have a full grasp of your market is by showing a much larger segment than the one you operate in.  For example, I’ve seen pitches where an iOS app that is for sports tracking, mentions all mobile users worldwide as their market size… when actually, its more like mobile-sports-tracking-enthusiasts, which is a sub-segment of that bigger pie.

 
- 5 – Not truly understanding who your competitors are

This one is easy. If you think you don’t have competitors, then you probably haven’t researched hard enough. Rarely are there ideas that no one has thought about, but secondly and perhaps more importantly, sometimes there are substitutes which are ‘good enough’ which you need to be aware of and show how your solution overcomes the momentum that those existing solutions already have.

 
- 4 – Not knowing your cash needs & cash burn

If you’re going fundraising and you don’t know how much money you need, how long it will take you, to achieve what, and how you will spend it… well, then don’t fault investors if they aren’t impressed with your request for investment.

 
- 3 – Not explaining why your team is the team that will make this happen

Your team is 99% the reason why your company succeeds, and the idea is probably like 1% (I’m guessing on the numbers, but this guess feels right). If you skim through the ‘why’ of why your team is the right one for this investment, then you’ll likely miss an opportunity to impress an investor. I recently wrote a blog post about how to best think through your team slide here. Also, if you want to learn about how an investor evaluates your team, read this one.

 
- 2 – Having your existing investor shareholders own more equity than the founders

Toxic rounds that precede the round you are raising for can really negatively affect your fundraising plan. Read about why here. In general, try and make sure that you take investments that don’t jeopardize your future ability to raise follow-on funds.

 
- 1 – Not reaching out to an investor through an introduction

Lastly, the best thing you can do for yourself is get an introduction to investors that you want to meet. Introductions are great ways to have immediate validation. Here are some other ideas on how to reach out to other investors.

 
- Bonus – Not learning from your mistakes

Learn from your mistakes. You will make many, and that’s OK, so long as you don’t beat yourself up, understand what went wrong, and then iterate on it. In the words of Einstein – “Insanity is doing the same thing over and over and expecting different results.”

Below is the slide deck that I used to present at Google Campus’s Fundraising Day.