Investment in online and offline software

According to Elliot Noss, CEO of Tucows(c/o TalkCrunch) more than half of users now use webmail, I wouldn't be the least bit surprised to find out that many don't even know that they do. When you take into consideration the (non-caching, typically business) users of MS Outlook/Exchange, I would guess that having your email locally is likely to become the exception rather than the rule. So if web-based applications can gain user acceptance, then there are plenty of reasons to argue that most of our desktop applications could migrate to the web over time. But at the same time there is a contrary movement towards people chosing laptops instead of desktops, with "Two in three retail PCs being notebooks". Implicit is that, at least to some extent, users are now more likely to be working without fast access to web-based applications. Whilst some would see the gap between these two situations being bridged with technologies like HSDPA or WiMax, the other option is to "simply" cache the data between the offline and online data stores- as Outlook can. But this makes it MUCH harder to program the application, and more or less impossible (?) for a purely browser based application. I listened to the TalkCrunch podcast "Here Comes Adobe Apollo". Adobe are placing an interesting bet with their Apollo technology to allow a common "Ajaxy" application to work between the offline and online world, but it sounds from this podcast that quite a lot of the detail on database synchronisation is likely to be left to the developer. Taking a slightly different technical approach, today I spotted this "Dojo Offline Toolkit Kicks Off" on Ajaxian. Somehow this sounds cleaner to me, even if it is more restricted. This is clearly a hot area, and therefore I'm sure that there are others working on tools to bridge rich webbased applications with offline use (suggestions please?). My own view is that early-stage VC's and business angels are likely to favour such approaches to building product because:

• Lower development costs (potentially) esp. if cross-platform is important
• Lower support costs (probably)
• More choices on monetisation (ad supported, premium, subscription etc.)
• Improved lock-in; it's going to be hard to get your data out in some cases
• Alternative route(s) to market
• Different exit options

What do you think?

Now universities are Patent Trolls!

Over at TechDirt there's a piece titled:Universities Get Into Patent Trolling Game; Sue Over Bluetooth, the post and comments all suggest, without knowing the context, that a university pursuing IP is fundamentally wrong. I don't think this issue is quite so simple, not just because Bluetooth was pretty groundbreaking and I wouldn't be the least bit surprised to find out there's some inventive stuff in it, but also because of the implied alternative. From time-to-time it's suggested that Universities should put all their IP in the public domain, but my own experience is that this has proved to help no-one. The stuff Universities tend to brew is usually very early stage and needs loads of further R&D to be proved, let alone turned into products. If no-one sees a way of getting some return for the work, then in my experience they really wont spend the dollars to do so. A few years ago I tried to get a piece of really clever radio-frequency technology developed, unfortunately it's origin meant that all the major telecom companies could get equal rights to the core patent. The result was that we couldn't get a commercial position to do the research needed to find out if it would really work.

So patents are evil are they?

Scarcely a week goes by without some story emerging of a failed technology company pressing to extract money from others on the grounds of their "infringed intellectual property". The latest example being: Company Gets Patent On Digital Downloads; Sues Everyone. I often take a look at the actual patent issued in these cases, after all most of our investees are looking to make money from their IP. Although the blogosphere generally treats such stories with loud cries that amount to patents being evil, as someone who backs entrepreneurs, inventors and tiny start-up companies I can see the benefits of having a strong patent system. When you look closely you often find that there is a nugget of truth in the claimants case: after all, how do you tell the difference between an inventor/start-up which has been trampled on by it's competitors paying no attention to its genuine innovations, or a "patent troll". However, in this case I have to say the claim 1 seems outrageous to me as I seem to recall that such things were being widely discussed before the September 2001 filing date:

1. A system for managing and marketing digital media content supplied by a plurality of media content suppliers to a plurality of consumers, the system comprising: a processor operable to combine media assets supplied by the media content suppliers and metadata to create a media content offering for use by the consumers said processor having a private service interface adapted to permit the media content suppliers to directly access the system to administer the media content offering; a database for storing the media content offering; a file repository for storing media content associated with the media content offering; and a server adapted to distribute media content stored in said file repository.

A quick check on Wikipedia suggests that "The big record companies were apprehensive to license their catalogs to outside companies and refused the late 90's requests of MP3.com, Cductive and eMusic (then called Goodnoise) to sell digital song downloads.".

Opensource Business-Model Guru?

I'm really interested in some of the hybrid business models being pursued in the US, where code is licensed under both something like the GPL, and also on a commercial licence in parallel for those that need it. It seems to me that there's a challenging line to draw between being too commercial to be accepted and to build a community, and between limiting your upside by going down the support model. However, in the UK Open-Source businesses do not (as far as I can find) succeed in raising Venture Capital, unlike the US (I'd be delighted to be shown how ignorant I am on that!) I've been trying, without luck so far, to track down someone in the UK who really understands these models as it's applicable to a number of our current and potential invstees- please let me know if you know anyone.

Technology, Component or System: Plastic Logic raises $100m

Alarm:Clock is reporting that Plastic Logic have raised a $100m round. They've taken the ambitious switch up from providing just the backplane (a few $10 in value) to the whole display (maybe $100) and are setting up a production line. This raises a general issue that crops up again and again with technology companies, do you license a pure technology, do you develop a component, or do you develop the whole system. Cynically, I think the answer is often that you start off doing whichever you can get backing from investors to pursue- and that can be as much fashion as anything else, but the key is to keep the other routes open until you're sufficiently far down the line as you can choose- hopefully that's where Plastic Logic are now! Good luck to them.

What is the relevance of fund life?

Over at AskTheVC there's a useful post on "What Is The Relevance of Life Terms of VC Funds?". This reflects on a comment made to me by a one of the largest European Tech specialist VC's the other day. I was told that although his fund had closed only recently they had already lined up the fundamental materials/basic technology investments for that new fund and they would make up their first year or two's activity on the 10 year fund due to the long "time to realisation" of this kind of work. They were looking then to move on to investments that were more software orientated for years 3-5 of the fund as these are "further up the stack", and therefore had a shorter exit timeframe. This is a rather stark position, but I suspect it's not too different from most funds, and well worth bearing this in mind if you're approaching investors.

Kiva- smaller scale investment!

I just heard on a podcast from VentureVoice about Kiva, a web-based microlending not-for-profit service- if that isn't too much of a mouthful! I've made a tiny loan to a farmer in Africa to see what happens, if it works well I'll probably do more of these. She needs to raise another £300 so you might like to join me supporting GRACE WANJIRU MUNGAI. Thanks. Update I just had my first repayment of a loan; it's kind of funny feeling in that you know that it's good, and that you will re-lend the money again, but on the other hand you really hope the borrower can afford it!