Author

I am Joannes Vermorel, founder at Lokad. I am also an engineer from the Corps des Mines who initially graduated from the ENS.

I have been passionate about computer science, software matters and data mining for almost two decades. (RSS - ATOM)

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Tuesday
Apr212009

## Startup Class '07 and '08 at Telecom ParisTech

In my previous post if been detailing 9 steps to make sure your startup exists. Inspired by an initial idea of Chris Exline, I decided to make a small survey of the startups admitted at the Incubator of Telecom ParisTech in 2007 and 2008 (startups are hosted 18 months by the incubator, and then kicked-out, that's the rule).

To figure out how well the startups of the incubator were doing, I came up with a simple score the startup websites.

Survival test for startup websites:

• +2 if look & fell is GOOD.

• +1 if look & fell is just OK (zero if horrid).

• +2 if benefits of product or service is clear.

• +1 if I must struggle to figure out the benefits.
(zero if I am still clueless about benefits after struggling)

• +1 if there is no happy talk

• +1 if PageRank is greater than 3 for a B2B company.

• +1 if PageRank is greater than 5 for a B2C company.

• +1 if there is an English version.

• +1 if people can buy or consume right away.

• +1 if there are news.

• +1 if there are forums.

The maximal score for this test is 10. One can argue that this test is very subjective. Frankly, after reviewing 50 companies, I rather think otherwise.

Any website with a decent, professional looking is ranked as GOOD with 2 points - no need for flashy graphics, decent is enough. In the other hand, if the website feels amateurish (colors messed-up, random layout) but still functional, then it's OK, you get 1 point. If the website is utterly broken in design or in navigation, then it's zero point.

Same for the benefits. If I can get a rough idea, in less than a minute, of the added-value of your company, then you get 2 points. I mean no need for detailed ideas, big picture is enough. If I have to struggle for 5 mins to finally guess what could be your added value, then it's 1 point. If after 5 mins, I am still utterly clueless, then it's zero point.

Concerning the PageRank, I am putting a much lower threshold for B2B website, because those folks typically need 100x times less customers than B2C companies to be profitable.

Not having a English version is like shooting yourself a bullet in your feet. The French market is small, so small, compared to USA+UK+Canada+India+Australia. To get 1 point here, you don't need to have translated everything in English, any portion that makes sense is enough.

In my opinion:

• any 6 months old startup should get at least 6/10.

• any 18 months old startup should get 9/10.

I have collected raw data for 52 startups within a Google Spreadsheet, and here are the results at present date 2009-04-21.

Disclaimer: I have a strong bias toward Lokad since it's my own company so it was removed from the study.

 07 class9 DisMoiOù9 Lingueo8 Connecthings8 Helia8 La Cartoonerie8 LivePepper8 Netineo8 PREXENS8 Teacheo7 FrenchSet6 Adminext6 EtherTrust6 InovaCours6 Tellus5 FamilyBy5 Adipsys5 Lixys4 Needer3 Connect and Go3 Patent Organizer Software3 Nexess2 MobiNear1 Alphacode1 Système Polaire0 TakysAverage score: 5.5 '08 Class9 OOdesk8 Accessif8 Haploid8 Hellocoton8 PlayAdz7 CapAngel7 Jaxio7 OhMyMode6 Ecce Vino6 Quelle Energie6 Actimos6 Kwaga5 Ineovation4 Eyes Triple Shut4 Hedera Technology4 Plugnsurf3 Absysseo3 Aquilant Technologies3 Faveod3 The Metrics Factory2 FI Technologies2 Media Mobility2 nYouLinK2 SeQureNetAverage score: 5.3

To be honest, those results look rather poor to me.

• Two thirds of those startups don't offer any chance to their customer to buy or consume the product or service online.

• Roughly one third of those startups are not able to express the benefits they could bring to their customers.

• More than half of the startups can't get even a limited English version of their website.

Moreover, startups do not improve much over time. Considering 2007 vs 2008, if feel like if there were two categories of startups:

• the ones that got a good website right from the start.

• the ones that will never get a good one.

Yet, my own experience told me it's so obviously not true. Just have a look at the first version of the Lokad website and compare with the current one. Granted, I am still far from what Branding Geniuses could produce, but still.

I would be interested to see how other incubators are doing on their own.

Saturday
Apr182009

## 9 steps to make sure your startup exists

My uISV isn't even remotely an audience based business - we are on a narrow B2B segment - but since the very beginning, I have invested a lot of efforts to get a decent online presence. So far, every effort that I have pushed to strengthen the online presence was very significantly rewarded. Every week or so, excellent news just pop out of nowhere:

• A consulting group wants to add the product to its portfolio.

• A customer sends you a detailed spec of what you should be doing instead, and it happens to be really smart suggestions.

• A large company wants to know if your product scales up to 1 zillion users, because they are considering buying a zillion licenses.

Nearly one year ago, I had the chance to get my own uISV admitted at the Startup Incubator of Telecom ParisTech. An incubator is a nice place to meet other people that are facing roughly the same sort of problems that you have. To my great surprise, most startups have poor online presence, and even more surprising, most investors seem to have no clue about online presence either.

It's not clear how much it hurts the business; but in my opinion your online presence is the only tangible proof of your company existence for all people who do not happens to be within a 20km radius of your office.

Thus, here are my 9 steps to make sure the company has an online presence:

1. No stealth-mode crap, get online, no excuse.

2. Look & feel should be decent.

3. Customer benefits come first.

4. Happy talk has no place on your site.

5. Decent Google PageRank is required.

6. English is required.

7. Public pricing is required.

8. Blog is required.

9. Community feedback should be possible.

1. No stealth-mode crap, get online, no excuse
People tend to think too much good of their own ideas. Ideas matters little while execution is everything. Remember that Google was half-a-decade late in the search engine race; idem with Facebook for social networking websites. Stealth development is a game for big players who can sustain years of R&D expenses with no visible returns and then inject millions in marketing once the technology is ready.

2. Look & feel should be decent
Unless you happen to be a graphic designer, don't even try to skin your website yourself: it will look awfully amateurish and turn your customers away. For $100 or less you can get a nice website template. It might not be unique, but it does not matter. There are so many templates available anyway, that 99.99% of your visitors won't even notice that aspect. In 2009, there is no more excuse to have a half-backed website skin. 3. Customer benefits come first If your visitors can't figure out the benefits of your technology / product / service, why should they actually care about the way it's designed? Many startup fails at actually explain the value of what they are offering, and strongly focus on random technical aspects that happened to be a challenge for the development team. 4. Happy talk has no place on your site Happy talk is an easy way to fill your website. Ever considered putting a Welcome on our website sentence in your front page? Well, don't. Also, for B2B company, happy talk usually happens with (slightly) more subtle verbiage such as mindless mission statements: our mission is to serve our customer's interests. Make sure that every single word that you put on your website carry a valuable message. If it doesn't, delete the word. 5. Decent Google PageRank is required Ever googled a company name to end up on the Facebook page of an employee? Well, that sort of things happens when your Google PageRank is just too low. More generally, a decent PageRank ensures that if somebody does a deep market research, your company will appears. I am not even talking about grabbing thousands of visitors through top SERP on strategic keywords; I am just considering the journalist / student / consultant / ... who is trying to figure out all the players of your business niche. If this person can't find you, then you don't exist. 6. English is required If you happen to be a native English speaker, that one isn't going to be too hard for you. For the rest of us, well, we have to make the effort to get it done nonetheless. The harsh reality is that through English, you can reach roughly 10x more people than what you can through any other languages. It's doesn't mean that you can't do other languages, but English should be a primary focus. 7. Public pricing is required It's always a bit puzzling to me to notice how people are usually reluctant to display any pricing on their website - especially on B2B websites. Yet, pricing is a vital information for your customers. Software or services can be priced from$1 / month to \$10 million / month. Where do you stand? This concern stays valid even for beta products. Displaying a price is a very good signal for your customers: it tells them that you are a real company with a real product under way. Without pricing, you're simply not part of the economic circuit.

8. Blog is required
A company can be long dead while the website is still up and running. Providing some news - any news, anywhere on the website - as long the dates are visible, is the most simple way to prove to your visitors that the company is still up and running. Having a blog, and posting at least once a month is probably the easiest to complete this step. Blogs are dirty cheap and dead simple, no excuse will be considered for not having a blog.

9. Community feedback should be possible
I found that it's always very frustrating not being able to provide feedback about a product, a website, a service whatever. Granted, most web visitors are never giving any feedback, but some are doing it all the time. The feedback provided by those users is gold. Don't neglect your community when setting-up web forums is just a matter of hours. Your forums are likely to have a slow profile, but in my experience, the few early feedbacks that you get can actually make a difference in your business. You should not miss that sort of opportunity.

As a final word, I have already started to collect some data about the '07 and '08 classes of the incubator of Telecom ParisTech. Stay tuned.

Thursday
Apr022009

## In praise of Voices.com

I have been a long time consumer of freelance marketplaces. Yet, all the freelance websites that I have experienced so far left me a feeling of half-backed design. Guru, oDesk, eLance, rentacoder, just to name a few of them.

The heart of the problem lies in the doomed attempts at supporting any type of freelance jobs with a unique web application.

In contrast, voices.com has a unique focus on voice talents. You won't find database administrators or supply chain consultants on voices.com; but when it comes to voice-over jobs, the application is just plain great.

Basically, like any other freelance website, you post your job - including your scripts since it's a voice over job - and within hours you get dozen of freelance offers. So far, so good, all other freelance websites are doing that.

Yet, the killing feature of voices.com is that each freelancer gives you a 30s record of their own voice over your scripts.

And this feature is plain amazing. Instead of wasting hours making desperate attempts at sorting out true talent out of the massive amount of junk proposals, you just listen to your 30s samples, which precisely happens to be the rational way to take your decision.

And the best thing is that since voice.com is putting a strong emphasis on talent through this very feature, you're getting virtually no junk proposal at all. Among the 30 proposals that I have been getting yesterday in less than 6h, most of them were very good, and a few of them, plain excellent.

Not believing me? Just check the very nice job that Ray Grover did for us within a 6h timeframe from job posting to job termination.

Saturday
Dec222007

## Hard times ahead for shopping cart providers

Since my μIVS is providing sales forecasting services for eCommerce, I have been spending a considerable amount of time reviewing the market of eCommerce frameworks and providers. I did come up with a few conclusions that may be of interest for people considering developing business in this area.

The first shocking element when I did start to review the online shopping cart market is the insane amount of competing software solutions. Based on my own market survey, I roughly estimate that the market includes roughly 1000 companies actually trying to provide shopping cart solutions of some sort. More over, in 2007, there was almost one major entrant per month in this market. Microsoft is, most probably, planning to make its own entrance through Microsoft Office Live in 2008.

One can argue that the eCommerce market needs a large amount of specialized solutions to fit all the market niches. But I think the reality is quite the opposite: the best shopping carts are the ones that stick to the mainstream design. As a result, most shopping carts provide nearly identical features : catalog management, check-out process, payment provider integration, ... I can't think of any other software area with so many competitors providing nearly identical products.

I see a few reasons that could probably explain such a situation

• designing some (naive) e-commerce solution is easy, and can be done in 3 months by an experienced programmer. In addition, there are plenty of open source software packages to get you inspired.

• getting your first ten customers is relatively easy. Just prospect your neighborhood, and you will probably find a few retailers that would accept to get an online front-end for their existing business.

• e-commerce is hype and all major media are promising a huge business growth for online transactions in the next few years.

Yet, all those positive elements seem seriously flawed to me. Although, a minimal shopping cart can be designed in 3 months, a practical one needs to support virtually all payment providers and all shipping providers (and probably many accounting, ERP solutions as well, if you wish to catch successful e-commerce owners) . And then, it's not any more a 3 months project, but requires some major development efforts.

Then, as getting your first few customers might be (relatively) easy, because you can leverage your immediate neighborhoods, this approach does not scale at all. Considering the decreasing costs of the e-commerce hosting, I don't think that any e-commerce provider business will be sustainable within a few years with less than a couple of thousands of customers. In order to scale-up on such a market, you need a huge online presence, that will drive huge amount of customers to your website. But considering that most e-commerce provider websites already have a Google PageRank of 7 or above (osCommerce has 8 ), competition is clearly super-tough in this area.

Finally, although the e-commerce market is promised to grow, I suspect that most of the growth of the retail activity is going to be absorbed by a few hundred companies. Beside those leading online retailers, there will probably be some room for a few thousands online retailers operating in niches. Even if we assume that the web can sustain 100.000 profitable web shops worldwide (which looks already quite an optimistic estimate to me), it clearly won't sustain the 1.000 shopping cart providers that currently exists. Thus, I would expect 90% of those companies to either disappear or merge in the next decade. Since it does not cost much to maintain an online business, the process can be quite slow though.

Finally, if the shopping cart software itself may have been an issue in the past to create an online store, it is not anymore (unless you have to deal with millions of customers, because most e-commerce solutions don't scale, but very few online businesses end up with such issues). And the amount of money that needs to be invested in the e-commerce software is now ridiculously low compared to the other - non software related - areas such as creating textual content and marketing.

Friday
Jan052007

## Missing time-series vs. Empty time-series

Lokad is about time-series forecasting, but as simple as the time-series model may seem to be (after all a time-series is nothing more than a list of time-value pairs), there are several subtleties in the way to manage time-series. In this post, we will see how the Lokad time-series model distinguishes missing time-value pairs from empty time-value pairs. Since the topic is slightly complex, I would suggest, if you're not familiar the Lokad technology, to have a look at our User Guide (in particular, the Forecasting tasks section).

### A practical situation

Let's start with a practical real-life situation; let's assume that we have a time-series that include 12 time-values, one value for each month of the year 2005 (starting January 2005, ending December 2005). We can imagine that this time-series represent the monthly sales of a web shop. At the time I am writing this post, it's the beginning of January 2007. What happen if I insert now this time-series into my Lokad account and ask for a monthly forecast? Well, there is an ambiguity in the time-series model, because there would be two possibilities:

• Returning a forecast for January 2007 (let's call it the clock-centric approach). In this case, we would be considering the 12 values for the year 2006 are simply missing. Thus, we skip them a produce a forecast nonetheless but based on the data of the year 2005.

• Returning a forecast for January 2006 (let's call it the data-centric approach): The forecast is based on the last time-value pair available (i.e. December 2005 in the present situation), which is equivalent to the assumption that there is no missing values. In this case, the delivered forecast might refer to a period already part of the past.

Let's make the things clear: Lokad has chosen the data-centric approach, if ask a monthly forecast for your 12 time-values ranging from January 2005 to December 2005, you will get a forecast for January 2006, no matter if you request the forecast at the beginning of 2006 or in a distant future. Lokad takes the last time-value pair of your time-series as a reference to compute the forecasts. This option has been chosen because we believe it's closer to the business requirements.

### Some arguments supporting the data-centric approach

Let's review the arguments in favor of the data-centric approach:

• The data-centric approach has a persistent semantic. If the input time-series data do not change the forecast time-range do not either (yet the actual values of the forecast may change over time ).

• The data-centric approach offers the possibility to benchmark the Lokad forecast services. You can import your 2005 product sales data in your Lokad account, get the forecast for 2006, and see how much difference lies between our forecasts and your historical record for 2006.

• The data-centric approach assumes that there is no missing data in your time-series data after the initial time-value pair. This assumption has the strong advantage: its simplicity. Indeed, in some data mining fields, missing data are very frequent (think medical surveys for example), but when it comes to time-series, it's quite rare.

Yet, this approach involves a minor drawback: you need to handle explicitly the lack of data. For example, in the previous web shop situation, each product of the catalog may not have be sold even once a month. In such case, you must explicitly add a zero time-value in your time-series that represent this lack of sales.

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