The amount of capital funneled into Research and Development (R&D) by U.S. based tech companies is simply staggering.
Amazon takes the cake with a reportedly $13.3 billion annual spending on R&D—and while big, Amazon is only one company—so aggregate the total amount spent annually and you’re talking GDP of a small European country.
It is a given that R&D for proprietary software means progress, and progress is key to our lives, and certain industries lend themselves to more secure, proprietary software to fit their operational needs i.e. machine learning and artificial intelligence. Let’s take a quick look at Enterprise Resource Planning (ERP), the software systems key to the running of many SME’s.
ERP systems combine business information from multiple divisions of a business into a single software program. Some benefits include better real-time information, reduced redundancy in resource sharing, and a more efficient work environment as a whole. Of ERP service providers, SAP is a leader with its Business Software Solutions pack. Companies shell out absurdly large amounts of money given the advantages of customization that SAP brings to any given industry. This then get passed onto consumers as the economic food chain states, costing people an arm and a leg for seemingly marginal gain. You have to ask yourself: is there a better solution?
Open Source: software that has it’s source code freely available to anyone on the Internet to download. You can usually find open source counterparts to proprietary software packages for free or next to nothing. But, how does it measure in terms of support, bug fixes, security, quality of code, product stability, etc? These are valid questions which you should consider.
The answer?… It depends. When comparing support and bug fixes, there is some open source software that is far better than its closed source counterparts, and others that fall short. When comparing quality of code, the answer again is– it depends. At least that’s what Coverity Senior Director of Product Development said in 2013, after Coverity launched an Open Source Report which detailed the analysis of 750 million lines of open source software code. Coverity’s Open Source report also analyzed code from over 700 open source C/C++ projects, in addition to anonymous enterprise projects. Their key findings suggest open source software outpaces proprietary in terms of code quality. Point being, marginal improvements in terms of quality and service offered by proprietary ERP’s aren’t worth the exorbitant price differentiation.
If your company needs an office suite, why give MSFT your hard earned money, when Sun’s Open Office will do the job fine? Both French and Norwegian governments already use it. If you need VBA for those extraordinarily fun financial models, Open Office has BASIC. It’s essentially the same thing, albeit a few commands that any VBA programmer can pick up in a heartbeat.
The same goes for ERP. While SAP is a global magnate that can be customized to meet your specific needs, so can its commercial open source counterparts, namely Sugar CRM, xTuple, and Compiere (oh, and Salesforce of course). These alternatives offer the same advantages without shelling out on average $4,000 per user. Here’s the thing, ERP implementation is resource intensive, and no matter where you look it’s not cheap. But with open source you’re not putting up front the types of fees associated with a proprietary ERP system. Not to mention, with proprietary ERM software a SME may end up having to pay additional licensing or customization fees.
This cost-benefit analysis even extends to entertainment software, such as OGRE a 3D open source graphics engine and physics simulator, and can even be seen in OS’ like OS X that are in part free BSD. Furthermore, the more people that use open source, the more money will be funneled towards its innovation, leading to a win-win for pretty much everyone. And if I remember correctly from business school, we all want to achieve win-win situations.
Simply put, many startups, SME’s and even mature organizations often forego open source for proprietary software. This is because they lack the knowledge of what it can offer them and the savings that it can bring. According to a 2016 Forrester Research Survey, there is still slow adoption of open-source software, primarily due to safety concerns. And many software developers often dismiss the importance of open source products in enterprises for just that reason. This is pretty ironic considering that even the most proprietary software includes open-source technology inside. But let’s be reasonable, people. Open source is the way to go, in today’s fast-changing world businesses need to be flexible and adhere to a tight budget.
I’m curious, however, to hear your thoughts. Drop a line and if you like this article, be sure to sign up to our newsletter where you’ll receive thoughtful news on tech once a week.
Without doubt you’ve got your business idea and you think that it’s the hottest thing since sliced bread. You’re already envisioning yourself on the cover of Time and The Economist. Then the paranoia starts taking over, and you start thinking that you need to be hush hush about it. You have your wife or girlfriend sign a NDA, and install motion sensors and cameras outside your office.
Ok, maybe not that paranoid, but one of the major mistakes start-uppers make is keeping their idea to themselves or only telling a few close family members. Why do we say this?
But let’s say you did reinvent the wheel, and your product actually is hotter than sliced bread. What now? Following these rules ought to keep your business yours and the lawyers happily notarizing papers instead of preparing for litigation.
Have any additional tips for us regarding IP protection. Let us know!
Everything you do should create value.
When deciding to venture down the road of entrepreneurship, many people will tell you that you need to define a problem, attack the problem, and of course provide a solution in order to develop a viable product.
Some, or really most advocates of this theory, will transfer some form of knowledge in problem identification onto armies of wide eyed wannabe entrepreneurs. I wish they’d stop, because it’s phony, shenanigans and quite frankly bollocks.
Why? Two reasons. Some of the most innovative products (and mind you not all) don’t solve problems, they provide value instead. By looking first at problem identification, you limit yourself to the scope of what’s already out there. This effectively blocks you from making something completely new, unique and phenomenal.
Don’t buy it? Fine, let’s look at a product examples.
Example numero uno, and only uno cause this is gonna be a quick one. Twitter.
Let me ask you a question. Do you believe that there was a deep-rooted underlying need to broadcast 140 characters in February 2006 via non-SMS means? The answer is no, and the longer answer is noooooooooo!
Proponents of the problem ideology will claim that it was solving a communication issue. Similarly, they’ll argue that people were writing too much on blogs, and it needed to be less. Truth is, you can make a case for anything, i.e. read this Quora Link, it’s short. But the honest truth (and unless Evan Williams tells me otherwise) is that they just built some cool shit.
Why did it work? Because it was riddled with the V word. Value. There was massive value in broadcasting a message that limited you to the character limit in a SMS, but on the webs.
Unclear at launch, let’s put it that way, but people have a fun way of bringing ingenuity and discovering most excellent uses for awesome things, and now, Twitter is a news reader, a conversation medium, a broadcast network, a popularity contest, et al., a dynamic and robust platform that provides tantamount value to masses of individuals.
But what if Twitter & Co. was devised initially as a solution to a problem? What if it were devised as say a “social news reader” – problem, your friends and you have similar interests, and the web has loads of blogs, how do you find out about the blogs your friends read? You make a website that lets people share the blogs they read via social means.
Lame. Why? It’s extraordinarily limited in scope. Products that are typically engineered to resolve an issue will do just that, they may have sustainable business models, they may even be profitable, but they’re never going to be game changers.
Since we’re on the topic of Twitter, I reckon we ought to look as well at a new product launched by a pretty big player, Google+. You see Google + was phenomenally engineered to fill the gap between Facebook and Twitter, case in deck that shows exactly how Google+ was contrived and positioned.
And as for what it does, it does well (or poorly depending depending what you’re studying), it fits into this strangely ambiguous space, and between the interest layer and social layer. But is it really cool shit? Robert Scoble seems to think so, but I don’t. It just misses something, and that something is it’s not organic, it’s a platform that was engineered to fill a weird gap in the market (or to get Google into the social game), but it wasn’t built with “cool shit” in mind, the product is just too analytically devised, and it will never have the scope or reach or ingenuity of Twitter, because even Google’s $10+ bn in cash just can’t buy that certain Je ne sais quoi.
For all things digital, check out our thoughts here.
Every entrepreneur, or at least most of us will feel like a entrepreneurial fraud at one point. We tell our friends and family we’re working. Our money and time is invested into things that may or may not work. We work from home, café’s and sometimes lack the office space that makes us feel “normal”. We tell ourselves that and the rest of the world that we wholeheartedly believe in a mission. That our product is unique, that our product is solving problem x, and that we have the power to disrupt an industry of some sort.
But the real question is, can we? Do we tell that to ourselves, our investors, and pretty much everyone else but somewhere deep down inside we feel we’re not good enough, not smart enough, and maybe no one gives a shit? Do we even deserve the fluffy startup titles we give ourselves, CEO, CTO, CMO? After all aren’t those names reserved for magnates of industry?
Well, the thing is, as long as you’re a good entrepreneur then you’re going to have self doubt. It’s totally normal for you to feel this way. You may hide it from your team or others, but at the bottom of it all, it is a driving force that propels you and your company forward. This feeling is called “Impostor Syndrome” – and something to the effect of 40% of successful people have it, including doctors, graduate students, and the like.
Well, if you have any of these feelings, turns out you may in fact suffer from “Impostor Syndrome,” –but worry not, it’s totally normal. It can even work to your advantage.
Self doubt is likely what keeps you going. The time spent reading about your industry, the time spent perfecting, honing your skills, reading up on current trends are all productive activities that make you more adept at making smart, informed decisions. Each one of those doubts can push you closer to success.
But where do these feelings stem from? Even in societies that embrace risk, the majority of adults will work for someone else, will have a 9-5 job, and bring home a paycheck. And even though entrepreneurship is embraced all the same, there is still societal pressure to conform to the larger, more “normal” society.
The thing is, is that your average Joe doesn’t quite get why you’ve decided to ditch it all on a hyper-risky concept with a high probability of failure. Doing what we do as entrepreneurs is something we need to do, it’s integral to us. For Joe, it isn’t.
If you don’t believe in the benefits of your company’s products, talk to your customers. Not only are they the best people to make your product better, but they will appreciate your service and care. This builds loyalty, and potentially word of mouth.
While your doubt may be based in reality, and your company simply may not be good enough in XYZ, doubt in and of itself can also have a negative effect on your life and your business.
If you see that doubt is affecting your work and you believe that you can’t go on any longer, don’t give up. Keep going. Know that it happens to a lot of us.
If you believe that your products are lacking in quality and that is the reason no one is buying them, then look at your products, take a step away. Ask for advice from an unbiased party. It may not be your products, it may be your marketing strategy, distribution, or communication strategy instead. In the end, it’s most important to analyze your doubt and see how it can be channeled positively into making you and your business grow and succeed.
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No one ever said entrepreneurship was easy, that’s for sure. I’ve been working on all sorts of interesting projects with a range of clients. From big brands and emerging startups, I’ve helped them define their business model and strategy. Each project has its unique set of challenges, successes, nuances, etc. Yet, one pattern I’ve noticed throughout my time spent on projects is the psychological effect of entrepreneurship on the founders.
As I’ve reflected on my journey as co-founder of SWARM, I’ve spoken to CEO’s and upcoming CEO’s doing the same. Through this, I realize that we all deal with the emotional stresses and insecurities of entrepreneurship. We’ve all been on the rollercoaster ride where one day we feel absolutely great, the trajectory of our business is forward-moving, and the next step seems clear and manageable, only to find that we’ve hit a brick wall, whereby each subsequent decision seems daunting and the path we continue to pave becomes muddled.
Depression is the name for this cyclical pattern. I’m no doctor, but I can tell you that we all suffer from some form of it and it’s normal. At any startup there are the good times — hanging out with your co-founders over a beer, talking about how a product can disrupt an industry, how it can truly augment experiences and initiate new behavior in people, and so on and so forth. And there are also the bad times, when you’re feeling down in the dumps, finding problems that are virtually impossible to fix with your limited resources. You’re continually being rejected, permanently on the cusp of bankruptcy, racking up ridiculous credit card debt—you get the point.
You float between the two because on some level you realize the mania keeps you going. The depression keeps you in check, and the cycle repeats itself until that beautiful moment when you launch your product and lo’ and behold start getting users or clients, or both, and start getting in those first trickles of cash that soon turn into clumps, and lumps, and then heaps of the green stuff — of course, we’re assuming your idea actually had mettle.
And the next thing you know, it’s rinse and repeat, because unfortunately entrepreneurship is a drug.
So where am I going with this? I realize that depression is a natural side-effect of the entrepreneurial journey. I’m not saying that it shouldn’t be taken serious if it gets out-of-hand. Of course, you need to address it head-on if you feel your wellbeing is compromised and your business can barely keep afloat.
Keeping your emotional and psychological wellbeing in tact is 80% of the job. If after a quasi-breakdown, you can re-evaluate your situation from a more rational perspective, if you take whatever obstacle you face and turn it into an opportunity for learning and improvement, and if you take a few steps back and realize you’re not alone – then you’re OK.
We all suffer from bouts of insecurity and feelings of isolation. But whatever you do, don’t let your personal struggles interfere with your business goals. I understand this is incredibly difficult when personal successes and business successes are deeply entwined. Yet, turning trials into triumphs is the art of the job.