Ahmed Badruddin

One advantage of doing a tech startup is the freedom you have of working when and where. On the flip side, it’s really choosing the freedom of ‘where’ because as an entrepreneur you are ALWAYS working. I’ve begun working from coffee shops a lot. 35% of my foursquare check-ins are at coffee shops (And I think another 35% of them are at restaurants that serve Chicken Wings ) And because I get bored quickly, I make it a point to work from a different coffee shop every time. Today, I had a meeting in downtown Toronto, and then drove my Zipcar to Milton and am at a Starbucks at Milton preparing for my next meeting. Well, blogging instead.

My entrepreneurship prof at UofT always said ideas are cheap, “everyone has em”. And working full-time on one of my startup ideas, I’ve really come to realize how true it is. Execution is 99% of the battle. That’s a topic for another blog. I have a document with 100+ startup ideas and not enough lifetimes to implement all of them. I’m excited I’ll get to work on one of my small, fun ideas at Startup Weekend in Toronto, which I am helping out with as well.

So at the least, instead of those ideas living in a doc of mine, and me having spent an average of 2 mins on each idea, I think it would be cool to share some of my raw, unrefined ideas from time to time in hopes that someone creates value from them.

Right now, sitting at Starbucks, I cant help but think. Anytime I’m ANYWHERE, if I want wi-fi, I look for the nearest starbucks. I get my coffee, sit down with my laptop, and do some work. When I remember, I’ll do a foursquare check -in, hoping some day Starbucks will give me free coffee for it.

And there’s a Starbucks EVERYWHERE. What if starbucks could provide a whole city with free wi-fi? They could install routers, signal extenders, and repeaters to boost their range. People could login to starbucks wherever they are in the city. I’m sure they can figure a gajillion business models to make money from it. They are already working on a branded, personalized, and localized user experience online. That could be extended to not just people at Starbucks, people everyone in the city. They can either compete with ISP’s, or fill in the niche for people who only need 3G once in a while, maybe less than 50MB per month, so they dont need a data plan, and can pay starbucks much less. Starbucks can draw that crowd to their store, make more money on coffee.

Okay time to go back to preparing for my meeting in 45 minutes. Maybe starbucks will give me free coffee, or at least a free hug, for this blog post.

I’m neck deep in work. Behind where I want to be and more work piling than I know how to handle. Staying up late, waking up early, the typical, inhuman hours. Two days ago I was on Amazon ordering a book on jQuery to learn more about jQuery. I had to order one more book to qualify for free shipping. I have a very long wish list on Amazon but I wasn’t feeling very excited about reading any of the books on that list, which is unusual. I found an interesting book called “How Breakthroughs Happen” by Andrew Hargadon. Both books arrived today, and despite my busy schedule I began reading “How Breakthroughs Happen”. I couldn’t put that book down. I think it is a must read for startups, engineers, entrepreneurs, designers, managers, scientists, and students.

I think part of the reason I fell in love with the book instantly was how relevant it was to me, doing an an early stage GreenTech startup. The book shatters myths on innovations, explains the difference between invention and innovation, analyzes prior technological revolutions as well as companies that changed the technological landscape. Even though it’s now 4AM, I feel so energized after having read the book and want to share some of my favourite excerpts from the book.

• Innovation is as much social as it is technical
• Technologies are formed of tightly coupled arrangements of people, ideas, and objects. Innovation is a process of taking apart and reassembling these elements in new combinations
• It is one thing to know of a technology. It’s something different to know how to apply it, what else it can do, and how to adapt it to new settings
• In 1900, the automobile industry was in its infancy. There were fifty-seven firms devoted to building cars in the United States, and those firms built 1,681 steam-powered, 1,575 electric-powered, and 936 gasoline-powered vehicles. At the time, owning a car was an extravagance afforded mainly by the rich. By 1905, however, the industry was taking shape, offering glimpses of what it might look like when it matured. in those five years, for example, the design standardized around the internal combustion engine, reducing understainty on the part of entrepreneurs, investors, and potential owners alike. And by 1906, Henry Ford knew the direction the market was going: “The greatest need today is a light, low-priced car with an up-to-date engine of ample horsepower, and built of the very best material… It must be powerful enough for American roads and capable of carrying its passengers anywhere that a horse-drawn vehicle will go without the driver being afraid of ruining his car”. He wasn’t the only one with that vision. The idea of a low-cost car was no different than the idea of a low-cost computer today. The problem, like today, was building one.
• A closer look at the origins of mass production reveals the role of recombinant innovation at the Ford Motor Company. Ford invented neither the automobile nor the technique he used to mass produce it, but he did bring these ideas together in a way no one else had before
• Flanders and Wollering stayed long enough to show Ford the value of dedicated machine tools for the production of accurate parts at high volumes, but not so long as to set in place their old understanding of how to use them. [They left after 2 years at Ford]
• Too many times entrepreneurs have attempted to walk in the footsteps of Edison, Ford, or whoever – determined to be as boldly individualistic as history tells us these long geniuses were. But they weren’t. What set them apart … is the recognition that innovation requires not just a new idea (built from combinations of old ones) but also the collective effort necessary to make that new idea work. Innovation requires building a community of like-minded and wholly committed individuals who see their shared future in the success of the emerging technologies and industries

I have now been working on my startup full-time for over two months and want to share a few things I have learned that may be useful to people considering making the leap to start a company. The tech startup world is a whole new world and it required me to learn a very different way of thinking than when working in a large (or rather largest in the world, while I was there) software company. When I decided I was going to make the leap, all I had was an idea that made it to the top of my list of 100+ ideas, and I had done a lot of research in the GreenTech industry and run ideas by many folks in the GreenTech industry. That was enough for me because there’s no better way to learn than jumping into things, and it wasn’t something I could make much progress working part-time.

I began to go to a lot of startup events, read about successful and failed startups, talk to established tech entrepreneurs, angel investors, and venture capitalists. My favourite book is “Founders at work” because it has a diverse set of startup success stories. My favourite blog is Mark Suster‘s “Both Sides Of the Table” because I think Mark brings in great insights being both an entrepreneur and a venture capitalist. I also find Mark’s blog especially useful because he explains his advice and thoughts in depth based on his experiences, which is good because it helps you understand the context of the advice and whether it applies to you or not. There are several other really famous people with popular blogs in the startup world but I’ve always felt there’s a degree of self-promotion in their posts, whereas Mark’s posts feel more genuine to me.

One of the things I hadn’t thought of initially that led me to go back to the drawing board a while back is that I never spent time thinking about what kind of startup I wanted to build. I think it’s important because I think it also limits the kinds of ideas you can work on. Buiding a startup and getting funded is very complex and the entire process has many variations. However, I’m going to simplify the analysis here and look at three scenarios and types of startups:

1) Startups with no funding

2) Startups with growth funding to scale revenues

3) Startups with early stage funding

A couple notes:

• There are many funding options, it can be angel funding, incubator funding, VC funding. We’re going to consider them all the same for simplicity of this analysis
• There are many exit strategies too, such as IPO’s and acquisitions. VC funded startups go to IPO, for the rest we’ll assume exit is acquisition

No Funding

In self-funded or bootstrapped startups, typically founders take the startup to revenue, grow it organically to a sustainable business and eventually exit without any outside money.



Growth Funding

In this scenario, founders typically are able to get the company to revenue, but use funding to scale the revenue model and/or take a niche idea mainstream

Early Stage Funding

Founders figure their product market fit, or at least have done some validation. It’s hard to get investor money without at least a prototype, initial users, and some market validation. Then, heavy VC investments come in to build a team that can deliver on vision, typically tens of engineers.

Thinking about what kind of startup I want to build caused me to pivot a lot with my ideas but I think eventually it enabled me to make better decisions of where I want to be.  Early exits are more capital efficient than VC funded startups, and exits happen much sooner than VC funded startups (3-4 years vs. 12+ years on average). However, VC funded startups are the ones that have the big, famous exits like Mint.com, which I think most entrepreneurs dream of. Also, it’s a lifestyle choice. In VC funded startups, founders lose freedom and control but on the other hand, through the VC’s resources, founders can build a very strong network, accomplish a lot more, hire young rock stars, and work on really big ideas. There are advantages and disadvantages to each approach so do give this some thought when founding a tech startup!

Resources:

http://www.startupcfo.ca/?p=329

http://www.early-exits.com/Early_Exits_Reviews.html

EAVB_NEIEMJQHHZ

A couple of weeks back I was in Charlottetown, Prince Edward Islands, a small Canadian city with a population of about 30,000. It’s a beautiful city with a small downtown and a very scenic harbourfront, unspoilt by industrialization. It’s the kind of city I want to go back to whenever I need a break and some downtime. Life is so laid back. The water is so calm and still.

I began wandering aimlessly around the city and right outside a house, I noticed an Itron Smart Meter!! Charlottetown is one of the last places in Canada I was expecting to see a Smart Meter. I walked around the block and every house I could see had an Itron Smart Meter outside it. I was very surprised to see Charlottetown being an early adopter of Smart Meters when there are major cities in the United States still working on installing their first Smart Meters.

Most people I talk to are unclear on what Smart Meters are or what the Smart Grid is. In short, Smart Meters measure each home’s energy consumption data in more details and report back to utilities over a wireless network. This way, someone from the utility company does not have to take down meter readings every 2 months. In Ontario, every hour the current meter reading is sent back to the utility. Smart Meters are a key component of the Smart Grid, which is a modern electricity grid enabling two way communication between each home and utilities, increased reliability and security, more data to help manage and optimize energy consumption, and better integration with renewable energy sources.

Some of the major problems with the traditional power grid are:

1) Consumers do not have data to understand and optimize their energy consumption

Traditionally, homeowners see a bill from their utilities containing their total energy consumption for an entire month. However, they are unaware of what parts of their homes or what appliances/devices are contributing to the bill and how they can reduce their bills.

Secondly, because the traditional electricity bill only displays monthly consumption data, there is limited trending data available to users. The only conclusions a consumer can draw from the limited trending information available is what months his or her energy consumption is at a highest and by what percentage compared to other months. However, if we had more granular trending data such as “Your air conditioning usage increases by 80% between May and June, which is 40% above your neighbourhood average”, users would be able to make corrective measures to reduce their bills. Furthermore, comparisons with averages such as neighbourhood average or city-wide average will help set a baseline for consumers to set energy efficiency goals.

2) Consumers are unaware of ways to improve their energy efficiency

The average home owner has no expertise in improving home energy efficiency. Let’s take Toronto and Ontario as an example. One of the biggest energy conservation challenges identified by the Ontario Power Authority is Customer Awareness.

Government-supported efforts such as Green$aver have been launched to help residents of Toronto improve their energy efficiency. It is partially motivated by the fact that the City of Toronto determined that more of the city’s CO2 emissions came from houses (30%) than cars (20%) because most Toronto homes were built before 1960 and were poorly insulated. Such efforts have met with some success. For example, retrofits of Toronto Community Housing units done by Green$aver have achieved permanent 35% – 40% reduction in energy use, more comfortable homes, and reductions in greenhouse gas emissions of over 3 tonnes per house annually. Having more data about energy consumption enables us to improve energy efficiency.

3) There are no incentives to shift energy consumption

Taking Toronto as an example again (mainly because I live in Toronto!): to manage peak demand, Toronto Hydro has come up with a Time Of Use pricing structure which encourages consumers to reduce energy consumption at peak times and shift it to off-peak times.

For utilities like Toronto Hydro, the advantage is reduce cost because additional energy generation during peak times is costly. There is a significant price difference between off-peak and peak-time this new pricing structure which presents consumers with an opportunity to optimize their usage and drive more consumption to off-peak times. The most important scenario is plug-in electric vehicles. As PHEV’s become more popular, we’ll need better ways to manage the charging so we ensure this extra load is distributed. If we don’t distribute the load over time, it is the equivalent of a traffic jam in the electricity network, except it can result in blackouts (which results in more profanity than a regular traffic jam!)

Utilities are already trying to help consumers shift their loads, but they obvious lack the resources and expertise to manage each home’s energy consumption optimally. For instance, Toronto hydro has started a program called peaksaver in which they pay customers $75 and swallow the cost of installing a small device on the customers Air Conditioners which reduces the AC’s energy consumption during peak hours

Therefore, Smart Meters enable a Smarter utility grid, which creates many more possibilities for innovations around managing and optimizing energy consumption. And for someone like me building a startup in this space, it’s very exciting to see adoption of these smart meters in seemingly unlikely locations like Charlottetown. Keep installing them Smart Meters!!

Introduced by Venture Beat’s Matt Marshall as “The best known investor in Web 1.0, involved in the founding of Amazon, Netscape, and Google,” John Doerr and his firm, Kleiner Perkins, have raised a billion dollars to be channeled into greentech. “Greentech could be the largest economic opportunity of the 21st century,” said Doerr.

In the past few weeks, I have been brainstorming business ideas for my business venture. A challenge I have run into is that my list of ideas is in the hundreds and I don’t have a quick way to evaluate all of them. I do extensive market research on ideas that excite me the most but there’s no science or analysis behind why I picked those ideas.

There’s a couple of things I learned very quickly:
1) Many of the ideas can be grouped into a meta-idea. E.g. if I have ideas on technologies that can help homes optimize their energy consumption, they all fall under Home Energy Management Solutions and that way I can do market research for all of them simultaneously and it also allows me to see the big picture better
2) Rather than focusing on what idea excites me I need to think about ideas that I think will work in the market, or will excite others . But that means I need some sort of framework that allows me to do that analysis in less than 1 minute for this to be feasible.

I then came up with this simple framework, assigning points to each factor. Each idea has to add up to a certain minimum before I would take it any further.

Factors included in this framework (in no particular order):

1) Market Opportunity – Will people pay for this product? How does this impact people’s lives? My personal preference is a consumer facing product.
2) Revenue Potential – How much will people pay for this? The greater the value proposition, the more people will pay for it. I prefer a direct sales model so I am currently ignoring ideas that rely on advertising for revenue
3) Environmental Impact – How will this idea improve the environment?
4) Technical Expertise – Can I easily prototype this idea? The answer to most software based solutions is yes, it just gets tricky when there’s hardware involved as I haven’t done any hardware design since University
5) Innovation – Is this idea bringing something novel to the market? A quick test is to see how long it would take to develop. If it’s something that can be developed in 2 months by one person, it’s just a hobby software, not a real game-changing innovation which are multi-year projects.
6) Competition – Since GreenTech/CleanTech is a new industry, it’s easier to identify niches with less competition. A metric I am using is working on something I don’t see anyone else working on for at least one year. I also want to avoid directly working on areas that the big players (Microsoft, Google, GridPoint, etc..) are pursuing. But there’s many ways to complement what the big players are working on to satisfy niches. I find that over 70% of the time I think of something, I’ll do a quick Google search and find a startup already working on something similar, or the exact same thing I had in mind. The challenge here is to determine whether to continue to go after that idea but think of ways to differentiate, or just move on. I think it depends on how high the idea scores in other areas. If so, it’s actually worth going after, despite the competition.
7) Cost of entry – Can I sustain this business with my own funds till at least Alpha release, or ideally Beta or V1?

I am curious to know what your thoughts are.

Towards the end of every year, I do a recap of how the year went and plan what’s next for me. In my annual planning, I spend a lot of time thinking about my personal goals and breaking them down by career, health, social, community, self development, and financial. A lot of that has been taken by learnings from books by Steven Covey and David Allen. I then make a powerpoint presentation, with slides for each area, goals, action plans, accountabilities, schedule, the whole nine yards. I don’t share that powerpoint with anyone. Once all my goals are locked, I just go at it, and perhaps look at that powerpoint file once every 2-3 months. This allows me to focus on execution through most of the year and allow life to take its course after I have defined the initial direction.

This has served me well in the past few years. I look back at 2009, and it’s been a great year. What I am most proud of in 2009:

Towards the end of 2009, I sat down to think about the next year and how I was going to push myself even further. This was also at the same time I was really getting interested in Green/Clean technologies – technologies to help us become more energy efficient and sustainable. It started off as something I was just interested in and would tweet about here and there, to something I got really passionate about and started going to green networking events and organizing my own GreenTech Panel event, to something I would think about day and night. I began to see so many possibilities and ways software and technology can be used to increase energy efficiency and optimize energy consumption.

Somewhere  deep in those thoughts, the entrepreneurship bug bit me. My childhood dreams of starting, owning, and running a company were reawakened and they took over my 2010 planning. My 2010 plan was condensed into the following statement - To Dream, Dare, and Deliver. Dreaming of possibilities, daring to go after them, and delivering on them.

Dreaming in itself isn’t enough. Without action, we can’t realize our dreams. Hence, the need to dare. It takes a lot of courage to quit a great job and comfortable life to start a company. That first step requires tremendous strength and conviction. Daring by itself isn’t enough either. Strong planning and execution is required to go from where you are when you take that first step to where you dream to go. Therefore, the need to deliver. And that has the most unknowns because there are so many factors beyond your immediate control.

I think there are a lot of opportunities to build novel technologies that can improve people’s lives and reduce their carbon footprint. Over the next few blogs, I will write more in depth about the problem space I am targeting and at a high level, some solutions I have in mind. As people are becoming more environmentally conscious, the market is shifting and our culture is evolving. Every change and evolution creates new business opportunities and unfulfilled consumer needs. I want to be part of that first wave of solutions and innovations that will transform how we consume energy.

I am excited and scared at the same time. Excited because there are plenty of opportunities out there. Scared because there is an equal number of ways I can fail to realize my dreams. I don’t know how I will fare but I won’t know unless I try. What excites me is impacting and creating value for society. Ultimately, that is how we will be remembered, how we build the legacy we leave behind. When we create businesses, we create jobs, we expand the economy, we satisfy a customer need, we create value.  It’s real. And one of the best feeling is taking an idea and bringing it to life. There was a time when people risked their lives to open new frontiers of knowledge and sciences for mankind. We have evolved to a point where the amount of risk we have to take is far less than what our ancestors had to take. We don’t risk religious or political persecution anymore when trying to innovate or proposing new ideas and ideologies. Taking those times as a baseline, we’re fortunate to live in the times we do, and have the opportunities we do. We have little excuse not to take some risk to seize opportunities.

I will be moving back to Canada to start the company which I am excited about. However, this has been the toughest thing I have had to do. I made some of the best friends I have ever had in Seattle and I really love Seattle for all that it’s given me. I’m sure I will visit many times, there are many memories attached to this city. The plan is to start heading back sometime in March.

I am also aware of the sacrifices needed to live the life of a tech entrepreneur. I will live a more frugal lifestyle. I will barely get sleep. There will be many emotional ups and downs. I might fail and lose all my life savings. But.. it will be worth it because of my strong belief in the following:  as long as you work hard, love what you do, and create value for others, good things will happen.