Entries Tagged 'software' ↓

Pride, Passion, Talent on Display at Startup Weekend Seoul

I believe that Silicon Valley may soon be going the way of the floppy disk.

For the last two weeks I have been traveling around Asia with a group of tech entrepreneurs, on a trip called “Geeks on a Plane” organized by Silicon Valley investor Dave McClure. I took the same trip last year.

Why take a trip like this? The answer gets at some very real and seismic shifts taking place in the startup world that will be big news over the next few years.

Startups Cost Less

Ten years ago a successful Internet startup might require one to five million dollars in outside funding. Data centers, engineers, and software licenses were hot commodities and could easily drain a startup’s resources.

Now it is possible to get a startup to the point of testing it in the market — with real customers — for $25,000 to $50,000. This effectively removes VC’s from the equation at these early rounds and turns things over to angel investors. As angel investing becomes increasingly professionalized, success rates increase and more people become involved with it.

“Silicon Valley is a State of Mind, Not Necessarily a Real Place”

Pay attention to this one! This is a quote by Dave McClure and it captures what is happening perfectly. Everywhere you go, there are techies and entrepreneurs who follow the tech business scene, and they are all ideological peers.

Silicon Valley is all about embracing the idea that the world can be changed for the better, and that one can (ultimately) realize rewards by changing it. If you believe this, you are a part of Silicon Valley. What about that statement is related to place?

In Shanghai, Beijing, Seoul, Singapore and Tokyo I have seen first hand the buzz and excitement that comes from people who believe that they can engage with the problems of our world imaginatively and productively. And they are not moving to Silicon Valley.

3D Printer at Singapore’s hackerspace.sg

Place as a Strategic Differentiator

Not being in Silicon Valley is very helpful if you are trying to tap into developing markets like those in China, Korea, and Japan. It is also helpful if you don’t want to have to pay Valley salaries and sucked into the echo chamber there.

As an example, a skilled developer in Silicon Valley might cost you upwards of $120,000 per year; the same person in India would cost $12,000 per year and in Singapore they would cost $48,000 per year.
If you are trying to build a product to serve the Asian market, wouldn’t you rather base your company in Singapore?

Being in “a” place is more important than being in “the” place

It is widely assumed that internet technologies like Skype and email crush distance and make global distributed business possible. True, but there are exceptions.

Real creativity, trust, and ideation has to happen face to face. This is where the magic occurs. If you don’t spend time with people you can’t create.

New-technology tools can help with execution, but only after the team dynamics are in place; they are great for keeping people connected and plugged in, but suck at creating an initial connection.

Love your place. Find the other like minded souls who love your place and start companies with those people. The creativity you unleash in your own backyard is the most important competitive differentiator you have. No one else has your unique set of talents and point of view. Leverage it.

Every City is Becoming Self Aware — All at Once

I do not know of a city anywhere in the world that is not presently undergoing a tech community renaissance right now. This is a VERY big deal.

Every city in the United States along with Europe, Asia, and South America is now using the same playbook — implementing coworking, hacker spaces, incubators, angel investment groups, bar camps, meetups and other proven strategies that will have the effect of cutting off the oxygen supply to Silicon Valley.

Let me say it again: Silicon Valley is getting its global AIR SUPPLY cut.

For the last few decades, Silicon Valley has traded on the fact that people are willing to move there to start companies. The MAJORITY of valley companies are founded by foreign born entrepreneurs. What if they stop coming? What if they find the intellectual and investment capital that allows them to self-actualize in their home turf, where they already have a competitive advantage?

The fact that we have made it so hard for new immigrants to come to the valley and create startups just makes things that much worse. That is why the Startup Visa concept is so important if America – not to mention the valley – wants to keep excelling in innovation and the economy of ideas.

“Soul-crushing Suburban Sprawl” – Paul Graham

The Valley Kinda Sucks

Everybody says that the big draw to San Francisco is the weather. True, it can be pretty nice at times. But it can also be pretty miserable.

The reality is that the weather makes no f*cking difference if you are slaving away 26 hours per day on your startup; and the fact is that humans only really perceive changes in weather anyway: you’ll notice a nice day if it has been preceded by 10 rainy ones, or vice versa. Studies have demonstrated this. Look it up.

Paul Graham said it best, “Silicon Valley is soul-crushing suburban sprawl.” And he also suggested that places that can implement a bikeable, time efficient startup environment without sprawl have a significant competitive advantage over the valley.

Nearly every major city is becoming that place for its community of entrepreneurs. All at once.

So Why Travel?

It’s simple: to go to where the startups will be coming from. Investors who wait around for startups to show up in the valley are going to miss out on serious innovations and investment opportunities.

This means leaving the Lamborghini parked on Sand Hill Road and cabbing it to a gritty hackerspace in the Arab section of Singapore to meet the innovators who are building the future. And this is something that most investors think they are too good and too important to go do.

Fortunately there are scrappy, forward-thinking folks like McClure who are willing to go out there and embrace the future and begin the creative destruction the next wave of innovation will bring to valley culture.

Our challenges are too great to demand that innovation happen one way, in one place, with one set of people. Innovation needs to be systematized and distributed, and this is the opening act.

The Future of Entrepreneurship

I had a great conversation with Dr. Meng Weng Wong today, founder of Joyful Frog Incubator in Singapore. We pondered questions:

• In the future, will companies form teams and then try to get funding, or will entrepreneurs just gather, form ideas and try things?
• How do bands form? And are incubated startups just boy bands?
• Are we not always just betting on individual ability to execute?
• Doesn’t team (and execution) always trump idea?
• Is entrepreneurship a cycle? Shouldn’t exited entrepreneurs come hang out with first time entrepreneurs and try ideas together?

These are important questions in their own right, but the most important thing is that we are asking them. And so are people around the world. And it has nothing to do with Silicon Valley, the place.

Want in on the ground floor of this next wave of innovation? Understand the change that is coming and leverage it in your own backyard. Get involved.

Because I guarantee that in five years the Valley will be a very different place and that we will see thriving startup communities bearing real fruit in every major city.

Why go to the Valley? Good question.

A couple of acknowledgements: Shervin Pishevar pointed out that he and Dave McClure have been talking up the “Silicon Valley is a state of mind” concept for some time; he deserves proper attribution. Hats off, Shervin — the idea certainly resonates with me and I applaud both you and Dave for recognizing and acting on its power.

Thanks to everyone for engaging in this conversation!

The recent discussions of entrepreneurship here prompted several entrepreneurs to contact me, both via email and in person. Here is one kindred-spirit’s story, reproduced (and edited) with permission.

Hey Dave,

I’ve been reading your blog for the last week or so, and I wanted to let you know I appreciate your thoughtful angle on entrepreneurship, design, and intellectual life. Like many of your posts indicate, the challenges of developing personal creativity and starting something new are profound in our current culture. Last June I graduated with an engineering degree from the University of Maryland. Instead of acting on ideas to change the world, I did, as most graduates do these days, took the full time job that paid the most. (Chris Dixon’s post on the topic hits it). Add consulting and government consulting to where all the talent goes in the DMV. To a college kid, the prospects of a $70,000 salary are blinding. And if you consider yourself a self-starter, you realize quickly that you are fighting a powerful majority that would call you crazy for not taking such a lucrative offer.

That said, I have devoted a lot of my free time to developing my startup ideas through mockups and requirements. Yet, despite my engineering background, I just don’t see myself as the technical co-founder that many think is the necessary half of successful startup teams. I can spend hours reworking code, but developing from scratch is beyond me. So the question I have been struggling with is how do I find the real technical partner? As you posted, startups are about the people, but finding that passionate partner is incredibly difficult.

My current idea that I have been toying with revolves around [redacted]. From mobile app, to website … I am at a point where I would consider outsourcing app development, just because I believe in my idea and want to make progress. However, say a couple months into the future, I now have an iPhone App (and a lot less money) but I still don’t have a team to further the idea. In addition, I am not so sure my concept has clear profitability, but at my age (23) what’s wrong with idealism as a starting point?

Sorry for the length, but I wanted to offer some of my thoughts as to what it means to be on the outside of entrepreneurship, wanting in. Any return advice would be great!

Regards,
Lance

My response to Lance:

Lance,

Thanks for writing! Certainly sounds like you have the right spirit about things, and I agree with you re: Chris Dixon’s post. He’s got a very good take on things.

Some things I’d recommend:

1. Subscribe to Startup Digest Baltimore. Go to http://thestartupdigest.com

2. Go to Innovate Baltimore on Wednesday 5/19 and introduce yourself. http://innovatebaltimore.com

3. Come hang out at Beehive Baltimore. It’s where the community is centered. http://beehivebaltimore.org

4. Let’s find a time to talk some more. I am out of town for two weeks starting next Friday but we can find a time in June. Pick something: http://tungle.me/davetroy

Looking forward to meeting you!

Do you mind if I share your note, along with my response, on my blog?

I want to keep reminding people that there are LOTS of people like you out there…

Best,
Dave

Response from Lance:

Sure. No problem. If you could edit out the sentence or two about my current idea, that would be great. Also, I currently live in the Northern Virginia area, so I’ve been on the DC and Baltimore Startup since I was introduced to them at BootstrapMD. I just started looking for resources like InnovateBaltimore and BeehiveBaltimore around DC. Any suggestions?

Thanks,
Lance

My response to Lance:

OK, thanks.

You should consider moving to Baltimore as the startup + coworking scene is now a lot more active. Innovate and Beehive are just the tip of the iceberg.

There are some OK things going on in the DC area (Founders Institute, Launchbox Digital, Social Matchbox, DC Week), they run on weird schedules and are not active all the time. Baltimore’s scene is a lot more persistent and becoming much more interesting. Affinity Lab is like an expensive corporate version of coworking. Beehive is real coworking.

Anyway, I’m biased, but this is something we’re serious about in Baltimore and we’re committed to making it happen, all the way from the Governor to the Mayor to each individual startup.

Hope to see you around the Hive soon.

Best,
Dave

Why is being an entrepreneur considered so unusual in our university culture? I have a theory.

Bill Gates: dropout. Paul Allen: dropout. Steve Ballmer: dropout. Richard Branson: dropout. Warren Buffett: dropout. See a pattern?

Entrepreneurship is the opposite of University culture, which celebrates progressive levels of achievement, with the ultimate goal of becoming a college professor. Entrepreneurs create the circumstances of their own success, by changing the world around them and making their own game.

I’m not suggesting anyone dropout, but we do have to ask: is our educational system creating maximum value for society? Or is it just creating clones, steeped in the idea that there is only one true path to security and achievement, which are then manipulated by true entrepreneurs and leaders who really know how to shape the world around them? And which are you?

This post started out as a reaction to yesterday’s post by Matt Mireles in New York City about the dearth of talent available to startups there. I felt it was relevant to the Baltimore/Washington area and shared it with some of our local leaders. It sparked a deep conversation — which I captured below.

Dave Troy to some area investors, entrepreneurs, and economic development officials:

This blog post out of NYC is a decent analysis of the problems that east-coast tech startups face.

• Drop in “federal sector” in place of “Wall Street” and you have an almost perfect analysis of our situation here in Maryland.
• Scarce technical talent wants to be employees, not co-founders for equity.
• A large well-funded ecosystem that sucks up available talent (Wall St, Feds, etc)
• Universities are barely aware of the startup ecosystem and do not contribute a good supply of talent

As the guy points out, a few good exits and some Stanford-like thinking can quickly change things. Tomorrow he’s writing some about how the NYC community is addressing this problem.

Roger London (investor, director of America’s Security Challenge):

I agree for the most part. I would tweak it as follows (comments embedded below).

1. Scarce technical talent wants to be employees, not co-founders for equity.
Totally agree, however technical talent in this region is not nearly as sophisticated and picky as the Palo Alto engineer sited in the blog. While most technical talent here would not take equity or options in lieu of a paycheck, I believe there are many that could find a suitable combination. This crop of “vested” technologists will anchor our next generation of technology entrepreneurs. They must first get a taste for the long-term value of equity and just as importantly realize a bit of a payoff so that a “paycheck” is no longer their motivation and requirement.

2. A large well-funded ecosystem that sucks up available talent (Wall St, Feds, etc)
I don’t think our technical talent goes to work for the feds, but they are hooked on the federal R&D heroin that so liberally “strings out” our technical talent making them addicted to and dependant on research funding, thereby unwilling to consider leaving the “shooting galleries” of the university and federal labs (got carried away with the drug metaphor). The feds could do a better job leveraging that investment by coordinating private sector collaboration, specifically startup collaboration with these technologists to open their eyes to the possibilities. In the absence of any progress there, we need to make a concerted effort to bring the eventual customers and serial angel entrepreneurs to the fed researchers to identify, shape and license technology that is desired by the market.

We need to find a more efficient way to produce more profitable and more successful startups. While mentoring, incubators and similar programs are valuable, the most effective way to increase the probability of success is to bring the customer to the startup table and have them help shape the requirements and solution. Who are the largest technology consumer enterprises in the state? State of MD government, Hopkins Healthcare Systems, Constellation Energy, T Rowe Price, Legg Mason, Lockheed, Fort Meade, Coventry, Marriott, Host, WR Grace, Catalyst, Discovery, Black and Decker, McCormick immediately come to mind. There are a number of technologies that most of these companies would want to procure because it improves their performance, customer service, security, bottom line, etc….things like high speed computing and distribution, more effective customer interaction tools, more effective customer security re their identify/information and customer logins, network security, building and vehicle fuel efficiency, etc.

Almost every agency and department of the federal government also has requirements for these and by establishing beachhead Maryland customers, we can stand up and provide credibility to young companies and then help springboard them into the federal government. With varying degrees of success, organizations already exist that follow this model but their efforts should be amplified.

3. Universities are barely aware of the startup ecosystem and do not contribute a good supply of talent
See above

As the guy points out, a few good exits and some Stanford-like thinking can quickly change things. Tomorrow he’s writing some about how the NYC community is addressing this problem.

NYC does not have the research funding that we have in the state and their solution might not be replicable here. Our ecosystem of capital, talent and customers is fairly unique which is another reason why we can’t just “copy” the innovation models from NYC, Boston/MIT, Silicon Valley, RTP or other innovation regions. The assets we have in this region that are not found anywhere else is the vast amount of federal R&D (#1) and the largest consumer of technology on the planet, the federal government. Unique programs need to be developed with those two factors deeply embedded that fosters emerging growth tech companies and helps to bridge the gap between research and market adoption. That work needs to be designed and operated by entrepreneurs and early stage investors. While collaboration with academia, federal and government stakeholders is important, their participation in the design and operations should be limited or we will get more of the same.

Bob Bloncheck, investor and serial entrepreneur:

My two cents:

I think we have the opposite problem as NYC. We have a lot of young techies trying to do start-ups in the region, and not enough of the non-technical entrepreneurs.

And when the experienced non-techies do give a start-up a try, they come at it from a professional services business model perspective, which is another side-effect of the government focus (indeed addiction, Roger) in the region.

Everything is driven by a time-and-materials mindset here that permeates not only government, but other big institutions as well, and contributes to the lower risk tolerance.

I just had another conversation with an entrepreneur last week who is considering abandoning a product approach and going to a services model. And it is because a large health care institution keeps telling him that they never would buy a product/technology from a young company. But they would do business with him on a services basis using his technology.

As many of us have learned the hard way, products and services are very different. And to the extent we are trying to foster a start-up ecosystem in the region focused on products, and not just more 3-10 person services spin-offs from other services businesses,
we need (as Roger said) unique programs that would encourage these large organizations to adopt products from local start-ups more readily (and not just technologies implemented using a services approach).

And we need the universities to start teaching more:

• Product management (not just project management or business analysis – they are different)
• Product marketing
• Market focus (in addition to customer or sales focus)
• Entrepreneurship

Business model is king, and it needs to be more than just billability, if we want a vibrant start-up culture in the region.

Mike Subelsky, entrepreneur and community leader:

Thanks for sending this Dave. I can only speak for my sector (consumer Internet), but this guy is DEAD ON. Maryland is awash in entrepreneurs with good (or good enough) business ideas, who are willing to take the big risks, but who just need someone who can build software who’s willing to take on some of that risk as well.

I know this empirically, because (due to my blogging about startups in Baltimore and due to Ignite), a lot of them end up emailing me asking for advice about how to find a decent programmer. I’ve had that conversation at least 10 times in the past 2 years. One of the most promising of these people actually just gave up and started teaching himself Rails so he could get his education software prototype out the door — when that guy starts looking for funding, if he even ends up needing it, look out!

My friend Gabe Weinberg, an entrepreneur in Philadelphia, had an interesting response (link).

I’m encouraged because we’ve been working on the kind of “drawing us out” he suggests for a few years now. But there’s a long way to go. Even just in my one little neighborhood, I’m still meeting very qualified technical people who have zero idea about the startup world in Baltimore. It’s not a matter of “do they prefer cash or equity” — it’s that they’ve never been offered and have no idea such a distinction might even be available.

Brad McDearman, Economic Alliance of Greater Baltimore:

We just took a group of 40 Baltimore business, government, education and non-profit leaders to Austin to see what we could learn from that market. We were hosted by the Greater Austin Chamber and the Lance Armstrong Foundation.

I think most participants from Baltimore would say two things stuck out related to how Austin deals with entrepreneurs…and the Austin people stressed these in their presentations to us:

• Celebrate entrepreneurs and wealthy people. Make rock stars out of them…and make sure wealthy people in the community and the entrepreneurs are hooked up. Get the wealthy people to invest in the start-ups.
• IC2 at the University of Texas – this is an institute at UT that stresses and supports entrepreneurship in the region and is what many point to as being the catalyst for driving the entrepreneurial culture in Austin. They put out white papers, provide support and networking for entrepreneurs…and connect people.

Many of us came away wondering how we make this happen in Baltimore. How can we get Hopkins to take a leadership role in Baltimore’s entrepreneurial and economic development efforts? JHU is a known entity and the folks in Austin kept talking about how lucky we are to have Hopkins given their research and world famous medical center (which Austin does not have). But JHU does not lead an economic development effort the way UT does.

They have created a culture in Austin related to entrepreneurship that even the corporate businesses respect and believe in…and it seems like they did it in a grassroots way (through the entrepreneurs themselves) and through the major institution (UT). But it doesn’t appear to have had much to do with the traditional business organizations (although the Austin Chamber does receive high praise for its broad impact and support).

Scott Paley, Baltimore entrepreneur, former New Yorker, to me:

Just from my own tiny perspective, this has long been a problem in NY. When I lived up there, I’d say I was contacted at least 5 times a year by non-technical startup founders asking me if I’d leave my own company to work with them as a technical founder. Even now I still get calls from non-techs asking if I know smart tech people in NYC.

Scott Paley to Roger London:

Hi Roger,

You wrote:

technical talent in this region is not nearly as sophisticated and picky as the Palo Alto engineer sited in the blog. While most technical talent here would not take equity or options in lieu of a paycheck, I believe there are many that could find a suitable combination.

I’m curious why you think this is the case (I’m not disputing the assertion – I don’t yet know enough about the local technical scene to be able to do that.) But, why should an engineer in Palo Alto be more sophisticated? Is it cultural? The experience of having gone through multiple startups, failures, and eventual successes? As a relatively recent “immigrant” to the Baltimore area (from NY), I’d like to try to understand the region better, so conversations like these are really helpful to me.

It does seem like in SV there is a general culture (or perhaps “badge of honor”) in starting a company, failing, starting another, and eventually hitting it big. In such a culture, people optimize for equity, but I’m not certain that should be characterized necessarily as “sophistication”. Could it be that, in general, technical talent in SV is younger and less established in the typical “traps” that make it hard for people to consider entrepreneurship? Failure is “easier” in a sense?

I can say from my own experience that the idea of failing was easier to contemplate when I was in my 20’s without a mortgage and kids than it would be today.

Of course, this seems line of thinking seems most relevant for first time entrepreneurs, which takes us back to fixing what Dave wrote in the first email:

Universities are barely aware of the startup ecosystem and do not contribute a good supply of talent.

Roger London to Scott Paley:

Scott- the article described the Palo Alto engineers thinking as “sophisticated”, not my words. I do think most of what you describe re multiple startup experience is true.

Experience gained over several startups for several years each likely puts that person around 30 years or older. I don’t think however you can replicate that experience (sophisticated thinking) by working with universities and getting a larger volume of people in their 20’s.

This region also has a lower tolerance for failure. Rather than throw young people to the wolves and try to make them entrepreneurs realizing in this region you cannot erase the black mark of a failed venture, we should make them entrepreneurs-in-training and help place them in a growing company where they can still earn a paycheck, but have some skin in the game while simultaneously experience but not be responsible for the critical elements of successful entrepreneurship…. how to acquire key initial customers, product development, building a team and staff, operational infrastructure, raising capital, etc.

Jared Goralnick, entrepreneur and community leader shared an interesting response by David Fisher:

– Have better ideas and bring more to the table: There are a few non-technical people that I’d follow anywhere and its because they do have consistently great vision and ideas. Show people that you can lead and followthrough. One of my good friends Tim Hwang can’t code at all (AFAIK), but I’ve seen him execute with the Awesome Foundation, ROFLcon and the Web Ecology Project. I know that if he gets a great idea, that he will hold up his end. Do things like this and you’ll have no problem finding developers and technical co-founders.

It’s true that if you’re a “tested entrepreneur” then people will want to be part of your vision, but most people aren’t their first time around. Still, I think this speaks to the value of community involvement in lieu of us having a really technical and available scene.

I don’t think it’s actually particularly easy to find co-founder engineers or engineers in general in the valley. I bet we’re going to feel this way everywhere…

Jared Franklin, product manager at Bill Me Later:

Thanks for posting the responses in “Baltimore Area Leaders Sound Off on Startup Scene.” I completely agree with those who cited the lack of support and production from our Universities in the area. I graduated last year from Loyola as an MIS major and now work for PayPal/Bill Me Later as a product manager. I would never have landed the job if I didn’t intern for Bill Me Later 20+ hours a week for 2.5 years of my time in college. School simply isn’t enough.

Our MIS major consisted of <10 graduates in the 2010 class and I'd consider it to be the most "entrepreneurial" major at the school. Our biggest class in the business school were either general business majors or finance majors. The school did not do enough (or anything) to teach students what other majors existed or what type of jobs they help you develop skills for. Additionally, the MIS majors capstone project consisted of a business plan and a non-functioning prototype of a web product. However, a portion of a semester and lack of coding skills did not help. I wish they paired us with the CS majors to develop a product together. This would have been beneficial for both the MIS majors and CS majors. I find myself in the same predicament now, one year out of college. I generate ideas (for projects outside of work) but need someone who can code. I was exicted to see Bob Blonchecks point of view stating that he thinks we have a lack of non-technical entrepreneurs. Anyway, thanks for the post. It was great.

Please feel free to post YOUR thoughts and comments!

• Adam Bachman wrote an interesting response, citing a paper by Dr. Saras Sarasvathy I’d also referenced.
• Keith Casey had a couple of interesting tweet responses. [one, two]

What are YOUR thoughts about East Coast startup culture?

I’m enjoying watching folks around the world prognosticate about the iPad, what it is and is not, how it might sell and what it means for computing. Sorry, but I can’t help but weigh in with some predictions.

My son (age 12) and I have a bet at the moment about the outcome of the NCAA basketball tournament, which I know nothing at all about: I wagered that Duke would emerge victorious (I ignored the rest of the brackets). If I am correct, he owes me $487 trillion dollars; otherwise I owe him $12. (Hey, I’m trying to teach him about Popperian philosophy.)

So, it is with the understanding that if I’m right, you, dear reader will owe me $487 trillion dollars, that I offer this humble marketplace analysis.

• iPad will be released on Saturday, April 3. That means that a ton of people are going to get to play with it over the Easter weekend. And I’m talking about peoples’ moms and aunts here. It’s been widely reported that the experience of using the device is quite seductive, and I’ve argued it’s because it activates different parts of the brain. Somewhere around 200,000 units will be sold over this coming weekend, and each one will be shown to an average of 10.6 other people, creating a latent (nagging) demand for another 21 million units.
• A bunch of old-media outlets will rejigger their offerings for the iPad and try to monetize the audience. Many already have. But this is Waterloo. Or Little Big Horn. They will sucker some folks into using the device for the “traditional” content, but sales will be disappointing. Ultimately they are going to have to radically reconsolidate their offerings and innovate in some serious ways. See below re: piracy.
• The device is going to continue to rip through the population, busting past all sales records for a general computing device. This will have nothing to do with features or even the apps (yet). This will be based on the user experience alone. Everyone who uses the thing comes away sounding like a religious convert. In the same way that the original iPod just “felt right,” Jony Ive has managed to bring meaning to a general purpose computing device like nothing ever before. The central thing Ive has done is to bring the experience of computing directly to the user, with no barriers and no “analog” devices like the mouse. People will have a visceral relationship with these devices.
• Roughly 20% of the initial batch of Wi-Fi only devices will be “handed down” to a secondary wave of users when the 3G models are introduced a month later. This will amplify the initial sales numbers, as many folks end up buying two units in the first month.
• PDF-format books and news will become the Lingua Franca. What happened to music and movies is about to happen to books. A wave of piracy will couple with a race to the bottom in content prices. Some killer app, possibly Kindle for iPad, will capture a big chunk of the market share. It doesn’t much matter how it plays out, but paper books are going to be items of “significance” and the kind of thing hipsters trade, like vinyl records.
• All desktop software will seem obsolete overnight. The obsessive attention Apple has paid to aesthetics in the built-in reader, calendar, and email apps will set the bar not only for other app developers on the iPad, but also for the iPhone and particularly the Desktop. Expect your Mac to feel particularly creaky. And Windows? It’s gonna seem steampunk compared to the twee aesthetics and colors emerging in the iPad design universe.
• WiFi is going to become even more ubiquitous and free. Businesses are going to trip over themselves to get iPad users into their establishments, as the iPad rides its way to prominence. WiFi-only iPads are going to be somewhat cooler than the 3G versions.
• Hipsters are gonna start using iPads as cell phones, using Skype and similar apps to bypass carrier relationships altogether. I’d expect the 3G-iPads to be used for voice too, marking the first significant use of the cellular network in a “data-only” mode, which will ultimately lead to the scrapping of the whole “voice/voicemail/minutes” paradigm. The first carrier to do this will have a temporary competitive advantage.
• A whole new market in mouseless/keyboardless computing will emerge. Yeah, I don’t know what it’s going to look like either. But the raw numbers (100 million by 2015) of the iPad platform will create a new kind of pop/tech culture. Expect a New York Times Sunday magazine piece; potentially in that publications’ last print issue.
• The next generation Macintosh, if there is such a thing, will be based on the iPad OS. Hard to say what this might mean, but I would not be surprised if Mac OS was phased out over a few years, or possibly converted into a server-only OS for the MacPro / X-Serve platform only.

Remember that demand is not static waiting to be filled by the possible universe of devices: if that were the case, the iPod and the Mac and the iPhone should never really have gotten any traffic. What Apple understands is that good design can change the market, and invent new markets.

And this is what the iPad will do: invent a new market. And the presence of that new market will profoundly change the dynamics of the existing (previous) market. New demand will emerge, and all kinds of new supply will emerge. The great thing about Apple, particularly Jobs and Ive, is that they know how to drive change.

And that, ultimately, is what entrepreneurship and innovation are all about. If it were just about building devices to match the demands of the existing market, the Chinese seem to do a pretty good job of that.

And I will supply my banking information, so you can wire me the money, when this all comes to pass. If I’m wrong, I’ll buy you a beer.