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Something Ventured:
July 9th

Insight For BC Technology Entrepreneurs

By Brent Holliday

The Kids Are Alright

"I hope I die before I get old " -The Who-My Generation

Above my desk, beyond the clutter of faded Dilbert cartoons, I have a photocopied picture that is about three years old. I don’t know where I got it, but it has always been there for me as an inspiration.  It’s a three-paned picture.  In the left pane is an older gentleman with gray hair, probably 60 years old, in a crumpled tweed blazer, with a tie and nice shoes.  In the middle pane is a late 30’s  guy with a wry smile, stylish glasses and he is dressed in a golf shirt and khakis.  In the last pane is an 18ish year old kid with a big grin, messy hair, flannel shirt and pants that are way too big.  Each is holding a sign.  For left to right, or old to young, the signs read: Mainframe, Client/server, Web.

I’m a web guy.  I got into this business partly because of my fascination with the Internet when I was just sending e-mail during my MBA.  The web is changing everything.  I’m right in the middle of it and I couldn’t be happier.  Therefore, I must be like the young guy, right?  Fantastically hip and riding the crest of the new wave.  So it is with great disdain that I look at the reflection in my computer monitor and see an early 30’s guy with stylish glasses, wearing a golf shirt and some khakis.  Aaaaaaaaaah!  It can’t be!  I’m a web guy!

Clothes don’t make the man.  

There, now I feel better.  

In my never-ending quest to stay relevant and avoid growing old and tired (metaphorically speaking), I conjured up a great idea for the summer.  I convinced my 19-year old baby brother to come out to Vancouver and live with us.  Bryce is a 2nd year computer science student at UWO in London.  Do you think he came here because I wanted to “hang” with him and be more “with it”?  No.  The real catch for Bryce was a job for 10 weeks at Electronic Arts, testing the latest video games.  EA hires summer students to help in Quality Assurance and Bryce landed a job.  It seems it is pretty much a dream job for a kid born in 1980.  Was he qualified for the job?  Let’s see.  He has a Sony Playstation, a Nintendo 64 and a Dell pentium 400 at home.  Before he could walk, he was playing Intellivision with his older brothers.

What can we learn from the bright-eyed 19-year-old with little experience in the real working world?  A lot.  A whole lot.  The Nintendo generation is seeing great opportunities in front of them.  The world’s economy has been on a huge roll since these guys and gals hit puberty.  They don’t know what a recession is.  They are very savvy and growing old very fast.   Just think about the things that they will never use: stock brokers, real estate or travel agents, real bricks and mortar banks, Sam the Record Man, nice leather daytimers.  They are entrepreneurial.  They are used to Internet time.  Any kid in a college or university technology program is likely to have his choice of jobs before he finishes school.  Demand is so high and labour markets so tight for talent, some kids are being recruited in high school.  What’s next?  An entry draft?  Player agents?  The future’s so bright, they gotta wear shades.

Who is responsible for turning the entire recorded music industry on its ear?  College and high school kids around the world who found it a lot easier to copy songs from their audio CDs into an MP3 format.  MP3 makes the sound files smaller without appreciable quality loss.  This, in turn, makes it easier to fire the songs off to friends and strangers via e-mail or FTP sites.  Once you have a few decent sources of tunes, you make your own mix of songs you like and “burn” a new CD.  I spent hours of my teenage and college life trying to make the perfect mix for parties, driving, studying or… well, you know, Barry White, Sade.  (Sorry, I was taking a moment)  Back then, I had to use the cassette deck.  The only source of content was what my roommates and I had in our collections.  Imagine an unlimited collection.  Now imagine that it’s free.  Well, almost (more on that below).  

Have you heard the latest?  There is a huge new black market in digital movies.  The unbelievable quality of the handheld digital video cameras has enabled a new underground copying of just-released films.  Want to see Star Wars, The Phantom Menace at home in full digital picture and sound on your TV, months before the release of the video version?  You can.  How do I know?  Ummmmm.  Just take my word for it.  Some guy went into the very first screening on May 19th and filmed the entire movie from his seat in the theatre.  He went home, streamed the video through his MPEG encoder hardware and software.  He split it up into downloadable chunks (video is very big still) and put it up on an FTP site.  To watch it on your TV, all you need is some simple shareware that takes the MPEG you downloaded and burns it right onto a CD, in DVD readable format.  Voila.  You have a DVD of the movie before the first day of full release in the theatres.

The most fascinating development in the whole MP3 sub-culture is really a product of the power of a completely free and open market.  Stay with me here.  I don’t want your eyes to glaze over.  The Internet, and bulletin boards before it, has enabled a new form of barter that the kids understand.  It is based on the principle of knowing more and knowing it faster than the other guy.  Programmers and hackers have been working this way for years, but it is the emergence of MP3 that is making a whole generation trade on the principle of having something or knowing something before anyone else.  You see, for obvious reasons, the guy with the Star Wars video isn’t advertising that he has it or wants to sell it.  If you have something he wants, say a Ricky Martin MP3 collection, he will allow you in to his site to upload your MP3s.  With your credits, he allows you to take a copy of the video.  In this world of information, the kids are clearly way ahead of the rest of us.  Unfortunately, they are also way ahead of the law. (The complete how-to of digital copying is at http://www.system-failure.com

The fact is that under current law, all of this is illegal.  I don’t believe that the younger crowd is morally bankrupt.  They just have access to incredible technology and ingenuity.  Most of all, they are connected to a huge group of like-minded individuals via the Internet.  They are learning things faster and are often more relevant than we give them credit for.  So don’t ever make the mistake of writing them off because they are too young, or too inexperienced.  

Any of us running a technology business should think about harnessing the incredible energy and enthusiasm that the younger kids have. Going back to the point that kids value knowledge and that their currency is having or holding information that others haven’t got, harnessing this talent to work for you means you have to offer them their currency.  Give them access to the latest information and help them build the knowledge.  Encourage them to innovate by giving them time to do more than repetitive grunt work usually doled out to the youngest and newest workers.

Electronic Arts is thriving on young employees.  They have built a shiny new facility to keep the workers happy. OK, that helps immensely. So does the fact that they are making entertainment.  That’s massively cool.  But they also have an open work environment that encourages friendly competition amongst groups and access to any information that the company has.  One employee, who used to work at another local game developer, marveled at the access to market research data from his desktop.  He went back and saw how many units sold of titles he made or worked on at the other firm.  He had never seen the actual numbers before.  It filled him with a sense of pride and accomplishment. My brother is motivated by the thirst to learn more.  A course in 3D rendering, one of many offered by the firm, will make him the envy of all of his buddies at school.

If your workforce is a lot of mainframe and client/server type folks, maybe it’s time for a little drink from the fountain of youth. They can teach you a lot.  I’m looking forward to listening all summer.

Random Thoughts

– Jeff Skoll, VP at eBay, brand new billionaire and fellow Canadian, just gave $7.5 million to U of Toronto to set up a joint engineering and MBA program.  It’s a great idea to marry technology savviness with business acumen.  Haig Farris has been running a course at UBC doing exactly that for 7 years.  I should know. I was in it and now I’m a mentor.  Jeff thought he would give a little back.  So, I thought I’d see how little.  He is currently worth $7.1 billion CDN.  He just gave U of T one tenth of one percent of his net worth.  OK.  Good.  My $200 contribution to my alma mater is right in line.  Only, I don’t think I’ll get a building named after me.

- Oh God.  Now the Convention Center.  Doesn’t it just make you want to cry?  Glen, you have the anti-Midas touch.  Anything you touch turns into a complete boondoggle.  You didn’t go near the weatherman this summer by any chance?  Seriously, the failure of a convention center to get started will hurt the technology scene.  Having high profile events, like developer conferences and huge trade shows helps display the local tech scene to the world.  Well, not for a long while it appears.  Is it possible to get no votes in an election?

- A great primer for what it takes to succeed as a Net based startup today can be found at Business 2.0  www.business2.com/articles/1999/07/content/startup.html  I think that most of the points are bang-on.  A must review before careening off on your new Net start-up career.

What Do You Think? Talk Back To Brent Holliday

Something Ventured is a bi-weekly column designed to supplement the T-Net British Columbia web site with some timely, relevant and possibly irreverent insight into the industry. I hope to share some of the perspective and trends that I see in my role as a VC. The column is always followed by feedback (if its positive or constructive. I'll keep the flames to myself, thanks).

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