My Day Zero Mo.
Author: Joe
Senior Director of Developer Relations, MongoDB
Microsoft : How many of these mouse are sold globally (at what cost?)
I bought this mouse today in town. Got it home and finally managed to break through the packaging to the tiny contents. Not very green.
Cloud Computing Cost Models : Don’t Sweat It
I get asked reasonably often to help companies and individuals come up with a cost model for their cloud computing. People get really exercised about the cost of hundreds of compute nodes and terabytes. I know what these models should look like because I built and insanely complex model for PutPlace in 2006 when we founded the company and decided to deploy it on Amazon. I had the same concerns that most people had, was I building a business that was going to explode in my face because I had made some fundamentally flawed economic assumptions?
Once we launched PutPlace we rapidly discovered a number of interesting facts about our cost structures. The first one was that in a small online business such as PutPlace the compute costs dominate to the point that storage, bandwidth and transaction costs are essentially rounding errors. The second thing we discovered is that attracting enough users to move the needle from a compute perspective is “ahem” challenging for most companies. With consistent upload rates of over 10k files per day (with occasional peaks exceeding 100k files daily) our grid wasn’t even breaking a sweat. We had absolutely no red-line events on compute and of course AWS happily absorbed everything we threw at it without blinking.
Even at the end of 2008 when the service had been up and running for 6 months over 75% of our costs were compute nodes.
So if you want to understand your cost basis a very simple model is to work out the number of compute nodes you want to run, price those nodes in AWS (or Slicehost or Rackspace) and use that as a monthly cost model for your whole environment. Once you have a few months of price data, you can subtract your compute costs to find out your variable costs in storage, transactions and bandwidth (which I’m betting will be marginal). Now you have the marginal costs you can compute your variable cost per active user and now you know what your cost-plus price model basis is for each user.
You should still analyse your bill once a month to prevent surprises (like when we discovered we had 12 months of database snapshots taken at 5 minute intervals that no one was cleaning up) and to understand how the dynamics of your system are changing, but your key focus should be on your overall business model and your customer acquisition strategy.
Think of cloud computing like any other variable cost in your business, when you are small they are marginal (have you every priced up electricity usage in your startup financials?) and if you get big it just becomes a cost of doing business, so don’t sweat it!
(Most of the above applies equally well to building a “scalable” system, NoSQL boosters should take note!)
Going Local vs Going Global when Outsourcing
I did a presentation called “A Cheap Date with Cloud Computing” at the a French Chamber of Commerce event last Thursday .
A cheap date with cloud computinghttp://static.slidesharecdn.com/swf/ssplayer2.swf?doc=acheapdatewithcloudcomputing-101001041610-phpapp01&stripped_title=a-cheap-date-with-cloud-computing&userName=jdrumgoole
View more presentations from Joe Drumgoole.
During the presentation I made an off the cuff comment about staying away from Irish outsourcing companies because they were too expensive. This comment was reported by Chris Horn which elicited some responses online.
Twitter is not a good medium for debate so I thought I would clarify my comments.
- Irish web design/dev shops are more expensive than overseas suppliers and they all seem to get business, so more power to them. This is free market economics at its best.
- Overseas is not just India/China. You can find good, low cost developers much closer to home within two or three timezones of Ireland
- The tech requirements for the audience at The French Chamber of Commerce (primarily SMEs and mostly non tech sector) is limited in scope and doesn’t require high powered (i.e. expensive) design skills or code cutting capability
If you are building genuinely novel software for a new or emerging market using agile techniques then there is some argument for going local because proximity to your development team is a key requirement.
However even in those projects a significant amount of “grunt” work is required (building wordpress themes, connecting payment engines, porting software to different platforms etc.). This work is an ideal candidate for outsourcing and Odesk and Elance do an excellent job of providing a marketplace for lowering the cost of these activities.
As for design work, well I will never ever source startup logos from anywhere other than 99designs.com, end of.
Dublin Startup Weekend @ The NDRC
Oct 1st to 3rd
Don’t forget to book tickets for Dublin Startup Weekend 1st – 3rd Oct @ http://dublin.startupweekend.org/
BOOKING CLOSES 29th SEP
This event is an intense 54-hour event that brings together people with great ideas for web or mobile apps together to develop them from concepts to operational, launch-ready systems over the weekend.
We’re seeking a good mix of developers, designers, bus dev, marketers, and all round innovators, to make this event bigger and better than the last one.
The last event resulted in the incorporation of 3 start-up companies, all still working to develop their products, and everyone who took part (whether they went on to start-up or not) spoke of the value of the weekend.
• To register, visit: http://dublin.startupweekend.org/
• To express your interest, see who else is interested, and receive updates on the event over the coming weeks, visit:http://events.linkedin.com/Startup-Weekend-Dublin/pub/402541
• To read about the event in Silicon Republic, visit: http://www.siliconrepublic.com/start-ups/item/17540
Tickets cost €75 and numbers are limited.
Revahealth.com Changes its Name to Whatclinic.com
I used to slag my buddy Caelen King about the crappy name he chose for his medical tourism search engine RevaHealth.com. Well, he bit the bullet recently and changed the name to the much better whatclinic.com. He also shared some great stats with me,
- Whatclinic.com now has over half a million visitors a month up from 190,000 at the start of the year
- Every day 800 people submit email inquiries to clinics on our site an an additional 900 people call clinics on our site.
- The main treatment categories being looked for are; dental, doctors plastic and beauty
- The average treatment value being looked for €2,000
- We do business in 20 different countries
- UK is now our strongest market and is growing exceptionally well
Whatclinic.com doesn’t just do overseas, it covers Ireland. For instance here are searches for Dublin and Newry.
With Anglo just having dropped another 8.2bn this quarter its great to see a business thriving amidst all the misery and woe.
Here’s a slideshare of Caelen that shows how they go about there business.
iGAP – Internet Growth Acceleration Program – Apply Already!
You’re an Entrepreneur, right? You want to know how to do your business right? Right?
Ok, well get your ass over to the Enterprise Ireland and apply for the iGAP program. I attended this six month program last year and it was quite simply the best enterpreneur training I have ever done and you are talking to a guy who has been on a lot of training programs in the past few years.
Why is is so great? Well its designed to help people build online businesses. It has and outstanding posse of trainers including Ed Bussey (COO of Zyb), Jonathan Dillon (ex M&A at Yahoo), Sean Ellis (Marketing at Logmein, Drobox and Uproar Games), Oren Michels (CEO at Mashery) and a host of local experts.
The whole program is run by Brian Caulfield who may be the single most successful serial entrepreneur of our generation.
You couldn’t pay these guys to give you 30 minutes of their time normally, but each one of them has offered up several days of his time to give an oversight of their particular area of expertise.
You will leave iGAP with a killer pitch deck and the ability to deliver it, a believeable business model and customer acquisition plan and the knowledge that it has all be vetted and reviewed by some of the best in the business.
You have got to have rocks in your head the size of Gibraltar not to apply today. Go, now!
Morgan Kelly injects fear and loathing into the Irish Bank System
I highly recommend that anyone who cares about the irish economy to read Morgan Kelly‘s “The Irish Credit Bubble” (pdf link).
You need to blow past the economic formula in the first few pages and get into the meat of the analysis. In summary, in 2009 we opened our main parachute and a grand piano popped out in its place. In 2010 we will open the reserve ‘chute to find an anchor attached.
Some nice quotes:
“The destruction of the Irish entrepreneurial class may prove one of the most enduring and costly consequences of the property bubble”
“The mis-management of Irish financial institutions was amplified by the presence of a genuinely rogue bank, Anglo Irish”
“Since the seventeenth century, financial innovation has consisted in banks finding new ways to lose money”
“However, the question remains of why, given that Ireland’s bankers were probably no more reckless, its regulators no more spineless, and its politicians no more clueless than their counterparts elsewhere, how did Ireland come to have a far larger credit boom than other wealthy economies, with the exception of Iceland?”
“The issue therefore is not whether the Irish bank bailout will restore the Irish banks so that they can function as independent commercial entities: it cannot. Rather it is whether the Irish government’s commitments to bank bond holders when added to its existing spending commitments, will overwhelm the fiscal capacity of the Irish state, forcing outside entities such as the IMF and EU to intervene and impose a resolution on the Irish banking system”
Read it and weep.
NDRC Call for Project Proposals – Up to 100% funding Available
From the National Digital Research Centre website:
CALL FOR PROPOSALS
The NDRC is currently calling for project proposals under three newly launched programmes:
Entrepreneurial Internships Programme
CTR Feasibility Programme
Collaborative Translational Research Programme
1. Entrepreneurial Internships: This programme is designed to develop small scale projects with aspiring entrepreneurs to produce commercially focused applications in the web and mobile space. This investment programme is an avenue for individuals or small teams with links to a third level institution to pursue potential opportunities from idea to application in a supportive environment and among a set of peers. For more information about our Entrepreneurial Internship programme visit this page.
2. CTR Feasibility projects: We are investing in a programme to develop projects with established academics and companies that are potential collaborative translational research projects, but would benefit from upfront problem-solution and market validation. The focus of projects within the programme will be in the areas of health, education, entertainment and the environment. For more information about our CTR Feasibility programme visit this page.
3. Collaborative Translational Research projects: Having built a portfolio of collaborative translational research projects, the National Digital Research Centre is embarking on a second investment phase in further collaborative translational research. As such, the NDRC is seeking to facilitate further collaborations between established academics and industry partners to develop commercially-focused research projects in the application areas of health, education, entertainment and the environment.
In this specific call, the NDRC is particularly interested in receiving proposals for environmental technologies – specifically targeted at energy efficiency as distinct from green energy generation – in a digital context. We are not, however, excluding good ideas in other digital application areas. For more information about our Collaborative Translational Research programme visit this page.
To register and access online forms for all of these programmes visit this page.
TechCrunch 50 2009 – The Good, The Bad and The Ugly
I attended TechCrunch 50 this year alongside my business partner Eamon Leonard and another presenting company, VidSchool which Sean Fee of Ifoods/LookandTaste fame is involved in.
Pat Phelan originally intended to join and we booked a Monster House on Fillmore and Fulton. Pat (the consummate deal maker) had to pull out at the last moment which left Eamon and I (of CloudSplit) sharing this mansion with Paul, Moneesh and Sean of VidSchool.
As failed entrants to the onstage event we had both been offered slots in the DemoPit. You get one day to showcase your company in a separate area from the stage through which the attendees have to pass to get to the auditorium. We chose Tuesday (as opposed to Monday) this gave us a chance to attend on Monday and suss the place our prior to our full day.
Tuesday duly arrived and we headed down to the show. Its a brutal schedule with the show opening at 7.00am and running until 7.00pm the following evening. There is lots of advice to absorb on how best to pitch at TC50, but we followed some simple rules,
- Bring a pull up stand and put your message and pitch all in the top third. Nobody can see below this point. Many of the TC50 companies only used the default table logo provided by TC50. I found myself ignoring companies when I could not discern what the offering was.
- We brought along some tic-tacs that happened to be in the company colours. I don’t thing they got people to come up to our stand but being able to give something to people who listened did leave the whole presenting transaction with a nice soft end.
- You need two people. Otherwise food breaks/toilet visits leave the stand unmanned. There is always action in the DemoPit area so someone needs to be on stand at all time.
- Be prepared to get you pitch away in a few minutes
The Good
We went looking for validation of the CloudSplit offering and received that whole heartedly. We met key influencers at the investor, partner and customer level. This level of exposure to people WHO-REALLY-KNOW the software sector was invaluable.
Just the opportunity to present 200 times or more to genuinely insightful individuals who could really grasp what we were doing was a fantastic education. We now have a crystal clear vision of what we need to do in V1.0 and a goto market strategy honed by hours of feedback.
It also helped that the universal feedback was that CloudSplit was genuinely breaking new ground in a valuable and emerging market.
I would definitely target and time the launch of any new company so that it aligned with TC50.
The Bad
The DemoPit works as a competition in which the conference attendees get chips which they donate to the most interesting projects. The two with the most chips on each day get to present the product on stage. Its a nice idea but is open to all sorts of gaming ranging from booth hotties simply trading on their looks and accosting people for chips without pitching to wholesale buying of chips. Basically you can forget getting on stage on merit alone.
I can’t fix the booth hottie problem but it should be easy enough to fix the chip buying problem by making the containers piggy banks rather than jars so that once chips are donated they can’t be retrieved to be resold.
I also think there would be more liquidity in the market if the attending companies were compelled to donate their chips to other companies rather then bunging them into their own jar. This could be achieved by only giving chips to DemoPit companies on the day they are *not* presenting.
On plus side we got our first chip quite early on from Mark Kvamme of Sequoia so we really did care too much about winning or losing the competition after that piece of validation.
The Ugly
The awards ceremony was a shambolic disgrace. Mike Arrington threw all his toys out of the pram and stormed of stage. Why ? Who cares. It was an insult to the winners of the awards and made Arrington the story instead of the winners. It soured the whole event for me.
If I was Mike I’d be keeping a pretty low profile as well.
Copacetic 