olivergajek

So now we may just be about to see the birth of Google Gdrive. A long time in the making. According to Steven Levy’s book In the Plex this was originally ready to be be launched in 2008. 

What does this mean for users and, more importantly, for startups active in the areas of cloud storage and file management? Some bad news and some good news.

The bad news: Users will now expect copious amounts of cloud storage as a free commodity. If you’re a startup active in this space, expect the price expectations of your users to be very low indeed. Maybe there is a premium you can exact for whatever differentiates you, but it’s likely to be very very low. So I’d start to think long and hard about business customers if I were you. You disagree and feel that there is a robust business model adding value to consumer cloud storage? Let me know!

The good news: There is a whole bunch of stuff you can now offer to people who are moving their storage into the cloud:

• A RAID-controller that stripes data across several of these services to ensure accessibility in the case of outages or disasters (RAID 5) or to maximize the amount of available storage (RAID 0). Because the free storage available from any single provider will always be calibrated to be a lot but not enough, in order to force freemium conversion. (Excursion: In normal economics you’d expect competition to drive prices (or on this case storage allocation limits) lower, but since this is likely to end up as an oligopoly, we should expect to have a pretty stable pricing). 
• An encryption stack that makes sure that your data are safe in the cloud. This is easier said than done. Any robust solution would have to address a number of requirements:

1. use well-understood and generally accepted cryptography algorithms. No room for homegrown and obscure crypto.
2. require little or no footprint on the client. The less software to install the better.
3. will, in my opinion, have to be based on a zero-knowledge approach, whereby the keys never leave the jurisdiction of the end-user. This has both technical, and even more importantly, legal aspects that need to be addressed.
4. allow for transparent sharing of cloud content. Technically quite difficult.
5. come from a European provider, in order to be more palatable to the European customer. How cool is that!

As I said: I love Dropbox. No doubt about it.

So now the folks at TechCrunch and Fast Company are positively giddy over Dropbox announcing the ability to share files via links, by passing a unique URL to your intended recipient.

Which looks like it could be quite valuable for:

• ad-hoc sharing (where I don’t want to go through the trouble of setting up a shared Dropbox folder)
• for sharing with people who don’t use Dropbox (e.g. because they sit behind a corporate firewall).

Fast Company is even taking Microsoft and others to task for not coming up with this seemingly and elegant solution. Now that’s kind of a low blow.

Because Microsoft would not be able to deliver this type of minimal solution even if they tried. The reason is simple: This type of file-sharing will not always work and can get users into all sorts of quandaries, among them:

• Versioning mishaps, where you have an old link and I have created a new version in the meantime. And where I naively expect you to see the new version. But you don’t.
• Same for deletion.
• Forwarding mishaps, where you may have forwarded the link to a third party, who now has access to the file, but I really didn’t mean for that to happen. Think of how often you have had that happen with forwarded emails.
• Keeping track of the URLs that you have sent me so I can retrieve the files later on.
• If you send me several files then I will have to manually remember several storage locations. Unless you zip, of course. What a drag.

So here’s the dilemma: Microsoft could never deliver such an “incomplete” solution to their customers, because their reputation (and their cost basis for the support hotline) are on the line.

Dropbox, on the other hand, can just push ahead and deliver a solution that adds value but will not always work. Maybe users adapt and learn how to work with the potential limitations. Maybe users push back and then you pull the feature. No biggie, it’s a young product and most users are still early adopters.

Sounds like an unfair advantage for the insurgent over the incumbent!

Now this is funny in so many ways. From last week’s New Yorker magazine. An instant classic!

Lot of advice out there for people on how to start off a business relationship on the right foot and the importance of making a good first impression.

Sometime as simple as showing up on time and over-delivering on your first promise.

But this is not a one-way street:

You want to make a good first impression, but you also want to quickly find out who you are dealing with.

Here’s a simple suggestion: Give your new contact a gift. And see how they react. If they’re comfortable receiving a gift they will be comfortable giving back. If they’re uncomfortable and start squirming you instantly know that they will be hard to deal with and will not seek win-win solutions or even just split the difference.

Some suggest that you may want to use Facebook or LinkedIn profile to fill the airline seat next to you. I’m not convinced. Here’s an idea:

Why don’t we use Kinect or the like to get a quick body scan of people when they enter a venue or the check-in area and then we base the seat assignment on mixing and matching the chunky folks with the slender.

Watching my beloved Red Sox for the last three days (sweeping the Rays no less), I couldn’t help being impressed by the sheer size of some of the spectators behind home plate. Clearly there’s room for improvement.

I love Dropbox. Couldn’t live without it. You can pry it from my cold, dead hands.

But it’s still only the tip of the iceberg in functionality. With many more companies, most recently LogMeIn (with their Cubby service) entering the fray, we will hopefully see  a richer set of features that deliver what users really need. There’s a ton of entrepreneurial potential in this space and the race is far from over. Not to mention the specific requirements that non-US customers may have in the areas of security and regulatory compliance. More on that later.

Here’s what I want from my cloud storage provider:

Integration into my desktop that is easy to set up and easy to use. Think Dropbox. But: I also want the system to scan my network and discover attached drives and NAS drives. And to ask me to set up policies for these resources as well. And keep monitoring the network and keep reminding me to check the policies.

Whatever goes into the cloud should be filtered and encrypted.

Filtering policies may vary by user requirement. Possible parameters include file types and file sizes. I may have ripped a Blu-ray disc to my NAS and may not want 50 GB of easily replaceable material to be uploaded into the cloud. The price (storage size, upload bandwidth) is too high for the value.

Encrypted in this context is understood to mean zero-knowledge (aka operator-shielding) encryption. The keys don’t leave my control and the service provider cannot read my data. Period. Yes, this obviously has some interesting technical and, more importantly, legal implications. But I believe those can and need to be dealt with.

But this is not enough. Because I basically do not trust my cloud provider:

• to not read my data. Or to suffer a break-in. This is of course already taken care of by the zero-knowledge architecture.
• to not lose my data. Or the encryption keys. Or to just go bankrupt. Or offline.

So what I really want (no joke) is for a cloud-connected NAS box (think TimeCapsule) to sit somewhere in my network. This can be a 2nd-level cache of the cloud contents or, depending on usage scenarios, a local proxy for the cloud.

I will want to select if the data on that box are encrypted or not. If encrypted then I will want specific key management and recovery solutions. A variety of options come to mind.

I will also (at least I think I do) want the option of a second NAS box to serve as an off-site mirror for my local NAS box. And I’ll put that into another geographical location for complete disaster recoverability. And hook it to the network there so it can be updated all the time. This box I would like to stay encrypted at all times.

What would I pay? Well, a 3TB TimeCapsule currently retails for USD 499. I’d test the market with an appliance form factor and subscription-based pricing and I’d try out a price of USD 400 p.a. for the consumer edition and of USD 999 p.a. for the small business edition.

It seems that a regular inflection point in the lifecycle of a startup is the stage where the founders, who previously have been “managing” their company by the seat of their pants, have to transition from a very intuitive management approach to significantly more structure.

Which means that you have to learn how to organize, to delegate, to explain, and how to say No to people and opportunities.

As if that weren’t challenging enough, this transition and learning challenge may just happen simultaneously with or be brought about by new investors, with the founders (in more cases than not) now finding themselves with less than a majority shareholding.

So now you have founders who have to learn how to manage. Quickly. And who suddenly may not feel like they are (majority) owners anymore.

Left untreated, this can be a recipe for disaster. Worst-case scenarios include on the one hand an inability by the founding team to learn the management skills quickly enough, on the other hand emotional abdication because of the perceived reduction in ownership. Or, for extra credit, a combination of the two. Ouch!

While it is dangerous to generalize or to prescribe one-size-fits-all solutions, it seems that one of the fundamental problems that can be observed in these situations is that somewhere along the way the founders have lost sight of the size of their ambition.

If (!) I have a big and powerful vision for my unique and valuable contribution to solving a pressing and global problem for large and growing markets then it should be easy for me to restructure the business (possibly by bringing in more experienced management to fill in the gaps in the learning curve). And it should also be easy to appreciate my personal stake in the potential outcome of this adventure, regardless of relative percentage points.

If the founders cannot recover their vision and are unable to maintain their position at the center of the enterprise, both in terms of ethics/culture and in terms of market/product/benefit, then you have a real problem: A company with founders can always hire managers. A company whose founders have disengaged, on the other hand, will often have lost its soul and maybe even its will to live.

Lots of comments on Günter Grass and his “poem” on Israel and Iran. Actually more comments on the comments than on the piece itself. Which should not be surprising. Since last week all over the German press, where the interview with Marcel Reich-Ranicki in this Sunday’s FAS is especially remarkable for all sorts of reasons. And now we have the Economist chiming in, with a very welcome and thoughtful analysis.

My problems with the whole thing are elsewhere, though:

Regardless of whether you have a Nobel prize for literature or not, anybody and especially Günter Grass is more than welcome to comment on politics, domestic and abroad. If you use a poem, however, you are in fact claiming the authority of the artist and the prize winner. That is a whole different ballgame. Where you should be prepared for more-than-average reactions from the masses and where you will need to be thick-skinned enough to deal with it.

As a poem, or frankly as any kind of literature, the piece fails completely. The choice of format is particularly unfortunate as it allows the author to throw down some incomplete and incoherent statements and to skip reflection and explanation. A long-form piece of prose forces the writer to explain a position coherently and, more importantly, to consider and discuss alternative points of view. Even a letter to the editor would have had more merit than these fragments.

More important than the stylistic failure is the author’s complete failure to acknowledge that the current threat emanates from Iran and needs to be dealt with in some shape or form, preferably by peaceful means of course. To negate this fact is ludicrous and plays into the arms of Ahmadinejad. Which Netanyahu and company then exploit for domestic gain, resulting in the equally ludicrous travel ban.

So we have an incomplete and fragmented discussion that reinforces stereotypes and that is exploited by propagandists on all sides. Not helpful.

For a more balanced and more informed viewpoint I would recommend David Sanger’s recent interview on NPR.