A tale of Venture Capitalist Tragedy

Today Fred Wilson makes a plea for transparent audience-measurement across Web and Mobile (however the boundary is blurred).

To be clear Fred is a sparkling, open commentator and a man of integrity (to my knowledge) - so  this attack on his opinion is not ad hominem (far from it)   I have engaged with him and his many other intelligent (mostly) visitors at the fantastic waterhole on the web known as avc.com.

However, there is a constant clamor from amongst the "Investor" classes ( Venture Capital and Investment banking) for more metrics and transparency. This is a mistake !

Metrics are tools to help guide a ship - even the word to "log" is derived from the count taken as a log on a piece of string floats past a sail-ship in motion as the ancient speedometer.  David Skok explains brilliantly at forentrepreneurs.com how these metrics can be used - for example in the case of a SaaS business like ours.

When these metrics are made available to third-parties they make investment a "no-brainer"  and some VC's go as far as to say given metrics X,Y and Z they will deliver funds.

There is an implication that I would like to present.  Insofar as metrics de-skill an investment decision it is because they describe historical trends. 

These trends are created by the clients whether Consumer or Enterprise who collectively imply - "this concept has value" or traction as it is known. 

Investing on the basis of historical trend is known as technical trading, it can be fully automated where information is available (as in stock markets).  The cost of so doing can be shown to be a Tragedy of the commons to quote: 

"The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone's long-term interest for this to happen."

The reason that this is waste is simple - As long as investors invest on what is apparent from history, there is no Fundamental analysis and the state of human knowledge is not expanded (data is merely added and derived).

The extremely valuable role of the entrepreneur and venture capitalist is opposite to this. It is to take risk and depart from historical norms, to disrupt and thereby fundamentally enrich society, by applying imagination creativy and insights that are not obvious.  Against this risk a premium can and should be paid, with the reward going to he or she who delivers most.

If we pander to the markets, scrabbling for the monies they offer, we are effectively buying back what is ours and what we as a market create.  Therefore to invest in being investable, rather than to invest in enhancement, is nothing more or less than tragedy as described above.

I rather hope that Fred and his cohorts (cohort analysis is another business metric device) in the investment industry will reflect on the fact that they, in calling for investment in metrics to judge rather than to steer, are in danger of reducing the perception of value they normally offer to just another commodity.

Our bank-managers used to hold positions of discretionary authority. Those days are gone - the result is obvious to many. Don't go the same way - we as a society need your skills !

Top 5 Benefits - Tankless Hot Water Heaters

Hi - Today we get to sit back and read some thoughts by a guest blogger - lets see if he can fire up some interesting thoughts, so let me hand you over to ...

Kyle Brent, President OutdoorFurnaceSupply 

where they specialize in alternative heating and energy solutions. 

Benefits of Using Tankless Hot Water Heaters

There are infinite benefits of using a tankless hot water heater. Here are the top five reasons your household would benefit from having one in you home.

Electric bathroom continuous-flow water heater, electric three-phase alternating current instantaneous water heater with 18 kW Power,  (Photo credit: Wikipedia)

Hot Water for Everyone

The number one benefit of having a tankless water heaters is that no one in your family will be left with cold water. Tankless water heaters heat on demand only. There is no storage of water like a traditional water heater, so no matter if you want to take a 45-minute shower or bath, or ten people in your home who need to shower, no one will be left out, everyone will have the hot shower or bath that they deserve.

Cleaner Water

Legionella sp. under UV illumination (Photo credit Wikipedia)

Traditional water heaters store water. As water heaters age, they become dirty and rusty on the inside where the water is stored, which means the water you shower or bathe in comes from a container that is less than clean. This isn't true with tankless hot water heaters, instead the water is heated as it passes through the unit, which provides cleaner water that has never been stored for your hygiene needs. 

kWIQly  - this is also true for pathogens like Legionella which establish and grow in stagnant warm water - if inhaled in a shower or as a spray it's a killer !

Ditch the Bulky Water Heater

Due to its design, traditional water heaters can only be placed in a handful of places in a home. Often times, the placement of these water heaters can be inconvenient or an eyesore. However, with tankless water heaters you have the convenience of placing the compact heater nearly anywhere, which frees up space in your home for more important things.

Cutting Energy Costs

Since tankless water heaters do not require constant heating and reheating, they cost less to use. (And help the environment - kWIQly ) The amount of money you can save varies on how much energy you currently use to heat water, but no matter what your cost is, installing a tankless water heater will decrease it.

Less Fuss

Tankless water heaters require very little maintenance, due to their design, and are much more durable than traditional water heaters, which means it will last longer than its counterpart.

Tankless water heaters add both luxury and maintenance benefits to your home. Simply install a tankless water heater and forget about all the things you used to worry about with your traditional water heater.

So there we have it - a little wiser thanks to Kyle before you move on don't forget to ask any tough questions in the comments or add views of your own - for example who could debate  "The things that are wrong with tankless ! " 

- Not so much from my understanding - but help me out if you can!

I'm sure Kyle will be very glad to hear and answer your questions them and will appreciate your visits here or tomorrow at blog.outdoorfurnacesupply.com

Oak Tree Kiss Management Style

The English Oak is used figuratively
 to represent "Britishness"

An Oak is known for : 

his moral rectitude - "A Good Oak" - or he may be a politician, 

Many British pubs are called 'Royal Oak' such as this one in Fishguard, Wales (Photo credit: Wikipedia)

and for his strength of character - "A Sturdy Oak" - or stubborn inflexibility.


It is also the name of many a pub 627 'The Royal Oaks' at last count

One thing is clear - the Oak as a management style is straightforward - it is 

rather like the kiss principle, "do as I say" stated clearly with no room for doubt - 

but it can equally be simple and stupid.

If straightforward is a strength then so is flexibility, this leaves a choice. 

I read this somewhere...

"On matters of opinion, sway like a reed...
on matters on principle, stand like an oak"

Beautiful Oaks (Photo credit : unknown) click for original res.

We can illustrate the pros and cons using a very simple idea relating to this question. When should I switch my heating on ?

We assume comfort as an objective, and energy efficiency as a constraint.

In this diagram we see two rather different strategies showing start times for different months of the year in two English pubs.  

On the left - the OAK 

On the right the REED

Red shows peak energy use by time of day -
Rows are months - click to enlarge (Graphic credit kwiqly.com)

The OAK on the left starts just before opening at around 11:30, simple !


The REED is more flexible - heating starts later in summer and earlier in winter.  This is called start optimization:

Optimization sounds good doesn't it ? 

- almost ideal !

The REED starts heating between 03:00 and 06:00 right through the year - WHY ?

So flexibility is a good thing - but creates room for mistakes. Optimization is a useful feature, but is only a benefit when deployed in conjunction with the KISS idea of switching off when not needed at all !

In reality both of these pubs could save a good few beers, by rationalizing their expenditure and management strategy - but which would you choose as a default - The Oak or the Reed ? - And more importantly how do you like your beer ? let us know in the comments

Whether or not you drink beer - (we are flexible but we like it as a rule ! ) for energy management matters please do get in touch.

Denial "AND LIE" anagram for business

lake constance 2500K (Photo credit: tom_focus)

The following wise words are a recent favourite of mine.

In the original German by Martin Walser:

Wer mehr sagt, als er tut, predigt. 
Wer weniger sagt, als er tut, lügt. 
Wer sagt, was er tut, ist eitel. 
Wer tut, was er sagt, ist gut.

German writer Martin Walser during a book presentation in Aachen, Germany (Photo credit: Wikipedia)

I was given this by my colleague Andreas as we passed through the beautiful town of Wasserberg am Bodensee on our way to a meeting in Munich on a day that could almost have argued for climate change on its own .

In this sleepy village, Walser started his highly politicized literary life.  Until then, and like you now (perhaps), with Lake Constance looking glorious from the train, I had never heard them.

They came up as we discussed important company values and corporate culture (or we had been discussing) and this is certainly why I these words stuck.

In English (freely and not very poetically translated):

He who tells, more than he does, preaches.
He who tells, less than he does, lies.
He who tells, what he does, boasts.
He who does, what he says, is good.



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It is easy for us to tell others how they should do things, especially in our consultancy hats, and in our marketing hats; that we should always over-deliver on our promises. In reality, this is not always possible, so it smacks of hypocrisy or "holier than thou" - so we will try to keep the preaching to a minimum!


Sometimes we screw things up, and we find it hard to admit but I noticed;

denial is an anagram of "AND LIE" !

So we think it's better to admit the truth, ask for forgiveness and re-double our efforts.

When we are guilty of telling of our deeds and victories (and we do - see for example here), then we should restrain ourselves, but better to boast than to lie.

When we do deliver what we say we will deliver (and we aim very high) we may  feel a little self-righteous or act pleased with ourselves - and perhaps we should not - but surely we may feel good inside and we think that's fine.

If you can accept us " flaws and all " please get in touch.

If you can suggest more that we can aim for in terms of words and deeds - let us know in the comments and/or link up with me on Disqus and Engag.io.

So let me get you started with a great example from scripture (at risk of preaching:)
(wisdom is available from the bible to the schoolyard and it is welcome whatever the source  )


 - another James 2:18 wrote : 
Yea, a man may say, Thou hast faith, and I have works: shew me thy faith without thy works, and I will shew thee my faith by my works.

Unattainable, magical unicorn

Gilt statue of a unicorn on the Council House, Bristol (Photo credit: Wikipedia)

Compared to Magical - Is a classic Seth Godin Post which I've reproduced here for context
>>

Compared to magical

The easiest way to sell yourself short is to compare your work to the competition. To say that you are 5% cheaper or have one or two features that stand out--this is a formula for slightly better mediocrity.

The goal ought to be to compare yourself not to the best your peers or the competition has managed to get through a committee or down on paper, but to an unattainable, magical unicorn.

Compared to that, how are you doing?

>>

So a unicorn has a "point" - it is the key differentiation for being a magical unicorn. However, unlike unicorns we are fully attainable - drop us a line , but I don't think that's the point of this post...


Maybe its what could we be if we had all resources and no limitations. The funny thing is that's what we do have in the area in which we choose to specialise.


You do not have the time to step back from day-to-day core business to save energy - we do - its our job !


We have software and servers set up to enable us to grab information out of your energy data, make sense of it, visualize and interpret it - its what we are here for!


We don't sell coffee, operate on patients, go to war, manage a bunch of school children, house prisoners, run exhibitions, or do any of the things our clients do every day - so we are no better and not magical,

But in one sense we are a unicorn, the service we can give is as rare as rocking-horse manure - You just won't find it elsewhere for looking!

Less than Seven Rules Need to be Broken

Today I read Philip Auerswald's piece To Innovate, Play with Pieces Off the Game Board at The Harvard Business review blog. The theme is that if you want to innovate and disrupt an industry, you have to act differently, because the power players that already exist have a lock on the rules they play by. Therefore these are: Rules - Made to be Broken - so I wondered how much we like breaking rules as a small company. - Are we doing it enough ?

How do I love thee? Let me count the ways...
( poem by Elizabeth Barrett Browning 1806-1861 )

Equally I wonder who else is "breaking rules" to get business advantage or disrupt a commercial space, because these are people that are interesting.

It should be obvious, but breaking the rules does not mean anything underhand or unethical, but game-changing.  There are some big industries we deal with, for example energy utilities and construction, and they are not squeaky clean through and through - but we aim to be !

So I count 6 business rules we break (which is per the title less than seven) maybe you can suggest more ...

1) Startups hack code, spend long intense sessions together to eat pizza and drink coffee and break for "foosball".

Well we are based in UK, Switzerland, Germany and have five staff members, so we get together when we can, but we teamed up because we were the best we could find in our various niches.  There is a market for bright people in any big city and particularly Silicon Valley, New York, London, Berlin, but we didn't want a bunch of bright people - we wanted a team. Sure when we are bigger we may need an office, but we think a distributed model gives space to think, exposes us to different markets and cultures and regulatory frameworks, and creates strength in diversity.

2) We should excel in a specific business domain

Conventional wisdom is that you cannot compete in different disciplines simultaneously as a small company.  We disagree ! Our clients live in market silos where they excel.  Utility providers provide Energy, Facility Managers look after buildings, Control companies make electronics. In common there is a theme, they all compete on price for the provision of a commodity service or product, whether the deliverable is a kilowatt of electricity, a maintenance engineer, or a box of electronics none advertise a better kW, a better boilerman or a better universal device, because these things are necessarily market derived.

It is notable that all are delivered to buildings, and all relate to the efficiency of operation of that building.  We note that by deploying them more effectively, and being free to step outside traditional boundaries we can achieve more for less resources.  We help with energy, building services and controls, but we get them to "play better together" in the context of the client.  A commodity provider delivers a service like water through a hose, and it's either water, or its "not what we do", we don't sell water - we put out fires !

3) We should first conquer our home market.

Well if planet earth is our home market we would agree. But we are or have taken and analyzed data from, banks in Hong-Kong, castles in England, old peoples homes near the Rhine, universities in Switzerland, business schools in the US - The laws of physics seem to be the same wherever we go !

4) You need clear guidelines regarding staff terms and conditions

Guide yourself - Work when you feel you can contribute most, and while you feel fresh. Prioritize carefully, take holidays as you need them. It is not macho to need to work an eighty hour week (but it happens), it is not cool to slope of and go skiing when the powder is great (but it happens).

5) The client is always right

Nope - our job is to help, and saying you are right is not always helpful.  A client may want us to do different things where we have some competence - but if other clients want us to do things we are great at - they take priority.  So saying no is a very important way in which we maximize our contribution to our clients.  (This does not mean we cannot introduce someone who can help).

6) Protect your Intellectual Property

Our intellectual property walks out of the door when it is done for the day, and yes we seek to protect it .  But our methods , which are ahead of the market, and our strategies that save our clients money are the things that we share - Why ? because sharing is how we learn and we want to be best at learning.

So these are some of the ways we decide to take the freedom to be different - Do you do different too ? Why not add to our list of suggestions ...

The Princess and the Pea - Signal to Noise

The Princess and the Pea (Photo credit: Wikipedia)

I was having a restless night trying to figure out how I could explain pattern recognition to a seven year old.

Those who wonder why I was thinking about this have not had to deal with many accountants !

The story of the Princess and the Pea, by Hans Christian Andersen, stuck in my mind as a child at two levels (one is fictional).

At one level it was absurd to think that our Princess heroine, could be so fussy - I mean how impolite is that?  to complain about an uncomfortable bed when they've gone to all that work, but on the other hand, the world hates a hypocrite - I mean look at all of those European bankers recommending austerity !

However, as a child, my thoughts soon turned to the practical, I was ever the kind of child who took apart a toy to see how it worked and then lost interest...

Why bother putting something together if you know how  ? - No puzzle value whatsoever ! - "Sometimes a difficult child - School  Report 1970")

This led me to think (as an eight-year old), is it possible that a pea could be detected if there were an adverse signal-to-noise ratio. The answer at first consideration must be no, but then again if you are at a drinks party, you can hear people talk and understand them when there is a verbally adverse signal-to-noise ratio.  It should be impossible, but with the context, gesticulations, smiles, nods and so on the context supports your conjecture and somehow it all makes sense - or appears to - it depends on the booze. This explains why phone converstions are "harder" than face-to-face.

So - for your inner seven-year old  ( or your accountant) !

Adverse Signal To Noise = "With all those blankets, mattresses, and soft bed-clothing no-one could sense a pea

 - Not even a Princess!

In context -

"I have a suspicious prospective Mother-in-Law - hmm let me check the bedclothes"

 - voilà - Princess for the win !

At kWIQly - we uncover the peas that stop energy managers sleeping at night.

Sometimes we use sophisticated pattern recognition, other-times we just "know" something looks hinkey - thats what we are paid for !
 
If you have any cool explanations of scientific ideas that anyone could understand - let us know in the comments :)

Ferraris, Racehorses and Strawberry Tarts

A kWIQly drawn 'Top Hat'

Here's what we do...

Top Hat (Photo credit: lokarta)

We do drawings !

There is not much to the idea, it's in the execution.

People who want energy efficiency, need to find waste then fix it.

Finding waste is like spotting good curves (though not nearly as enjoyable).

All the curves are all in the right place or they aren't. Which is horrid to look at !

Ferrari 599 GTB Fiorano
(Photo credit: Wikipedia)

Ferrari (Photo credit: Wikipedia)

Moosewood strawberry mascarpone tart. (Photo credit: Wikipedia)

A racehorse and a strawberry tart don't look quite the same but both look as good like a Ferrari.

It's easy to see isn't it ?

So suppose you have some beautiful curves that indicate "Very Pretty" or "Not so Hot".

These are so called  "Top-hats" showing daily energy consumption profiles of two pubs .

Indiana Jones fedora from "the Kingdom of the Crystal Skull". (Photo credit: Wikipedia)

It's the best place to do research  - honest Guv !


It's easy to see the difference isn't it ?

One is super efficient - while the other just sucks: 

 -  but, it's harder to "measure" how "hattish" a hat is.

Even when one is more like Indiana Jones' fedora AFTER the stampede.

- That's our job.


Now suppose these are available from hundreds (or tens of thousands) of different buildings, some are open twenty four hours, some at the weekend, some are churches and synagogues and others prisons, and suppose they all have different "shapely" curves - and we can tell the difference.

Using pattern recognition, we  know what makes a "lovely shape", so it is possible to sort out

The Good, The Bad and The Ugly

If you can do that without even visiting the pub - though perhaps a tragedy in itself, it saves a lot of time and money visiting prisons, kindergartens, sellers of pet-rocks and etc.

Throw in some report-writing, a portfolio dashboard and prize-winning audit-ability for good measure, and you have something "So good - you could take her home to meet the folks !"

 We call her ...

Want to meet her - give as a call

kWIQly - Don't Panic

kWIQly - Don't Panic !

When disaster strikes, the first words you will hear are often "Don't Panic" often in a shrill panicky voice that is a million miles from calm deliberation.

This is when triage counts most. Triage is the process of classifying priorities according to some rationale to get maximum results from available resources.

That may more mean lives saved, valuable art saved from a flood, or preventing the spread of a forest fire by sacrificing some good wood and "back-burning to the fire".

All of the above call for rapid calm and clear assessment of the facts. Facts (or the "patients history") are taken, and based on  this predetermined optimal paths of  possible action are chosen.

Does this sound like an energy manager looking at a set of buildings for energy savings opportunity? - No ! - Well it should

kWIQly is there to assist the energy manager.  It doesn't make decisions, but it brings together evidence that drives clear decisions on how to save energy.

Often a choice is faced between :

1. Creating a flagship example.
2. Addressing one problem on a portfolio wide basis.
3. Treating the worst cases.

What this misses is the simple notion that some resources are specialized and some are general, and performance can be lifted by addressing specific issues from among an otherwise "fit" population.

We are really interested to hear how energy managers think panic can best be avoided, and we think we have some of the answers.  If you chose to contribute, we will share our combined insights and everyone benefits !