New Economics Theories for the new Tech World

When I was doing my MBA (a decade ago), one of the principal theories on why corporations exist was 1) Shareholder Value creation (grow wealth for investors) and a notable second was 2) Stakeholder Value creation- creating jobs for societies, providing tax to countries, providing employees with stable employment and incentives,  and of course creating monetary value for shareholders.

There were two ways you could raise money- debt or equity. Debt had the advantage of interest payments being tax deductible. Debt payments had to be met regularly. Equity had the advantage that equity holders were the last ones to be paid in case of closing the company down, which justified that rate of return on equity is generally higher than cost of debt.  Dividend payouts to stockholders could be deferred in a low revenue year or due to planning reasons.

Or in plain English, over the long term borrowing money from share holders in lieu of stocks was more expensive than selling bonds or borrowing from the banks.

Hybrid combinations of debt and equity were warrants and debentures that started off as one form of instrument and over a period of time gave much more flexibility and risk safety nets to both issuers and subscribers of capital. Another hybrid was stock options (now considered as a default option of rewarding employees in technology companies, but this was not always the case).

The use of call and put options in debentures, and the idea of vesting period in stock options was to promote lone term stability and minimize fluctuations in stock prices, employee attrition, besides of course to minimize the weighted average cost of capital. Venture capital was another class of capital known for both huge rates of return and risk taking (?)

But in today’s world where a Google has three classes of shares, companies trade shares before IPOs, and valuations of technology companies sink and rise by huge % over weeks (especially as they near IPO dates)- I wonder if traditional theories in finance need a much stronger overhaul.

or do markets need a regulatory overhaul, that would enable stock exchanges to have once more the credibility they had as the primary sources of raising capital.

 

Who will guard the guardians? Their conscience- the regulators or the news media?

There are ways of raising money that are not evil.

But they are not perfectly fair as well.

Interview: Hjálmar Gíslason, CEO of DataMarket.com

Here is an interview with Hjálmar Gíslason, CEO of Datamarket.com  . DataMarket is an active marketplace for structured data and statistics. Through powerful search and visual data exploration, DataMarket connects data seekers with data providers.

 

Ajay-  Describe your journey as an entrepreneur and techie in Iceland. What are the 10 things that surprised you most as a tech entrepreneur.

HG- DataMarket is my fourth tech start-up since at age 20 in 1996. The previous ones have been in gaming, mobile and web search. I come from a technical background but have been moving more and more to the business side over the years. I can still prototype, but I hope there isn’t a single line of my code in production!

Funny you should ask about the 10 things that have surprised me the most on this journey, as I gave a presentation – literally yesterday – titled: “9 things nobody told me about the start-up business”

They are:
* Do NOT generalize – especially not to begin with
* Prioritize – and find a work-flow that works for you
* Meet people – face to face
* You are a sales person – whether you like it or not
* Technology is not a product – it’s the entire experience
* Sell the current version – no matter how amazing the next one is
* Learn from mistakes – preferably others’
* Pick the right people – good people is not enough
* Tell a good story – but don’t make them up

I obviously elaborate on each of these points in the talk, but the points illustrate roughly some of the things I believe I’ve learned … so far 😉

9 things nobody told me about the start-up business

Ajay-

Both Amazon  and Google  have entered the public datasets space. Infochimps  has 14,000+ public datasets. The US has http://www.data.gov/

So clearly the space is both competitive and yet the demand for public data repositories is clearly under served still. 

How does DataMarket intend to address this market in a unique way to differentiate itself from others.

HG- DataMarket is about delivering business data to decision makers. We help data seekers find the data they need for planning and informed decision making, and data publishers reaching this audience. DataMarket.com is the meeting point, where data seekers can come to find the best available data, and data publishers can make their data available whether for free or for a fee. We’ve populated the site with a wealth of data from public sources such as the UN, Eurostat, World Bank, IMF and others, but there is also premium data that is only available to those that subscribe to and pay for the access. For example we resell the entire data offering from the EIU (Economist Intelligence Unit) (link: http://datamarket.com/data/list/?q=provider:eiu)

DataMarket.com allows all this data to be searched, visualized, compared and downloaded in a single place in a standard, unified manner.

We see many of these efforts not as competition, but as valuable potential sources of data for our offering, while others may be competing with parts of our proposition, such as easy access to the public data sets.

 

Ajay- What are your views on data confidentiality and access to data owned by Governments funded by tax payer money.

HG- My views are very simple: Any data that is gathered or created for taxpayers’ money should be open and free of charge unless higher priorities such as privacy or national security indicate otherwise.

Reflecting that, any data that is originally open and free of charge is still open and free of charge on DataMarket.com, just easier to find and work with.

Ajay-  How is the technology entrepreneurship and venture capital scene in Iceland. What things work and what things can be improved?

HG- The scene is quite vibrant, given the small community. Good teams with promising concepts have been able to get the funding they need to get started and test their footing internationally. When the rapid growth phase is reached outside funding may still be needed.

There are positive and negative things about any location. Among the good things about Iceland from the stand point of a technology start-up are highly skilled tech people and a relatively simple corporate environment. Among the bad things are a tiny local market, lack of skills in international sales and marketing and capital controls that were put in place after the crash of the Icelandic economy in 2008.

I’ve jokingly said that if a company is hot in the eyes of VCs it would get funding even if it was located in the jungles of Congo, while if they’re only lukewarm towards you, they will be looking for any excuse not to invest. Location can certainly be one of them, and in that case being close to the investor communities – physically – can be very important.

We’re opening up our sales and marketing offices in Boston as we speak. Not to be close to investors though, but to be close to our market and current customers.

Ajay- Describe your hobbies when you are not founding amazing tech startups.

HG- Most of my time is spent working – which happens to by my number one hobby.

It is still important to step away from it all every now and then to see things in perspective and come back with a clear mind.

I *love* traveling to exotic places. Me and my wife have done quite a lot of traveling in Africa and S-America: safari, scuba diving, skiing, enjoying nature. When at home I try to do some sports activities 3-4 times a week at least, and – recently – play with my now 8 month old son as much as I can.

About-

http://datamarket.com/p/about/team/

Management

Hjalmar GislasonHjálmar Gíslason, Founder and CEO: Hjalmar is a successful entrepreneur, founder of three startups in the gaming, mobile and web sectors since 1996. Prior to launching DataMarket, Hjalmar worked on new media and business development for companies in the Skipti Group (owners of Iceland Telecom) after their acquisition of his search startup – Spurl. Hjalmar offers a mix of business, strategy and technical expertise. DataMarket is based largely on his vision of the need for a global exchange for structured data.

hjalmar.gislason@datamarket.com

To know more, have a quick  look at  http://datamarket.com/

Interview Markus Schmidberger ,Cloudnumbers.com

Here is an interview with Markus Schmidberger, Senior Community Manager for cloudnumbers.com. Cloudnumbers.com is the exciting new cloud startup for scientific computing. It basically enables transition to a R and other platforms in the cloud and makes it very easy and secure from the traditional desktop/server model of operation.

Ajay- Describe the startup story for setting up Cloudnumbers.com

Markus- In 2010 the company founders Erik Muttersbach (TU München), Markus Fensterer (TU München) and Moritz v. Petersdorff-Campen (WHU Vallendar) started with the development of the cloud computing environment. Continue reading “Interview Markus Schmidberger ,Cloudnumbers.com”

Business Intelligence and Stat Computing: The White Man's Last Stand

Unknown White Male
Image via Wikipedia

Name an industry in which top level executives are mostly white males, new recruits are mostly male (white or Indian/Chinese), women are primarily shunted into publicity relationships, social media or marketing.

Statistical Computing And Business Intelligence are the white man’s last stand to preserve an exclusive club of hail fellow well met and lets catch up after drinks culture. Newer startups are the exception in the business intelligence world , but  a whiter face helps (so do an Indian or Chinese male) to attract a mostly male white venture capital industry.

I have earlier talked about technology being totally dominated by Asian males at grad student level and ASA membership almost not representing minorities like blacks and yes women- but this is about corporate culture in the traditional BI world.

If you are connected to the BI or Stat Computing world, who would you rather hire AND who have you actually hired- with identical resumes

White Male or White Female or Brown Indian Male/Female or Yellow Male/Female or Black Male or Black Female

How many Black Grad Assistants do you see in tech corridors- (Nah- it is easier to get a  hard working Chinese /Indian- who smiles and does a great job at $12/hour)

How many non- Asian non white Authors do you see in technology and does that compare to pie chart below


racist image Pictures, Images and Photos

Note_ 2010 Census numbers arent available for STEM, and I was unable to find ethnic background for various technology companies, because though these numbers are collected for legal purposes, they are not publicly shared.

Any technology company which has more than 40% women , or more than 10% blacks would be fairly representative to the US population. Anecdotal evidence suggests European employment for minorities is worse (especially for Asians) but better for women.

Any data sources to support/ refute these hypothesis are welcome for purposes of scientific inquiry.

racist math image Pictures, Images and Photos

Business Intelligence and Stat Computing: The White Man’s Last Stand

Unknown White Male
Image via Wikipedia

Name an industry in which top level executives are mostly white males, new recruits are mostly male (white or Indian/Chinese), women are primarily shunted into publicity relationships, social media or marketing.

Statistical Computing And Business Intelligence are the white man’s last stand to preserve an exclusive club of hail fellow well met and lets catch up after drinks culture. Newer startups are the exception in the business intelligence world , but  a whiter face helps (so do an Indian or Chinese male) to attract a mostly male white venture capital industry.

I have earlier talked about technology being totally dominated by Asian males at grad student level and ASA membership almost not representing minorities like blacks and yes women- but this is about corporate culture in the traditional BI world.

If you are connected to the BI or Stat Computing world, who would you rather hire AND who have you actually hired- with identical resumes

White Male or White Female or Brown Indian Male/Female or Yellow Male/Female or Black Male or Black Female

How many Black Grad Assistants do you see in tech corridors- (Nah- it is easier to get a  hard working Chinese /Indian- who smiles and does a great job at $12/hour)

How many non- Asian non white Authors do you see in technology and does that compare to pie chart below


racist image Pictures, Images and Photos

Note_ 2010 Census numbers arent available for STEM, and I was unable to find ethnic background for various technology companies, because though these numbers are collected for legal purposes, they are not publicly shared.

Any technology company which has more than 40% women , or more than 10% blacks would be fairly representative to the US population. Anecdotal evidence suggests European employment for minorities is worse (especially for Asians) but better for women.

Any data sources to support/ refute these hypothesis are welcome for purposes of scientific inquiry.

racist math image Pictures, Images and Photos

Scoring SAS and SPSS Models in the cloud

Outline of a cloud containing text 'The Cloud'
Image via Wikipedia

An announcement from Zementis and Predixion Software– about using cloud computing for scoring models using PMML. Note R has a PMML package as well which is used by Rattle, data mining GUI for exporting models.

Source- http://www.marketwatch.com/story/predixion-software-introduces-new-product-to-run-sas-and-spss-predictive-models-in-the-cloud-2010-10-19?reflink=MW_news_stmp

——————————————————————————————————–

ALISO VIEJO, Calif., Oct 19, 2010 (BUSINESS WIRE) — Predixion Software today introduced Predixion PMML Connexion(TM), an interface that provides Predixion Insight(TM), the company’s low-cost, self-service in the cloud predictive analytics solution, direct and seamless access to SAS, SPSS (IBM) and other predictive models for use by Predixion Insight customers. Predixion PMML Connexion enables companies to leverage their significant investments in legacy predictive analytics solutions at a fraction of the cost of conventional licensing and maintenance fees.

The announcement was made at the Predictive Analytics World conference in Washington, D.C. where Predixion also announced a strategic partnership with Zementis, Inc., a market leader in PMML-based solutions. Zementis is exhibiting in Booth #P2.

The Predictive Model Markup Language (PMML) standard allows for true interoperability, offering a mature standard for moving predictive models seamlessly between platforms. Predixion has fully integrated this PMML functionality into Predixion Insight, meaning Predixion Insight users can now effortlessly import PMML-based predictive models, enabling information workers to score the models in the cloud from anywhere and publish reports using Microsoft Excel(R) and SharePoint(R). In addition, models can also be written back into SAS, SPSS and other platforms for a truly collaborative, interoperable solution.

“Predixion’s investment in this PMML interface makes perfect business sense as the lion’s share of the models in existence today are created by the SAS and SPSS platforms, creating compelling opportunity to leverage existing investments in predictive and statistical models on a low-cost cloud predictive analytics platform that can be fed with enterprise, line of business and cloud-based data,” said Mike Ferguson, CEO of Intelligent Business Strategies, a leading analyst and consulting firm specializing in the areas of business intelligence and enterprise business integration. “In this economy, Predixion’s low-cost, self-service predictive analytics solutions might be welcome relief to IT organizations chartered with quickly adding additional applications while at the same time cutting costs and staffing.”

“We are pleased to be partnering with Zementis, truly a PMML market leader and innovator,” said Predixion CEO Simon Arkell. “To allow any SAS or SPSS customer to immediately score any of their predictive models in the cloud from within Predixion Insight, compare those models to those created by Predixion Insight, and share the results within Excel and Sharepoint is an exciting step forward for the industry. SAS and SPSS customers are fed up with the high prices they must pay for their business users just to access reports generated by highly skilled PhDs who are burdened by performing routine tasks and thus have become a massive bottleneck. That frustration is now a thing of the past because any information worker can now unlock the power of predictive analytics without relying on experts — for a fraction of the cost and from anywhere they can connect to the cloud,” Arkell said.

Dr. Michael Zeller, Zementis CEO, added, “Our mission is to significantly shorten the time-to-market for predictive models in any industry. We are excited to be contributing to Predixion’s self-service, cloud-based predictive analytics solution set.”

About Predixion Software

Predixion Software develops and markets collaborative predictive analytics solutions in the public and private cloud. Predixion enables self-service predictive analytics, allowing customers to use and analyze large amounts of data to make actionable decisions, all within the familiar environment of Excel and PowerPivot. Predixion customers are achieving immediate results across a multitude of industries including: retail, finance, healthcare, marketing, telecommunications and insurance/risk management.

Predixion Software is headquartered in Aliso Viejo, California with development offices in Redmond, Washington. The company has venture capital backing from established investors including DFJ Frontier, Miramar Venture Partners and Palomar Ventures. For more information please contact us at 949-330-6540, or visit us atwww.predixionsoftware.com.

About Zementis

Zementis, Inc. is a leading software company focused on the operational deployment and integration of predictive analytics and data mining solutions. Its ADAPA(R) decision engine successfully bridges the gap between science and engineering. ADAPA(R) was designed from the ground up to benefit from open standards and to significantly shorten the time-to-market for predictive models in any industry. For more information, please visit www.zementis.com.

 

KXEN Update

Update from a very good data mining software company, KXEN –

  1. Longtime Chairman and founder Roger Haddad is retiring but would be a Board Member. See his interview with Decisionstats here https://decisionstats.wordpress.com/2009/01/05/interview-roger-haddad-founder-of-kxen-automated-modeling-software/ (note images were hidden due to migration from .com to .wordpress.com )
  2. New Members of Leadership are as-
John Ball, CEOJohn Ball
Chief Executive Officer

John Ball brings 20 years of experience in enterprise software, deep expertise in business intelligence and CRM applications, and a proven track record of success driving rapid growth at highly innovative companies.

Prior to joining KXEN, Mr. Ball served in several executive roles at salesforce.com, the leading provider of SaaS applications. Most recently, John served as VP & General Manager, Analytics and Reporting Products, where he spearheaded salesforce.com’s foray into CRM analytics and business intelligence. John also served as VP & General Manager, Service and Support Applications at salesforce.com, where he successfully grew the business to become the second largest and fastest growing product line at salesforce.com. Before salesforce.com, Ball was founder and CEO of Netonomy, the leading provider of customer self-service solutions for the telecommunications industry. Ball also held a number of executive roles at Business Objects, including General Manager, Web Products, where delivered to market the first 3 versions of WebIntelligence. Ball has a master’s degree in electrical engineering from Georgia Tech and a master’s degree in electric

I hope John atleast helps build a KXEN Force.com application- there are only 2 data mining apps there on App Exchange. Also on the wish list  more social media presence, a Web SaaS/Amazon API for KXEN, greater presence in American/Asian conferences, and a solution for SME’s (which cannot afford the premium pricing of the flagship solution. An alliance with bigger BI vendors like Oracle, SAP or IBM  for selling the great social network analysis.

Bill Russell as Non Executive Chairman-

Bill Russell as Non-executive Chairman of the Board, effective July 16 2010. Russell has 30 years of operational experience in enterprise software, with a special focus on business intelligence, analytics, and databases.Russell held a number of senior-level positions in his more than 20 years at Hewlett-Packard, including Vice President and General Manager of the multi-billion dollar Enterprise Systems Group. He has served as Non-executive Chairman of the Board for Sylantro Systems Corporation, webMethods Inc., and Network Physics, Inc. and has served as a board director for Cognos Inc. In addition to KXEN, Russell currently serves on the boards of Saba, PROS Holdings Inc., Global 360, ParAccel Inc., and B.T. Mancini Company.

Xavier Haffreingue as senior vice president, worldwide professional services and solutions.
He has almost 20 years of international enterprise software experience gained in the CRM, BI, Web and database sectors. Haffreingue joins KXEN from software provider Axway where he was VP global support operations. Prior to Axway, he held various leadership roles in the software industry, including VP self service solutions at Comverse Technologies and VP professional services and support at Netonomy, where he successfully delivered multi-million dollar projects across Europe, Asia-Pacific and Africa. Before that he was with Business Objects and Sybase, where he ran support and services in southern Europe managing over 2,500 customers in more than 20 countries.

David Guercio  as senior vice president, Americas field operations. Guercio brings to the role more than 25 years experience of building and managing high-achieving sales teams in the data mining, business intelligence and CRM markets. Guercio comes to KXEN from product lifecycle management vendor Centric Software, where he was EVP sales and client services. Prior to Centric, he was SVP worldwide sales and client services at Inxight Software, where he was also Chairman and CEO of the company’s Federal Systems Group, a subsidiary of Inxight that saw success in the US Federal Government intelligence market. The success in sales growth and penetration into the federal government led to the acquisition of Inxight by Business Objects in 2007, where Guercio then led the Inxight sales organization until Business Objects was acquired by SAP. Guercio was also a key member of the management team and a co-founder at Neovista, an early pioneer in data mining and predictive analytics. Additionally, he held the positions of director of sales and VP of professional services at Metaphor Computer Systems, one of the first data extraction solutions companies, which was acquired by IBM. During his career, Guercio also held executive positions at Resonate and SiGen.

3) Venture Capital funding to fund expansion-

It has closed $8 million in series D funding to further accelerate its growth and international expansion. The round was led by NextStage and included participation from existing investors XAnge Capital, Sofinnova Ventures, Saints Capital and Motorola Ventures.

This was done after John Ball had joined as CEO.

4) Continued kudos from analysts and customers for it’s technical excellence.

KXEN was named a leader in predictive analytics and data mining by Forrester Research (1) and was rated highest for commercial deployments of social network analytics by Frost & Sullivan (2)

Also it became an alliance partner of Accenture- which is also a prominent SAS partner as well.

In Database Optimization-

In KXEN V5.1, a new data manipulation module (ADM) is provided in conjunction with scoring to optimize database workloads and provide full in-database model deployment. Some leading data mining vendors are only now beginning to offer this kind of functionality, and then with only one or two selected databases, giving KXEN a more than five-year head start. Some other vendors are only offering generic SQL generation, not optimized for each database, and do not provide the wealth of possible outputs for their scoring equations: For example, real operational applications require not only to generate scores, but decision probabilities, error bars, individual input contributions – used to derive reasons of decision and more, which are available in KXEN in-database scoring modules.

Since 2005, KXEN has leveraged databases as the data manipulation engine for analytical dataset generation. In 2008, the ADM (Analytical Data Management) module delivered a major enhancement by providing a very easy to use data manipulation environment with unmatched productivity and efficiency. ADM works as a generator of optimized database-specific SQL code and comes with an integrated layer for the management of meta-data for analytics.

KXEN Modeling Factory- (similar to SAS’s recent product Rapid Predictive Modeler http://www.sas.com/resources/product-brief/rapid-predictive-modeler-brief.pdf and http://jtonedm.com/2010/09/02/first-look-rapid-predictive-modeler/)

KXEN Modeling Factory (KMF) has been designed to automate the development and maintenance of predictive analytics-intensive systems, especially systems that include large numbers of models, vast amounts of data or require frequent model refreshes. Information about each project and model is monitored and disseminated to ensure complete management and oversight and to facilitate continual improvement in business performance.

Main Functions

Schedule: creation of the Analytic Data Set (ADS), setup of how and when to score, setup of when and how to perform model retraining and refreshes …

Report
: Monitormodel execution over time, Track changes in model quality over time, see how useful one variable is by considering its multiple instance in models …

Notification
: Rather than having to wade through pages of event logs, KMF Department allows users to manage by exception through notifications.

Other products from KXEN have been covered here before https://decisionstats.wordpress.com/tag/kxen/ , including Structural Risk Minimization- https://decisionstats.wordpress.com/2009/04/27/kxen-automated-regression-modeling/

Thats all for the KXEN update- all the best to the new management team and a splendid job done by Roger Haddad in creating what is France and Europe’s best known data mining company.

Note- Source – http://www.kxen.com