A Small World After All

I was doing some browsing and stumbled on this video that shows my great-uncle's house collapsing into an abandoned coal mine in the northeastern Pennsylvania town of Coaldale. A great metaphor for the decline of the region, with a personal twist.

Coal mining was hard work and often lead to a very short life. If you happen to be in the vicinity of the Pocono Mountains in Pennsylvania at some point, I recommend visiting the Eckley Miner's village for an historical perspective on the mining life. My great grandfather was fortunate, as he was able to run his own contract mining crew (not bad for someone that arrived in the US without any adults around the age of 10, speaking only Russian), though he ultimately died of mining related lung disease. My grandfather was doubly fortunate, as he was able to leave the region without working in the mines and before the economic base collapsed.

I don't know who posted the YouTube videos on Coaldale, but they are quite interesting on a personal level. In the business and church video, you can see a quick snapshot of St. Mary's Russian Orthodox church, which my great grandfather helped to build. The last time I was there was for a funeral when I was a child, but I believe it is still there and still functioning. This video is also a neat reminder of what small town America used to be like.

Social Not-working?

Some former colleagues, both old and more recent, have started a company called Ringside Networks, building a platform to integrate and host social networking technologies within corporate web sites. The company is releasing part of the source code on an open source model to drive adoption, so check them out: there's no cost and lots of transparency. I like the fact that new business models are emerging for startups, though the exit options are limited to acquisition, valuations have been high for companies with open source products that have gained scale.

In this case, the business model is doubly interesting, as it aims at a hybrid of SaaS and in-house technologies: part of the pitch is that social applications are too important to be captive to third-parties. If large companies (especially retailers) find that they want more ownership of their customers, this may be a very interesting play.

Cetaceans among us

I had a chance to take my family on a three hour whale watch chartered out of Half Moon Bay on Sunday. After about an hour we wound up spotting several gray whales; baleen whales that I am told can grow to as large as 14 feet. For the most part, we were seeing the smoke-like "poof" of the whale expelling through its blow hole. My daughter was able to spot the fluke at one point. Then, suddenly, the larger gray jumped out of the water, exposing the majority of the whale's body to view. Amazing.

We did not get a picture of the whale, as each spotting was quite sudden. However, the overall effect was considerably more dramatic than the spotting photo I have linked to from Wikipedia.

On a slightly related topic, the migration of the blow hole to its present position on the whale's head is one of the more interesting parts of aquatic evolution.

Israeli Startup Panel (This Week!)

There's a panel in the Palo Alto area this week looking at Israeli startups with ties to silicon valley, organized by a local group CoolTech, this week. Israel (Tel Aviv in particular) is one of the few places that has been successful in transplanting the "American" venture capital model. Clearly, enlightened government policies had a formative influence on venture capital development in Israel, as did a business culture tolerant of risk and failure; it is also an incredibly exuberant business environment. In fact, when talking with Israeli VCs, I'm struck by how similar their outlook is to American VCs. And yet, there is undoubtedly more to the story. Israel's domestic market is small and the target for intellectual property is invariably external markets. The differences may in fact be more important than the similarities, since they open up new channels for discovering innovative business models. For that reason, Israel is an essential case study for economies around the globe that aspire to a dynamic technology marketplace.

Creative Thinking in Private Equity

I recently had a chance to attend a meeting with a partner from Aventura Investment Partners as a part of a Wharton program looking at private equity in emerging markets, an area that I find extremely exciting. Aventura is doing several investments in Senegal, targeted at the value chain around agricultural production and also in health care. I can't go into the business models they are using right now, but there is some very innovative thinking required to bring development to areas like rural Senegal. As one of my Nigerian friends recently commented to me, traditional "aid" just hasn't worked. This is the kind of private initiative that has the chance to make dramatic and sustainable changes in a society. I imagine we will see a lot more funds take on challenges around development, especially if projects like these have success.

Civic Pride

Shamong was rated the 6th best town in New Jersey Magazine this year, owing no doubt partially to the fact that it is an attractive, quiet place, with a lot of nice people. Philadelphia magazine also showed that Shamong was one of the best residential towns in South Jersey for homeowners.

Gulag Archipelago

I try to read at least one novel a month to keep myself sane. Last month, I stumbled on an old hardback copy of Solzhenitsyn's Gulag Archipelago, which I picked up for 2 dollars in a used book store in New York City some 15 years ago and lost along the way. A riveting book that should serve as a reminder that humans are not inherently good. The book is a bit like reading Kafka's The Trial, until you realize it is not literature but a documentary.

New Pan-African Venture Fund

Hasso Plattner just launched a new pan-African venture fund. Most of the venture investment I am aware of in Africa has been heavily concentrated in South Africa, though I have been hearing a lot about private equity in Nigeria from some of my African friends. Kenya was also looking like a beacon in east Africa until the recent lamentable political destabilization.

Lunar Eclipse Picture

I was sitting at my computer in Redwood City worrying about the proper model for migrating composites from test to production systems when my colleagues from the integration team, Bo and Albert, called me over to Bo's office to see the lunar eclipse last evening. Pretty cool, though the eclipse was partially obscured by the cloudy weather in the Bay Area. Another friend, Deika, however, had a great view from Jamaica that she caught in a photo featured in the Telegraph. Wow!

An OSGI update

Dave and Khanderao wrote up a nice summary-overview on OSGI.

Business Process Management fallacies

I missed this when it first came out a couple of months ago, in case you did as well: Dubray wrote an interesting analysis of problems in BPM from conceptualization to implementation that is worth reading.

I don't agree 100% with the model for linking BPMN models to BPEL, at least not as the only normative approach to consider, but the runtime model is spot on. The only meaningful model for executable business processes is going to require composite models that incorporate more than just rote BPEL mappings: business rules, human task management, and some form of message mediation. If that sounds familiar, you've probably started to look at the Oracle AS 11 SOA suite preview....

And JJ gets why SCA is so central to getting BPM right. We had a brief conversation about this recently, which I think may make it to Infoq over the next couple of weeks.

The Next 4 Billion

I recently got a copy of the joint IFC and World Resources Institute report The Next 4 Billion. I am asking my friends in the technology sector to look carefully at the issues raised by this report: specifically, how to accelerate living standards, productivity and quality of life for the world's poorest using private sector resources and market-based mechanisms. Thinking in the developed world has changed radically in only a few decades: there is a genuine consensus that developing markets aren't there to be exploited, but to be developed into first-class market economies. Many (most?) of my friends are from emerging market countries, so I am confident this will be of interest to many of you.

I am convinced that business models are not yet there, but that that they are waiting to be unlocked by creative and innovative individuals. Since the problems with business oriented models aimed at developing markets is often one of scale, a big part of the solution is likely to be technology based. This is about developing a better future for humankind. Please give it some thought.

Turning back time

A really interesting paper appeared in this weeks Nature. (Unfortunately, requires a subscription to access the full paper, but you can get a copy at a local bookstore.) The authors used phylogeny based statistical techniques to reconstruct ancestral proteins for several bacteria. The results independently show (and collaborate other evidence) for paleotemperature trends from as far back as 3.5 billion years.

Phylogeny based ancestral protein sequencing is not fool-proof, but the evidence seems convergent: the seas were considerably warmer billions of years ago (30 degrees Celsius seems likely) during the early development of life.

Systems Integration 08

Tracks and a call for paper have been announced for the Systems Integration 08 conference in Prague this year. This conference is extremely practical and in my experience has excellent content for IT practitioners. It is also a great opportunity to get some insight into what is happening in IT and software in central Europe, especially the Czech Republic and Slovakia.

RVC, round 2

As a followup to my post on venture capital in Russia, the RVC maintains a new site, which indicates that they will soon be running a second competitive round of management company selection.

Conveniently enough, there is an RSS feed you can grab to track developments. Stay tuned.

A World of Change

Jeff Mischkinsky drew my attention to this interesting article by Parag Khanna that appeared in the New York Times recently. Parag deals with the geopolitical and economic developments that are unfolding before our eyes: specifically how the world is transitioning from US-based unilateral order toward a multi-lateral world dominated not only by the US but also by China and Europe. There is much to disagree with in the details, but the central point is an important one. There is a changing reality that Americans in particular need to come to terms with quickly.

Parag talks a lot about the "second world": countries that aren't really emerging in the sense in which the term used to be used. They have in many ways arrived and they are building important alliances with the major global powers. Of continuing interest to me is the innovative thinking that is happening in these countries; thinking to which we in the US should be paying close attention.

A few examples: the recent announcement that Israel is jointly working with Shai Agassi's new organization and Renault-Nissan to move the entire country to oil-independence. And we have seen similar bold thinking before: Brazil has been steadily moving toward energy independence for some time. This is incredibly exciting stuff. Here we have small and so-called "developing" countries leading the way to the future. Brazil, by the way, is trying to tackle issues around development and income inequality by pushing very significant investments in education.

It's very hard to say what the world will be like a decade or more from now. One thing is almost certain: the world will be a smaller place; hopefully, a better one as well.

Venture Capital in Russia

I spent a few hours last evening attending a panel discussion in Palo Alto on venture capital investing in Russia. The meeting was organized by the American Business Association of Russian Professionals. I was there because Russian economic development is becoming a serious area of interest and a topic on which I am doing some research work at Wharton. It took me about an hour and a half to get from Redwood Shores to Palo Alto, as 101 was shutdown the entire way at rush hour due to a major accident. The ride home was better, but 101 north was still closed most of the way.

When I finally arrived, things were just getting started. Most of the audience of about 100 spoke Russian (I do not): there was not a representative subset of the tech or finance community in the valley as a whole. I mention this because I find it odd: Russia strikes me as one of the few genuine and relatively untapped opportunities available to investors. Three factors to consider in this:

1) Russia has a very well educated population of top-notch scientists and engineers.

2) The government is dedicated to bringing private equity money and expertise into the country, developing technology businesses, and opening up investment opportunities to foreign sources (more on this later).

3)The Russian economy is growing at around 8% a year, as compared to 2-3% and slowing in the US economy. With world demand for energy continuing to grow, the economy and living standards are only going to go up.

From what I can tell from the panel, the deficits in Russia are: experienced managers, investor experience with early stage companies, and the web of specialized resources that characterize a culture of entrepreneurship. I find it hard to believe that this won’t change very rapidly.

Among the panelists were Ilya Shirokov, a young Russian Entrepreneur who shared his experiences founding the professional social networking business Moi Krug, which was acquired by the search company Yandex in 2007, and Yan Ryazantsev, Investment Director for the Russian Venture Company. The Russian Venture Company is a government fund with about 1.3 USD to invest as a limited partner in funds focused on Russian companies. My understanding of the RVC is that it will match investments in large funds with a very low required return on investment (5%). Currently, there are only two RVC backed funds. The third panelist was San Francisco VC Marc Friend, who shared his experience investing internationally, including in France, Israel, China and India.

These turn out to be useful experiences, as Russians are looking at three countries in order to learn from their successes in creating successful venture funds: China, India and Israel. There are notable differences from each of those countries: Russia’s population is an order of magnitude less than India or China and currently shrinking; Israel, though much smaller, has established a collaborative business model that is deeply linked to the US and also European markets. Russia will undoubtedly have to find its own model, but its clear they are looking at what has worked for others as a first step.

You can see the signs of change already. As of this month, the Russian laws have been updated to allow funds to use conventional capital commitments as opposed to pooling funds up front prior to investing; this was a major barrier to outside investors. Tax laws are being examined to attract investors. And there are plenty of other innovative models (the point was raised in the panel discussion that Israel and Canada match corporate R&D to stimulate investment) that could surely raise interest in Russian investment as well.

It strikes me that the biggest problem with Russia from an outside investor perspective is information asymmetry. Forget about individual deal prospecting: it’s very hard to understand what is happening in the markets as a whole. US press coverage of Russia tends to focus on either politics or Gazprom. I certainly feel I have a better handle on Israeli, Chinese and Indian markets, partially based on personal relationships, but primarily because the US business and financial press is flooded with coverage. I subscribe to feeds for several US language Russian newspapers, but I am hard pressed to understand whether I am getting accurate or biased information. It’s also unclear how to get deeply embedded in Russian business from the outside. Indeed, if you google Russia Venture Corporation, you have to go through several pages before you get a lot of solid information.

My own opinion is that all of this looks like it adds up to something special: the opportunity to participate in the start of the development of a new economic model.

Why live in the Northeast?

Most of my friends find it astounding that anyone would live in the Northeastern United States: cold winters, humid summers and far from the center of technology in the US. I often find it difficult to convince them that it can be a special place. I think Cameron did a better job with a picture that speaks a thousand words.

Too bad there's been no snow in NJ...

Venture Capital and China

When I was in China last year, we had a chance to talk with several private equity funds. A recent post by David Hornik gives his thoughts on PE in China.

This may be of interest to you WEMBA 33 Westers... good choice, by the way.

Oracle 11g SOA Platform Preview

We recently published a preview download of the next release of our SOA platform: I'm very proud of all the hard and innovative work that our team has done on this project. The project was a real team effort from its inception. It brought together some of the brightest folks in our middleware organization. I am convinced that nothing else in the industry comes close to combining the key elements of technology required for a SOA deployment into a single, integrated platform.

We use the Service Component Architecture as the overarching model for application development: it ties together process orchestration, declarative XML transformation and routing, human workflow, business rules, and sophisticated policy management. I like to think of it as an "application server for integration": a service platform that supports domain specific languages and technologies required for integration and SOA scenarios.

Download it and try it. I think you'll be impressed.