 Cool let's begin Good afternoon everybody. My name is Arjen. I run a company named open query based here in Brisbane So welcome to my new new hometown. I lived here for 11 years, but I'm originally from Amsterdam. I Started open query in 2007 after leaving a company you may have heard of called Myers-Grill Where I lived where I kind of lived for six and a half years That company was venture capital funded I started there as employee number 25 in 2001 I left in 2007 as one of 450 you can do the math. It's just about doubled every year And it did that in revenue as well, which was really really interesting. I learned a lot about how not to run a company It did really well, but it caused an awful lot of damage In in places that I care about it also did a lot of good in places I care about and good in places. I really don't give a toss about and And one of those things but we grow we're growing revenue. Yeah, in some cases. I don't care about that I care about my colleagues and If you're growing that quickly lots of people get lots of stress and that is not necessarily cool It's also not necessary. It's not an imperative and that's the kind of thing. I'd like to talk to you about today First I'd like to run a video here, and I hope that my trying to do it full screen didn't mess up the caching We're talking earlier about I think Bob Baldi mentioned the wealth creation And I thought oh, I've got something to say about that, but I need to check because there's a video about it It's another one of those imperatives that I don't believe in and I'll show you the video because this guy is fantastic And then I'll I'll tell what I want to tell let's see if this actually works now. I probably stuffed it up. I Think I did that one is nearly loaded. I'll just have to reload this one. It's only four minutes So it should be quick to load So what this guy does he visualizes and Talks about statistics. He makes statistics interesting This is not good might have to let that run and run it at the end To give you an idea of what he talks about he's plotted essentially how how countries since I Don't know 200 years ago have evolved in terms of lifespan and wealth and He talks about that in various respects and and notices differences and how things go together at different times of In the development of the various countries Visualization is right at the heart of my own work too. I teach global health And I know having the data is not enough. I have to show it in ways people both enjoy and understand Now I'm going to try something I've never done before animating the data in real space with a bit of technical assistance from the crew So here we go first an axis for health life expectancy from 25 years to 75 years and down here an axis for wealth income per person 404,000 and $40,000 So down here is poor and sick and up here is rich and healthy Now I'm going to show you the world 200 years ago in 1810 Here come all the countries Europe Brown Asia red Middle East Green Africa South of Sahara blue and the Americas yellow and the size of the country bubbles show the size of the population And in 1810 it was pretty crowded down there, wasn't it all countries were sick and poor life Expectancy were below 40 in all countries and only UK and the Netherlands were slightly better off But not much and now why start the world? Industrial revolution makes countries in Europe and elsewhere move away from the rest But the colonized countries in Asia and Africa they are stuck down there and Eventually the Western countries get healthier and healthier and now we slow down to show the impact of the first world war And the Spanish flu epidemic What a catastrophe and Now I speed up through the 1920s and the 1930s and in spite of the great depression Western countries for John towards greater wealth and health Japan and some others try to follow But most countries stay down here now after the tragedies of the Second World War We stop a bit to look at the world in 1948 1948 was a great year the war was over Sweden topped the medal table at the Winter Olympics and I was born But the differences between the countries of the world was wider than ever United States was in the front. Japan was catching up Brazil was way behind Iran was getting a little richer from oil But still had short lives and the Asian Giants China India Pakistan Bangladesh and Indonesia. They were still poor and sick down here But look what is about to happen. Here we go again in my lifetime Former colonies gained independence and then finally they started to get healthier and healthier and healthier and in the 1970s then countries in Asia Latin America started to catch up with the Western countries They became the emerging economies some in Africa follows Some Africans were stuck in civil war and others hit by HIV and now we can see the world today in the most up-to-date statistics Most people today live in the middle But there are huge difference at the same time between the best of countries and the worst of countries And there are also huge inequalities within countries. These bubbles show country averages, but I can split them Take China. I can split it into provinces There goes Shanghai It has the same wealth and health as Italy today and there is the poor inland province Guaishou It is like Pakistan and if I split it further The rural parts are like Ghana in Africa and yet despite the enormous disparities today We have seen 200 years of remarkable progress That huge historical gap between the West and the rest is now closing We have become an entirely new converging world and I see a clear trend into the future with aid to trade green Technology MPs. It's fully possible that everyone can make it to the healthy wealthy corner Well, what you have seen in the last few minutes is a story of 200 countries shown over 200 years and beyond it involved plotting of 120,000 numbers pretty neat, huh? That's cool. Actually making numbers work for you So what I noticed here, but what wasn't mentioned I'll I'll give an analogy on what I what I noticed We all have our electricity at home or office and is it is it all reasonably reliable for people here? Yeah, it works pretty well, but it sometimes blacks out. It sometimes browns out, right now Is it reasonable to expect the energy-providing company to make it even more reliable? You could ask but they would probably tell you that it's ridiculously expensive because it's already reasonably reliable To actually get a higher reliability becomes prohibitively expensive It is a kind of a law of diminished return kind of thing you get huge improvements When it's complete crap and you improve it and then later on when it's reasonably reliable it levels off That's what I noticed and actually any idea here how you would solve that particular problem How do you get your house supply of electricity or particular bits of your commitment? And I've already given something away there. How do you get that more reliable a? UPS so you you buy UPS which is ridiculously cheap now you combine them at every computer store and of course nothing anymore and they work reasonably well and You tie it only to the bits of equipment that you need so you pick From all the stuff that you have that each electricity the bits that you actually really care about and then you buy something Locally rather than relying on some centralized solution to to solve that thing and that's similar to what I noticed in those stats I'm all for wealth creation, but beyond a certain level. It's really not relevant anymore I don't think any of us in this room is in need of wealth creation We have a reasonable living standard. We don't have to fuss about about food and health so And we have every can we can afford being here for an entire week chatting away about things that interest us Yes, it makes money, but it's also fun, right? If it wasn't fun. We wouldn't be here We get on with our lives in another way, so That stuff is not really necessary I think it's nice to make to make some money, but it's not necessary from my perspective To make huge bundles of extra cash that doesn't actually from my perspective improve people's lives It can but it quite often does not it creates stress and other things for the people doing it in the surrounding environment and that's that's something I wanted to add to both all these mentioning of of wealth creation Now let me find my pressure again because that one by the way, this is not a Mac You may have noticed it's a running Ubuntu. It looks like a Mac, but it's not Yes My Mac is there still I Will face up to that I'll also explain why it's one of those practicalities. No, that's not what I was looking for Sorry about that. I actually managed to make it crash. It can still do that So this runs on the bare metal it's running Ubuntu Maverick So 10 10 10 and it works really well But sometimes it stuffs up and I think it might have something to do with the Wi-Fi drivers Doesn't it all always? Okay, let's try this one and see if open office wants to behave this afternoon You never know Reason by the way, I went to Mac about six years ago six seven years ago is that I was traveling a lot see it crashed Is I was traveling a lot doing lots of training and conference talks and I needed a laptop That could not only resume not only Suspend but actually resume. That's the more interesting bit They always they always suspend they can't resume and the other thing was working Wi-Fi And I just couldn't make that work at the time. That's why I went to Mac So I've now been a happy prisoner for about five years and trying to get out of that So now my spare laptop runs Linux and I'm slowly getting there But there's still some things Including some presentations that are in keynote instead of something that I can actually read elsewhere. So it's working progress Let's make that work look at that it actually does work today So that's what we're talking about I've been doing a project called upstart a little piece and it's essentially my company open query reverse engineered So it describes what we do and how we do it. There's some pieces of paper I'll actually send it around you may grab a copy. I don't have copy for everybody But you can just grab something if you want to maybe share with your neighbor and it's it's available online as well Obviously at that site address It kind of describes how my company Operates and the rules it uses to operate because I tend to ask a lot of questions to myself as well as other people Why I think is the way they are and I don't presume That something is the way it is because it's being done that way by lots and lots of companies I really don't care about that There's probably a reason why things are the way they are And I had a brilliant example last last week from an upstart our meeting I think it was about a turkey that got roasted and Grandma was always roasting a turkey and she'd always chop off the The two ends and the whole family therefore would roast turkeys chopping off the both ends and someone at last Bothered to ask why that was actually done and it just had simply something to do with the size of the oven that it Was already originally put in there was no practical purpose to it as far as the turkey was concerned It had something to do with the situation at the time It serves to ask those questions and you can laugh about that one But businesses do this and they never think about it. My manager will say that's the way it's done Well, that's great, but may I ask why and of course then I'm this annoying arrogant individual who shouldn't be asking those questions But I do anyway and so that's that's what this is about and What I figured out doing the upstart I think so sharing my experiences with other people and also learning a lot from what other people Do it's been really interesting over the last say a year and a half. I think it's been going I figured out that most of it actually comes down to business processes and so that's where what we're discussing today and Essentially it defines who you are and what you can do and that's what we're That's what we're about. So what I do we do remote services for my squirrel and we don't do emergencies I've already been declared nuts for that. So no need to do that My company's been going for nearly three and a half years now and it's doing just fine. Thank you It's actually doing exceedingly well It was set up before the GFC and it actually grew during the GFC. We had very low overheads, which means we had no pain Should something go wrong? That was just the way it was built. It was I didn't know the GFC was coming No, it didn't necessarily Interestingly our business actually grew more than other businesses around us because my prices were reasonable I wasn't trying to extract as much money as I could from my clients is in how much can they afford how much can I charge? My prices are low. It's a hundred something dollars an hour depending on how how we do the work and They're published on the website and they're not negotiable Yes, so I don't waste time on that kind of stuff I could raise the prices then negotiate for an hour and you get something Approximating that plus the wasted hour, but why bother? I just publish it be done with it That upsets people they can't negotiate the price with me anymore. It's really sad But doing the no emergencies hasn't given my company an edge Wonder why? It has made my infrastructure cheaper. I don't need to have a whole call Network to make sure my engineers are reachable and they are in different parts of the planet So I wouldn't need that otherwise It means I don't care What happens in the evening and during weekends because I will not get phone calls with things that are Extremely important. You see my daughter there. She just started year one. This is a couple of years old now at South Bank I think that was a mud puddle last week there. That's at the at the Queensland Museum So she just started year one today And I was actually able to to be there at her school this morning around nine o'clock Which I would not be able to do I've had to be in an office Three days of the week I actually pick her up from her school at about well It was 230 last year in prep now this year it will be three o'clock I can just finish work and just finish early I can do that kind of stuff because of the kind of business I run I Also have a better choice or broader choice of Employees or contractors in my case There are quite a few people mostly with families, but also other reasons Who don't want to do weekend and evening duty and I think that's perfectly sensible I can hire those people my let's call them competitors for convenience sake. I don't regard them as such But anyway, they can't hire those people because they will not work for them So I have a pool of talent that they can't touch. I think that's really cool And it's yeah, it creates wealth It is a form of wealth for me But it's mostly the freedom to actually do some extra things and actually live so I Make a life not just a living and that's that's kind of important to me So these are the things that being being tossed around. I think they didn't make it much further than the front row But oh, there's still some there somewhere Still some there. Okay, that's good I'll show you another one and because it's rather relevant to what we're doing here Let's see if we can make that work. I might have to exit that for a second Actually, I'll run that one at the end About what motivates people that might be the best way. Yes Yes, yes, it's up there. Yeah, that there Yeah, so you go to the start of the busy look up the there's a click called principles and you'll you see them there Yep So where do business processes come from and as far as I can tell it's essentially the same as a tradition something gets done like the turkey and At some point someone else coming comes into the kitchen the business like an administrative person and they do whatever the other person did Because that's how you learn. Yeah, this is the way you process a new client. That's how you enter the mean to the system and That's becomes business process because at some point another person new new comes in you need to have the business process be predictable Because regardless of who entered that person into the system the new client for instance You can then rely that it has been done in a certain way that that's the reason for that particular business process So it makes sense to have those things But in some cases it is just the way it was done It doesn't make it doesn't necessarily make sense in any particular way It could easily be done have been done differently, but you can't just change it Because then other things rely on it somewhere along the way someone else gets notified or gets extra input from somewhere and so it all interacts And it becomes this Let's call it a mammoth tanker. You can't just turn it It takes a long way and I often see businesses Deciding essentially in an executive meeting around the table that they're going to do something different An executive decision has been made that the business is now going to be run differently They're suddenly going to be customer focused Can't believe it. I mean come on. That's not going to work You can't decide to suddenly run a different kind of business because your entire business is tuned to whatever it has been doing in The past if your customer service has sucked in the past, you're very good at sucking That's that's what the business process has been tuned to so if you realize that you might be able to do something with it But sitting around the table with the managers and deciding that you're suddenly going to do it different is laughable really And I don't think I'm the world's greatest expert on this kind of stuff But I'm really amazed how businesses still try to do this kind of stuff and pretend that it kind of works because then you can then You can then observe and see that it doesn't work. So why don't they learn? I don't know Things that I've noticed in particular effects of funding and operational cost you've you notice in the in the upstart of principles Open query and and other related businesses do not borrow or lend money So don't play a creditor to my clients, but that's a that's a little sideline. We can talk about that another time We didn't start with any external capital I tossed in about a thousand dollars of my own just to get get going You know the usual the usual pocket money To register the business to website and get business cards printed get a get a void phone line and that kind of stuff We don't have bank credit Okay, now you may think that may not matter that much doesn't that impede my growth? Well, it might but it also maintains my sanity. I don't have the extra stress of potentially having to pay someone back later on and I don't know if I'll have the money at that point and it also doesn't put a strain on my My revenue and my profitability because whatever I borrow. I'll need to pay back with interest, right? Well, whatever I make in money now I actually own all of it which means I make more profit by definition And that's a much nicer way of doing business at least from my perspective So it it releases me from some of those worries But it also means and I think that's more important from a business process perspective It means that I have to run my business in a different way. I don't have a pile of cash sitting next to me Enabling me to do whatever I want within the confines of that pile of cash. Yeah, so I want to do some marketing Oh, yeah, I've got some cash. I'll push it at that and I'll start that new initiative I can't do that whenever I have an idea. I need to work out whether it's actually affordable and Preferably most things are affordable once you figure out how to do it without any money Or maybe a little bit of money and that's that's what I mean with working That's that's the rule number two work on the basis of a zero budget Doesn't mean I have no money I've got money quite a lot of it and it's quite nice to have it there, but I don't want to be spending it always to point It's it's there to be used when necessary So I try to work out whatever I do whatever new thing I do to try and work out how to do it in the cheapest possible Way and in many cases it turns out that you can't do things for free or only for a couple of hundred Dollars rather than spending thousands on it and it turns out that spending a lot of money on something usually is very much not effective for instance open query early on did adwords and It got us some extra leads, but it didn't actually convert into any clients where we got our clients from is word of mouth As well as people just googling coming to us Thinking oh, yeah, we'll talk to them and having a chat with us Whether that is up whether that is because of the way the website is is built. I don't know the website is not that good I'll happily admit that I haven't done a lot of research into that but Word of mouth and just general generally coming So that's how we get our clients now. There's a rule that says Don't stop doing ad words because people will notice you stop advertising. You think there's something wrong with the company They want that visibility. I haven't noticed that in my case I'm not saying the rule is incorrect. I just haven't noticed it. We stopped it and it saved me a couple of hundred dollars a month perfect And I didn't actually lose anything because of it So I can now use that money for something else or just have extra profit whichever way So that's effects of funding now If you get venture capital Any idea what what the consequences are for the way you do business any thoughts? But Dale has a good giggle You Okay, so you get additional contacts and advice and so on but could you get that without the VC? That person may still be enticed in spending their time on you rather than just their money. I don't know But I'm quite happy to help help other people and I'm hopeful that people with lots more money than me are also that willing And the ones that I know are very willing to interact. They don't necessarily need to have a stake in the company in a financial way It's not all about money definitely not but the thing is because there is money involved there are consequences They put in a certain amount of money, and I want that back 10 or 20 times Over because that's the way it it it works in VC land that means you need a ridiculous growth trajectory that is not natural to a company so you use that money to grow faster and What's the end point? You need There's an exit strategy The only way to pay back 10 or 20 times is to either sell the company or float it on the stock market So that's where you're heading That's fine And you can make potentially a lot of a lot of money in the process But I think it leaves skeletons along the way a lot of stressful a lot of people get stressed along the way I'm not sure it necessarily helps the clients in the best possible way and Once it gets bought or floated Will it continue to serve the clients in a in a good way because often companies that could bought Die they get gobbled up. They get put aside in and and die off And that's been quite interesting and you can look at that even in the my squirrel sphere It's doing all right inside Oracle now But my school was about ready to float on NASDAQ We're actually making preparations that might not be publicly known, but I can tell you that one and At that point there was a negotiation with with some microsystems some microsystems bought bought it now That was still okay, but the way of operation internally was not quite as nice nicely compatible As it could have been and it didn't improve in terms of development and quality for the users it didn't actually create improvements that you would like and then all of some microsystems were bought by by Oracle and Naturally putting one database inside another database one not a database company anymore But they have their own database Puts it in a completely different position to where it was and companies can't disrupt themselves So as far as my scroll was a disruptor to Oracle it by definition cannot longer be at least that part that they own now As in the trademark and so on the ecosystem is alive and well that works perfectly well because that's been building for 15 years, but it can no longer be disrupted the way it was because Oracle can't disrupt itself internally if a salesperson will get to that salesperson on commission if they go Out somewhere are they going to sell a service contract to my scroll or they're going to sell the service contract to Oracle They would watch rather do the Oracle thing. It's more expensive. It gets the more money. That looks better on the bottom line for them They were concomitant most likely. What are the consequences of that? if you have a salesperson who works on commission you will be Let's say your commission is 100,000 or your your quotas a hundred thousand dollars You will be going for the ten ten thousand dollar customers. You can't Talk at all to the thousand dollar customers. You may want to you may say you are and many salespeople or companies that you ask will say Yeah, we do take care of the little ones. You don't they drop off the edge of the table No malicious intent, but please acknowledge it. You can't talk to those people because you don't have the time you'd have to set up separate salespeople who don't get paid on commission to talk with those fellows or Have an online sales system that doesn't require the human interaction online sales in a web web shopping cart can be a very good solution for that And that can be done my scroll Stuff that up about for about five six years before they actually had an offering For about a hundred between hundred and five hundred dollars online Available for that entire time. They couldn't get it done which is quite amazing for a company that actually builds databases for web use It's quite impressive So inside my organization, I'll never have a salesperson on commission because it it would sell the wrong thing to the wrong client I'm not trying to go upmarket with my company If I go upmarket with my company, I will get slaughtered by the competition because that's where the competition leaves I currently live below the competition. I'm so cheap that they can't compete with me and If I'd up my prices this way, I'd go for the larger contracts. I'd get competition I don't need them. I get enough customers and the market is actually really really big. I don't need to capture everybody So that's that salesperson Pending over backwards for clients. So we do We do database maintenance. We also do system administration. That is really close And I had a long hard look at that whether we actually should be doing that and I think we should that's just my thought there Should we also be helping people build their web apps? No Most of us are at least on the sideline web developers or have done that in the past that kind of thing We really don't involve ourselves in web application development even though we could theoretically do that So when a client asks the simple answer is no and there's no amount of money You can give us to make us change on that the same happens for that that emergency Services there no amount of money. You can give me that will make me do emergency work It is not a matter of money. It is a matter of I want my company to run Well the way that it does and trying to do those other things will not make it a better company And it will not actually serve that client in the best possible way It will stuff it up for everybody including me my work with co-workers the other clients and probably for that one client as well It's not going to provide the best service because that's not that's not what we're tuned for We also never apply for government tenders. We do do gigs for government training. We've done training for the Department of Defense Parliament House New South Wales Department of Revenue all over the place Queensland or Brisbane City Council But we don't apply for government tenders. That's a lot of work We don't have the administrative or executive staff to do that It's a lot of work and then potentially you get a big gig out of it, but maybe you don't it's a lot of effort So we don't bother the fact that it is 70% apparently 70% of Queensland IT The budget is Indirectly or directly government related and so I've been told you must you must go for this because it's so large No, sorry that 30% is already large enough compared to the size of my company I can grow a heck of a lot more without getting anywhere close to that 70% don't care So that's another thing. I just don't don't bother with So that growth and parity imperative mentioned mentioned earlier Must companies grow? Or must they grow a certain certain amount to be to be viable? I don't think they do Maybe at the moment you have to grow at the rate of inflation Just to make sure you have your you have your revenue you cover That's one of those numbers you do have to deal with in the real world. You do have your bread and milk to pay But does it have to grow by 10 or 20 percent every year to to make you happy I heard from Paul Gump that Red Hat's been growing at 20 percent and it is rather painful We were we were talking about a partnership earlier on and we hadn't had the time to catch up because he was too busy hiring new people That was literally what he said and he's quite happy to Mention those things. That's good. That's kind of openness is really useful Yeah, that doesn't really make much sense growing just because you think it is necessary for a company to grow It is also not the case that Or I think it's not the case that if a company doesn't grow Are you necessarily have to pass it on to your son and daughter or whatever? I don't think my daughter is going to be doing my school remote database maintenance really I don't think I will be doing remote database maintenance in ten years necessarily So this company may just end finish. Is that a problem? Is that destruction of wealth? I don't think it is it's been a really great experience It's paid all the bills for me and a number of other people more than a handful at the moment It's paid all the bills. It works perfectly fine So the fact that it ends and doesn't get sold is not a destruction of wealth It served its purpose. I have other things going and they will they will They will make money at that point. It's like a new product. Yes quick question There's one group who will be horrified by that extra strategy which is your customers Where do they go if they can't rely on you? I mean That's lovely, but If they were to sign up with an enterprise deal with my school the company they've now been bought by son They've now been bought by Oracle the prices have have risen and the service has dropped On average and some point the service may disappear. So what have they bought there? And that was a big VC funded companies what you get so I agree with your question in in principle, but in reality, I'm no less reliable than the next guy even though I'm small and Yes, in some cases they may exist in 10 years With that particular database and still have needs It may be that they're they are big enough to to serve those needs internally There will also be other businesses and individuals who will be able to help them I'm not the only one who can serve them in the market The market will change over that period of time and may be able to tune itself more not care. Yes I do worry about the opposite problem are the customers will have will what fraction won't move down to something else in 10 years whether An elaboration of the current product that they're doing or something else entirely, okay? So I use okay So you're saying I might I might lose customers because the customer moves on even though I'm still doing the same thing Before I leave my current company Same Yes Now the way up open career is designed is to not float up markets So we don't add a lot of features which means that we might actually Grow kind of grow our feature set at the same rate that their customers do rather than overshooting them as a most companies do That's a that's a generic plot If you're if a disruptive company and to offer less and then at some point you cross You add features and features in terms of service or product And then at some point you offer more than the client requires and then you start looking for a different market That's why you float up market. We don't do that and we specifically Aim to not do that because we like the level that we're on we do lose some customers sometimes Because they grow too big they create business processes because that's the way they they develop their company that are no longer Compatible with ours. They need different requirements. Sometimes they start creating emergencies just because of the way they work That's fine. There's other businesses that we work with that offer those things One is the pithian group that also do remote maintenance. They do offer emergency services They're actually not that much more expensive than we are and they do offer that we give them a personal introduction with the CEO Not a problem. We pass them on we actually have happy non-customers and ex-customers that works just fine we will serve those who we can and we'll try to pass those on that we can't and I'm not scared of losing a customer the ones that are happy with the way we work and are right for what we do and vice versa They stay with us Just a second I've the China thing if you're producing a product There's that you must have economy of scale because hey if you if you show more that that would be really really great You can run things cheaper What did we come up with on Wednesday? Was it the China the China thresholds that was it? So the way I figure it if you make less than 10, let's arbitrarily if you make less than 10,000 of something China is not going to be interested in you because there's no way they can compete with you Does that make sense? It's not going to be economically viable If you stick your head above that and it might be 100,000 Whatever it is for the particular product that you're looking at then you've not only got China But others that do work in that economy of scale you've got those people competing with you So being small can actually be a benefit so it depends a bit on what kind of work you're doing and what kind of service or product You're providing but not sticking your head above that level can be really beneficial There's always others else in the world who can deliver products and services cheaper as soon as you stick your head above that and I would theoretically be competing against Oracle. I'm not really I provide a service I couldn't compete if I was in their space so that kind of gives you an idea how I operate there I'll skip past these things. I mentioned the The products overshooting the market So offering something that is good enough for instance by removing something like I mentioned I don't do emergencies That's something removing that usually improves a product It gives other opportunities and it is something your competitors or would be competitors can't can't offer My clients generally have not Acquired a similar service before so I'm selling to non-consumers. I'm not competing against other people in that marketplace That's really important. There's always lots and lots of non-consumers That just haven't been served before and because my product is simple enough my service I can actually talk with them and simple and cheap enough. It works for them Here's an example how that works for Nintendo If it's high up Things have been improved over normal if it's somewhere in the middle It's like the way it's the regular, you know CPU power price GPU power and that kind of stuff so this is how Nintendo disrupted the market and this is called the value curve and We played at that game a bit inside up starter for for business We've done it for political parties to parties to see if they actually differentiate around the election time earlier this year early last year and so on and You see Nintendo is clearly disruptive It really doesn't care about some things like high definition video. It doesn't have a video output. It doesn't have it You can't create it. Maybe someone has hacked it to get it, but I can't get it on my Wii So you have a video out and of course that doesn't create a much fantastic Video experience compared to for instance the Xbox. Yeah, that has fantastic graphics We does not have that and it doesn't offer a lot of storage. It has its little onboard thing You can stick in SD cards. That's it or use be key. I think But what does it do? It has lots and lots of games It has its fantastic ecosystem and it has it you what they call unique gameplay the graphics aren't fantastic You've got those little me me characters to kind of cute, but a bit weird But the games are just fun There's not that many buttons on the on the consoles But they just they just work and lots of people and kids have have a lot of fun with it I've never owned another game console in my life by the water we because I just like the way that works So again, I'm a non-consumer. I will serve by that particular thing and that's the kind of thing I'm generally looking for with new business ideas. Can you plot it out in its feature set as disruptive in the market? The one I couldn't find quickly, but you can think it out for yourself Amazon It completely disrupted the book market because on pretty much everything. They're the opposite of what a regular bookstore would do Little bit of time left. Okay So traditional businesses they aim for revenue and growth But that's just because that's apparently the way it's done and I'd like to ask the question why And managers make decisions based on the business aims whatever they may be But if they don't get questioned why it's business aimed the way it is Is there a specific purpose that you can actually validate along with all those steps? Maybe you could change the think about doing that differently But you can't suddenly decide to do things differently the business processes will sabotage that and There's a nice example of this a Well, there's companies that really can't disrupt themselves for instance Seagate long long ago You had the five and a quarter inch discs and that produced three and a half I hope I get the brand names right that produced a three and a half inch disc It was more expensive per megabyte of course no gigabytes at the time It was more expensive per megabyte, but it was much more reliable. And of course it had the lower form factor So they went to one of their clients little company named IBM you might have heard of them and They came up. This is a better disc and IBM looked at that thing and they looked at the IBM PC And that had those nice four five and quarter inch slots and that's what bugger off Doesn't we don't need that whatever we have is perfectly fine Not a problem. However, a little company that was trying to build laptops named to Shiba was really really interested because it enabled them To it is enabling technology. That's the term for it. It enabled them to build laptops that were portable even though it was more expensive Per megabyte it wasn't possible to build a laptop without such a thing. So it didn't matter that it was a bit more costly similarly later on The compact flash cards came along they weren't plugged into our computers at the time where they they ended up powering The cameras and all those things it was enabling technology for that Different set of technology. So whenever you're trying to plug something into your existing clients Something really really new. It's not going to work that way. It's going to be something different IBM PC was developed by a separate business unit inside IBM in a separate state with its own budget and its own management Because otherwise it would have been murdered by its own mainframe business Just the internal management decisions would follow the money. The money at that point came from the The mainframes She's not going to spend money on that PC thing that may or may not work You're not going to kill of your own business that is known to work The trick is of course that now IBM they still have mainframes interestingly but Way less and most of the business it's moved on to services and so on But they had that big PC business for a long time So if they'd followed the money at the time and not disrupted themselves by spinning it off They would have maybe killed themselves over time because what works now it works next year next year doesn't work in five years That business would have been dead someone else would have come along and done it for them So they did disrupt themselves, but not internally and that's the trick So you do a spin-off There's some cases where you can tweak your internal business Rules but that depends a bit on how you run your company already I apparently there are a couple of examples of this, but they're very very rare I haven't found a good one yet The ones that I've seen successful are the other ones that that spin off and just start something elsewhere Make sure they can't interfere with each other Cool books I've based my ideas on are there and I'll be happy to pass you their their titles Can I impose for ten minutes or is that really over time for the video? Shall I run it in the tea break maybe if people want to see okay? I'll leave it on here then so this is really cool I Think it's cool video about what motivates people and how that relates to for instance your your salary and that kind of stuff And it's probably nice to see but it takes ten minutes. So I'm out of time I'll take one question maybe one question a couple of questions and and then I'm I'm here all week So for free to ask You talked about that there's something you don't want to do for instance emerging support because of your lifestyle choices But a harder question is how do you decide to say do sys administration and not web app development? Like where do you draw? How do you know where to draw the line? So the question is how do I draw the line in in what what to do and what not to do? I don't know I don't have magic juice for it Open career doesn't contain magic juice because anything we do and decide we talk about publicly like here So good that you asked a question. I really don't know I make it up I choose what I like what seems sensible at the time and sometimes I'm dreadfully wrong The good thing is that I usually don't spend enough money on being dreadfully wrong To to hurt the business in a significant way. We made choices early on in terms of the tools we used and one of them was a wiki that really turned out to suck for what we do and I don't know we're probably in actual work being done mostly by internal people but also contracting spent probably about $20,000 on the wrong thing bummer But in the meantime the company still survived and that's that's all fine So I don't know whether sys admin is the right choice and the web admin is there would have been the wrong choice But lots of companies do web development We'd have to do a heck of a lot of work to actually make people happy where sys admin Is really really close to what we do with database administration many cases We also have to tune the operating system anyway We have to do upgrade so we need we need that access on this environment anyway and together with the monitoring as well So it kind of blends in more naturally so it's more I think it's closer to our core business now Whether that's a valid reasoning. I don't know ask me next year And I'll tell you because if these things develop over time or what was the right answer this time may stuff things up later I could be wrong Had to suddenly your business needed a big investment up front that a big So the cost of the cool new MySQL debugger was $100,000 for your company license or something like that or $200,000 And you needed that to really Keep going and you obviously didn't have $200,000 sitting around. I mean that's your business principle. You can't do it But you sort of yeah, I might have it around but I'm not gonna spend it on that It seems like a really really bad investment I think that the technologies that we that we operate with doesn't don't require us to make that kind of investment We're not a my school son oracle partner never have been because what they deliver is not something in terms of the partnership Benefits is not something that we benefit from you get name exposure on the website That's great, but people can already find me and it doesn't seem to be hindrance I know partners who have been on there and they didn't get a heck of a lot of benefits from their perspective either So as long as you're well enough known in the ecosystem that works out fine Needing specific tools. I I think that's not the case for the kind of business that I am in I Would try to find Markets for any just making it generic for any service or product where you don't need that kind of thing Because that makes the upfront cost higher. You need a larger budget to do that. I don't like that kind of thing I do have an example that might be somewhat related for instance Starting a restaurant so lots of people want to start a restaurant There's lots of them around did you know that most of them don't live longer than two years which by coincidence is also the The average lifespan of a new startup company many of them or most of them don't live more than two years because that's about the time You need to fail It's a nice time, but you can often save yourself the time I'm always amazed that people go to the bank with a business model on on on the restaurant I have this really good idea. They have some experience. They get fifty thousand or hundred thousand dollars Spend that on the restaurant and then they fail two years later I think that's a really weird weird idea because after that you have a debt to the bank of that amount You need to work even harder to pay that back before you can start something new How about they save up that money first doing something else? Then they have fifty thousand dollars of pocket money start a restaurant fail or not But at least they will run they can walk away afterwards if they were to fail and it's an interesting experience I like to build things with my own money and if I need that hundred thousand dollars I would want to run a business first Either different business or the same one that makes that amount of money that also gains me experience to handle that kind of Money and then I can start something new Within the same company or new one that Well that requires that kind of business so definitely there will be businesses that require a larger investment But I want to have the experience Internally to actually be able to cope with that and then if it fails I can still walk away Without being in debt behind me. I'd like to have you know I'd like to if I see that I need to spend money I'd like to make it first because for the person who's who has had the failed restaurant If they can work afterwards and make that money back, why didn't they do that beforehand? It's not this it's the same situation, right? They do another job and a save up money Well, they could have done that first and it doesn't take that much effort particularly for the 50k It's not that big a problem Things are manageable and actually if they have to pay back the bank they have to pay back more money So it's cheaper to do beforehand last question maybe or do we have more time Michael? okay, yeah, so this is a lot like what I've heard called a Lifestyle start up. Are you familiar with the term? No, but I'm now sounds about right. Yeah Sorry, I just can say I think the implication in the term lifestyle startup There's also the notion that there may be a couple of you know partners involved who don't actually expect to pay their mortgage with it for some period of time Okay, great Just just to be clear open query has paid its way and my and my rent and everything Since since day one it has paid the bills. There has been no dip in in that perspective So it's and that's definitely important and I agree with the other Commenter there if it is about lifestyle then the ability to pay rent is really really important because otherwise that affects my lifestyle considerably It is the difference between a job and a hobby this is definitely a job But I like doing I like this but I do mention to people Being handy with databases is what I do. It's not who I am I like cooking and that's why on Friday you're welcome at my house to do that that geek my dinner It's on the it's on the weekend. That's another thing I do and I that's really a hobby I'm not going to start a restaurant next week. That's not what I do So there's a difference there, but yeah, the company should definitely make money. It should definitely grow But I'm not going to hire new people To hopefully make more money the way that I work and for free to ask me in the corridor later It allows me to grow slowly and and actually hire people when I need to So I don't necessarily grow Slower than I would otherwise, but I'm not going to hire people in the hope that I can get bigger clients because those bigger clients Bigger than what I currently have would cause trouble. I need more of the same in the same realm that works best for me Okay, thanks very much