AquaponicsOS: Coda

Being the last blog post, I would like to delve into a couple of half-baked ideas related to articles that came out in the last week or two. Won't have time to fully develop them but didn't want to stop mentioning them.


From Server Farms to Aquaponic Farms?

The first article, recently published in Wired Magazine is titled "Google Says The Internet Of Things Smarts' Will Save Energy".

What most excites me is how Google has been applying an "Internet Of Things" mentality when it comes to their data centers. That is, they are using data and brains to most efficiently design their cloud data warehouses. Every KWh squeezed by efficiency means better service and it involves from the physical arrangement of CPU's and disk storage, to networking, refrigeration, monitoring, anticipated failures, etc.

Another aspect that I found interesting (and was not considering) is that, while harvesting data might provide energy saving on one end, one should also consider the heat produced precisely by using computing resources. Luckily, I shouldn't worry:

The worry is that powering all this extra hardware will require exponentially larger amounts of electricity—not to mention all the money and space spent on the hardware itself. But Urs Hölzle says this won’t be the problem it may seem. Hölzle is the man who oversees Google’s worldwide network of data centers, and he believes that efficiencies brought by devices such as Internet-connected thermostats, lighting systems, and self-driving cars will balance out the extra power needed to drive our computing centers.

Given this amazing expertise, I was wondering what happens if you start applying the same approach to an Aquaponic Farm rather than a Server Farm. What sort of efficiencies could be squeezed in? At some point, bringing an expert in Data Center design might be a key asset.

The Information Age is Dead, Long Live the Infrastructure Age.

Go to Article

I must confess that being aligned with Tim O'Reilly's vision makes me feel the venture's concept has a lot of potential. People are still "clouded" by social. Social, social, social. It might just be that we hit "peak social" in the sense that people have so much time in their lives. We might just be living in the most cognitive bombarded era of a generation, where billions of dollars are being invested to harvest people's information in order to sell products. Each moment you check your ex's profile, Facebook profits from it (as does Goldman Sachs and many other investors). Big Data is being used to understand human behavior, tweak it, exploit it, squeeze every penny and exceed quarter expectations. Rather than invading people's lives with information and products they don't really need, we might start using Big Data to improve the quality of people's lives. For EVERYONE. The recent move of DJ Patil to the Whitehouse is not to be taken lightly. I think it is the beginning of the deployment of smart government to address the real issues of out time: inequality, poverty, poor education, health, social tissue improvement, corruption, transportation, food, energy, democratic gridlock, economic related stress, etc.

Here is where The Internet of Things comes in. It is about applying the same sort of infrastructure and thinking that was deployed at Google, Facebook, Amazon et al. to address human (and Earth's) needs. It is about maturing as a global civilization and taking responsibility for our actions. It is about growing spiritually as well as materially. It's about empathy towards one another and the only planet we have. It is not about using data against people but for people. It is about building infrastructure that will last for the next generation and help lift people out of poverty. I think it starts by simply walking away of our current paradigm and building an alternative.

Humanity has built cathedrals in Europe's backward and impoverished backyard. Many incredibly smart people have already built the basal stones (Transistors, Solar Cells, GNU/Linux, Blockchain, DNA sequencing, etc) , it would be nice if we can build the new cathedrals of the 21st century and see humanity flourish as never before.

Blog # 9 Different layers to measure social impact.

In trying to shape the balance score card for a social enterprise I had the opportunity to research a lot of options. Research paper by Michael Bull, from the Center for Enterprise, Manchester Metropolitan Business School was an enlightening one. 

http://www.socialenterprisebalance.org/docs/3rd_annual_social_enterprise_conference_london_2006.pdf 

His paper develops a sector specific performance measurement tool “Balance”. “Balance” is a qualitative adaption of the standard Balance Score Card, though focusing on social enterprises.

Image source: Michael Bull’s research paper – Balance

I especially like how the author has modified the financial topic of the score card to “Return: The Multi-Bottom Line” to reflect the reality of a social enterprise where financial performance is just one of the many criteria of the enterprise’s success or failure.

Another refreshing article was from Ali B. Somers’ “Shaping the balanced score card for use in UK social enterprises”. http://1068899683.n263075.test.prositehosting.co.uk/wp-content/uploads/2013/03/SEL-Balanced-Scorecard-article.pdf

What I liked specifically about the author’s adoption of the BSC was that it reflected the reality of non-profit organizations in the UK and by extension India’s. While the ability to win and keep donors is a priority of US based non-profits as tax exemption is tied to personal giving, UK and India do not have similar regulatory incentives beyond a minimum.

Image Source: http://1068899683.n263075.test.prositehosting.co.uk/wp-content/uploads/2013/03/SEL-Balanced-Scorecard-article.pdf

The author amends the original Balance Score Card with 3 important changes – 

• An additional layer is added in which social goals are articulated above the financial perspective.
• The financial focus is broadened to include financial sustainability.
•  The customer perspective is widened to capture a larger number of stakeholder groups.

The key takeaways of such a model is that Social outcomes become the top most priority and so, can and should drive the performance strategy as illustrated. In the above picture, the arrows point to how a social objective can drive all the 4 BSC perspectives.

Essentially, while the BSC is an important tool for performance measurement, we can take cues from the above adoptions to generate score cards that are relevant to our enterprises. Ultimately like Ali B. Somers, I believe that social outcomes should drive strategy in social enterprises.

Blog # 10 Financial planning

According to Dun & Bradstreet, the biggest reason for small business failures is cash flows. They go on to estimate that poor cash flows might have might have been the reason for a staggering 90% of all small business failures! http://dnbsmallbusiness.com.au/Cash_Flow/

And so, as I went in search of cash flow management best practices, I hit upon Matin Zwilling’s article on Entrepreneur.com – “10 cash flow surprises that could kill your start-up”.

Mr. Zwilling documents 10 key principles to avoid a nasty surprise. While I leave it upto you to read his full article, here I am showcasing a few impressive points: 

 Project and document cash flows – A simple spreadsheet based projection can serve as a template over which we can and should see how our real life scenario is. This will help us identify deficiencies sooner than later.

 Seasonal Sales Fluctuations – Many a time, it is just simpler to project a smooth growth of sales. But in reality, almost any product has a seasonality involved to it. One of the most overlooked part of cash flow projection is this seasonality, which can be best avoided if we plan and project the same.

Faster Growth – what if our product was a success and the demand is high? You make more. But what is less known is how to make more with limited cash? If you are not sharp, in the excitement to grow faster, we tend to burn all cash in production and have not much for other important functions like bill payments and wages. There have been many such instances of success killing a company.

 New businesses don’t get normal terms – In general one must anticipate and accept the fact that our new vendors might demand payment faster while our new customers might demand a free trial period or more flexible credit terms. While this could indeed be a temporary phenomenon until vendors and customers are comfortable with your new business and products, this is something we must account for in cash flow projections and avoid a nasty surprise.

In essence, the truth for startups and small businesses is simple – Cash is King. But here is a question for you. Can we make good profits and still be broke?

You will find your answer here - http://www.entrepreneur.com/article/229048

Blog # 8 Identifying risks

It is now quite clearly understood that entrepreneurship is not necessarily risky. What is risky is not planning for the risks that one might encounter through the journey. Indeed, we cannot plan for everything that might happen, but it does seem a good idea to understand what risks our venture can encounter and how to mitigate or overcome those risks.

My research led to Cayenne Consulting. http://www.caycon.com/

Their mission, as their founder states, is ““To help entrepreneurs get their act together before they talk to investors.”

What I really liked was the founder Mr. Akira Hira’s article – “What Kills Startups”. 

http://www.caycon.com/what-kills-startups.php

The paper talks about Risk and Reward and offers entrepreneurs a framework to manage risk. According to him, risk can exist in any situation where there is a possibility of an outcome that we would rather avoid. This clearly implies that almost every day to day situation can carry risk. So, as in life, in business too it is simply not prudent to worry about every single risk. So one of the first things an entrepreneur can do is classify risk into categories –

•  Ignorable Risks (Quadrant A)
•  Nuisance Risks (Quadrant B)
•  Insurable Risks (Quadrant C)
• Company Killers (Quadrant D)

It would be good to note how Mr. Hira has given risks 2 dimensions – Consequences and Likelihood. Quite naturally, the risks that have higher consequences and a higher likelihood should demand our attention the most.

The quadrant also lets us answer the question – Does the benefit of mitigating a risk outweigh the cost of doing so? For me, this is most critical in identifying risks that can be tackled fastest, easiest and simplest. Basically the low hanging fruit needs to be gathered first.

Going further, the risks in Quadrant D can generally be classified into the following - (I have also provided some of the questions I am asking my own social venture plan)

• Market Risks – Because the product caters to a younger population, is the price of my product higher than their parents ability to purchase?
• Competitive Risks – Because of potential government subsidies, can a competitor launch a similar product before mine?
• Technology & Operational Risks – What if user information stored online is under threat of hacking?
• Financial Risks – Do I have sufficient funding to scale up? What about cash flow?
• People Risks – What if people posing as company agents defraud customers?
•  Legal & Regulatory Risks – Does my product have higher taxes because it is a GPS based device?
• Systemic Risks – Can people get loans/EMI to buy my product?

My question now is, is there a social risk too? Can my product overcome the mindset of teenagers who are loath to be tracked?

Blog # 7 Planning and implementation for venture

It is quite clear that planning for new ventures in inherently more challenging than for established organizations. Drawing up a business plans is the norm, more and more entrepreneurs are realizing that business plans are bearing less and less resemblance to reality.

While business plans have their place in developing and financing a new venture, the article “Milestones of Successful Venture Planning” by Zenas Block and Ian C. MacMillan in Harvard Business Review identifies key milestones that any business will have to pass.

https://hbr.org/1985/09/milestones-for-successful-venture-planning

The authors argue that identifying milestones over the project’s life enables planners to both learn from experience about the enterprise’s viability and make adjustments in strategy and goals as necessary.

They also emphasize the three advantages of this approach as below -

1. Helps avoid costly mistiming errors.
2. Gives logical and practical milestones for learning and for reevaluating the entire venture.
3. Offers a methodology for “replanning” based on a growing body of ever-harder information.

And refreshingly, the authors do not have the vague milestones or goals this is usual in such articles.

Here are the 10 Key Milestones for a new business venture –

1.  Completion of Concept and Product Testing
2.  Completion of Prototype
3. First Financing
4.  Completion of initial plant tests
5.  Market Testing
6. Production Start up
7.  Bellwether Sale
8.  First Competitive Action
9. First Redesign or Re Direction
10. First Significant Price Change

A detailed idea of each of these points is available in the article, but I especially like how they have provided emphasize on events like “re-design” and “price change”. According to them these are events that shape the future course of the organization, since it shows the difference between what the company has offered and what the market needs.

In essence, a milestone based venture plan is a process of discovery and helps us be more adaptive than a strictly time based plan. But they key is in proper tracking and identifying the correct event that matches up to the milestone.

Blog # 6 Selecting a perfect distribution network: reaching end consumer

When it comes to business systems and organization, the internal structure of the organization is not the only one important. Of critical importance is the systems and organization of the arm that reaches out to its customers - The Distribution Network. There are many ways an organization distributes its products or services. So how do we choose which one channel or a combination of channels suit an organization better?

http://www.yourarticlelibrary.com/production/5-important-factors-affecting-the-choice-of-channels-of-distribution-by-the-manufacturer/1100/

The article above lists 5 important considerations when we decide to choose distribution channels for our products, namely -

1. Product Considerations - Weight, Nature, Perish-ability etc.

2. Market Considerations - Buyers, Type of Buyers etc.

3. Government Considerations - License holders etc.

4. Manufacturer Considerations - Financial strength, reach etc.

5. Others - Cost, availability etc.

But I believe that the most important point is - Consumer Behavior.

My product, “Firefly”, is a wearable tracking device designed for the teen and the young urban woman. So ideally I should research the best way to reach out to this group. In actuality, no.

While the “Firefly” maybe “consumed” by teenagers, it will mostly be bought by their parents or well-wishers or close relatives, who will be much older. So the target audience for our distribution network is now people above the age of 40 or so.

So the question now arises, how to reach out to people above 40 years, who will mostly be at work during the week? Here are our candidate distribution channels.

E-Commerce Websites: While we could argue that in today’s age an online presence is an absolute must, the reality is simpler. Our research suggests that it is far easier and cheaper to sell our product through an established e-commerce site like E Bay or Amazon or Flip-kart. The positives are enormous - no brick and mortar store overheads, less reliance on manpower to sell, quick feedback from user communities etc. But will it reach the 40 somethings in India, where many are still not trustful of an online purchase, may not own a credit card and possibly have limited or intermittent access to the internet?

Retail Store Chains: This is one of the more traditional approaches. Organized Indian retail, though a relatively new phenomenon is slowly establishing itself across cities and towns. In my opinion, my product will have a wider reach with stores than with an online presence only. But this comes at a cost - Shelf space wars, higher rent, etc.

Direct Marketing Agents: India has a long tradition of agents or salesmen selling their wares, especially those that are focused on home makers. In fact some of India’s leading home product brands were built on dedicated and professional sales force. But of late there has been a gradual erosion of trust on salespeople. Coupled with the fact that staffing and training a sales force of required critical mass is a significant effort both in terms of money and time, this method may not be an ideal one for a small start-up.

Of course, there are many other ways to build a distribution channel. A product like the “firefly” can reach out to its target customers through Schools, NGOs, government programs etc. But what is the channel that will be most cost effective and scalable for the “firefly”? Suggestions are most welcome.

Yunfan Zhu Blog 6: Creating a Business System and Organization That Delivers

In the article “Organizational Blueprints for Success in High-Tech Start-Ups” the author listed five different business models. The star system which only recruit the top talent. The commitment system which is consistent. The Bureaucracy system is all about detailed descriptions with a “the ends justifies the means” kind of mentality. The Engineering system which has a skunk-works mentality, they innovate and that’s their advantage. And the Autocracy system which doesn’t leave too much freedom to the team, there isn’t much moral beyond the professional environment.

I find this article to be very interesting because I just couldn’t help to relate this article with professional sports teams and I want to discuss the results of the star system and the commitment system using professional basketball teams. I picked these two systems because they have a clear upper hand when compared to other three systems and they are very hard to manage.

Professional sports teams in a way are just like business ventures, only they do it in a more obvious and entertaining approach – by physical contact and TV broadcasting. 

To use the National Basketball Association as example, the 2010-2014 Miami Heat team which had LeBron James, Dwyane Wade and Chris Bosh, three of the major franchise players arguably the best players in the league at the time. The Heat also recruited some league veterans to assist the “Big Three”. The result? The Heat became one of the most formidable team in the league and won back to back championship seasons in 2012 and 13. However, after losing to the San Antonio Spurs in 2014 NBA playoff final LeBrone James left the team and went back to Cleveland Cavaliers, a younger team with better talent than the Heat. The Heat did not make the playoffs in 2015 they were ranked 9^th in their conference. This would be the major issue with the star system, it relies too much on individual abilities and has no value to the stars once there’s a better offer from a more promising firm. That being said, it still produced two championships which is enough for the investment. 

Contrary to the Heat, San Antonio Spurs would be the perfect example of the commitment system. Assumed head coach position in 1996, Gregg Popovich is the longest tenured active coach in both the NBA and all US major sports leagues. During his tenure, he lead the spurs to five NBA championships, an accomplishment only achieved by four other coaches. He used the team No.1 draft on Tim Duncan in 1998 and later drafted Manu Ginóbili in second round draft in 1999 and Tony Parker, a lower first round draft in 2001. Popovich designed his team around these three players and they are still playing and winning after almost 15 years which is almost unheard of in the professional sports world. The Spurs played the Heat in both 2013 and 2014 playoff finals. The Spurs lost the 2013 title with a devastating 3-4 loss, LeBron Jame’s key plays in game 6 was quintessential. Nevertheless, the Spurs played the Heat again in 2014 and dominated the Heat with a result of 4-1.

It is obvious that commitment organizations may not be the best when it comes to hitting homeruns of scoring in crucial seconds, but they are likely to be very consistent. Maybe they can’t hit home runs but they’ll get on base and help the team score runs. Nevertheless, there is only one Spurs in the NBA which indicates that the commitment system is somewhat unstable and harder to manage. It’s very hard for a commitment firm to stay diverse with the same workforce. Especially when diversity has become more and more important in today’s business world. Moreover, with the high turn-over rate of startup firms it is also very difficult to retain the same workforce. The Spurs are successful because of Gregg Popovich, a leader who has the ability to operate the commitment system. In other words, the commitment system will only work with a great CEO who believes what he or she is doing. Do you agree with my analogies and what approaches would you take to make the commitment system more stable for startup ventures?    

Yunfan Zhu Blog 7: Implementation Planning

There’s an old Chinese proverb that to accomplish something great a person would need three things. Great timing, great location and peace among the people (team). That is essentially what this week’s topic is about. How to make the right things happen at the right time. Out of the three elements, we’ve discussed about the importance to build a functional team last week (peace among the people). And the inventing of Internet has ensured businesses without location advantages to be reachable by potential consumers by a few clicks. Thus the most important element of successfully accomplish a venture is to select the best timing. Sounds like an old story out of an old book with Gypsies and crystal balls, but reality confirms with this theory (like we talked about in class). In the article Launching a Risky Project? Learn from Entrepreneurs in Africa,  

Rule three states: “Keep costs low in the beginning and plan for scalability… Start with the smallest version of the business that has a shot at success, and plan to learn and grow from there.” This is a profound statement, because it is really saying is to have a potentially successful business model and through experiments and experience it will be revised and be ready when the right time comes.

An old Chinese general called Sun Tzu once wrote an international best seller called “The Art of War”. This article summarized a six step strategy from “The Art of War” in regard of timing.

http://www.mikemahler.com/online-library/articles/aggressive-strength-living/six-steps-to-improve-business-timing.html

1.       Notice the signals of timing

2.       Be in tune with the timing of potential partners

3.       Be aware of the relationship between your objective and your timing.

4.       Use your intuition to improve your timing.

5.       Back up your intuition with data and planning.

6.       Use common sense

Timing is a great advantage of iCraftPath. The original craft movement was in fact diminished after the 1920s. However because of the financial crisis in 2008, a great many people lost their jobs and had free time on their hands. Due to the hatred of corporate America and the fact they don’t have anything to do at the moment, many people started to hand make crafts and sell thing to express their feelings and to earn some extra income. In just seven years the movement has grown exponentially and started to have a rough look of a modern industry. Pittsburgh is a rather small city compared to some of the metropolitan cities where crafts movements thrives. Thus the craft movement wasn’t caught up in Pittsburgh until recently. There hasn’t been any education services tailored specifically for crafters and there aren’t any community organization to unite the craft community to grow its market shares. What iCraftPath can do better at timing is to be in tune with the timing of potential partners. There are many resources within the city of Pittsburgh that can be utilized to help crafters further their businesses and to partner with local organizations can also create a sense of community for crafters who participate. So what do you think about the old Chinese proverb and its implications on planning business implementations? 

Yunfan Zhu Blog 8: Opportunities and Risks

G.K Chesterton is arguably one of the best and most underrated British writer after Charles Dickens. What makes him so exceptional, in my opinion is his view on paradox. He believes the rule of universe is in fact paradoxical. The example he gave to explain this abnormal take on the universe is: if a solider at war wants to survive, he must first forget the notion of survival, he mustn’t afraid to die.

And that is my take on opportunities and risks when it comes to starting a venture or become an entrepreneur. It is paradoxical, you can’t have opportunities without risks and you can’t have risks without spotting one or two opportunities. Which reaffirms the quote we saw in class that

”One of the greatest myths about entrepreneurs is that they are risk seekers. All sane people want to avoid risk.”

Both risks and opportunities have much to do with the fact that life is full of uncertainties. It is human nature to wonder, speculate, predict and almost inevitably gamble on such uncertainties. Entrepreneurs know that and they’ve been doing great things in using technology to predict such uncertainties like data analytics and machine learning technologies. Like we’ve discussed in class opportunities can be explored and risks can be mitigated. Although what’s interesting is the acknowledgement of you can’t get rid of risks.

This article https://hbr.org/2012/06/managing-risks-a-new-framework in Harvard Business Review talks about the framework of managing risks. It addresses “Risk management is painful—not a natural act for humans to perform.” It explains the reason behind such fact is because risks have much to do with chances and “we tend to be overconfident about the accuracy of our forecasts and risk assessments and far too narrow in our assessment of the range of outcomes that may occur”.

There are many risks when it comes to iCraftPath for example there is a disruptive energy within the local community. Community leaders from different craft fairs are very hostile against each other, ignoring the fact they are not only competitors but also partners at the same time. Such phenomenal may undercut iCraftPath’s effort in creating a community based educational resources. Nevertheless it is also an opportunity for iCraftPath to organize distanced community leaders, unite forces and reach the real potential of the crafting market in the city of Pittsburgh. To mitigate this risk and to turn it into an opportunity iCraftPath needs a facilitator (this would be both a people need and a market need), a liaison who can have a peaceful discussion with all craft community leaders. So what do you think about the theory of risks being opportunities and opportunities will bring risks? That they are essentially inseparable?  

Yunfan Zhu Blog 9: Determine Social Impact

To determine a venture’s social impact is probably one of the most difficult tasks when comes to create the business plan for social ventures. As a matter of fact it is one of the most difficult tasks for all nonprofit arts organizations. To predict the venture’s future is already close to impossible to predict the venture’s impact to the society in the future is simply devastating. NPOs rely heavily on government and foundation grants, and for every grant the organization applies, the grant proposal must state how this grant will benefit the organization and its community. Essentially, a description of the grant’s social impact.

This article highlights the importance or assessing social impacts for ventures and it gave a few examples on how entrepreneurs measure their ventures through different matrix:

http://www.theguardian.com/social-enterprise-network/2012/dec/12/best-bits-measuring-demonstrating-impact

  

The reason of why determine the social impact is such a difficult task is because there are so many other factors to a social change. It is almost impossible to predict social impacts precisely without assessing large amount of facts and data. Moreover, it requires the founders of ventures to define success in terms of future expectations. Sounds perfectly innocent and harmless but it is really asking the founders about what exactly is the venture, what they want out of the venture, why do they start the venture, what are the motives and passion behind the venture and eventually to the philosophical question we’ve been struggled to come up an answer with since the start of human civilization: “Who am I and what do I want to make out of myself”. Some people never figure that out, some don’t even have the ability to ask themselves in the first place.

For the cynical and resource lacking nonprofit arts organizations the development department (the department which apply all the grants) usually apply the “reverse thinking” strategy. Instead of looking at the specific program and the community as a whole. Most organizations first look at the grants and foundations they are applying to and assess program’s social impact according to the grants guideline or the foundation’s mission. If the foundation gave most of its grants to programs that support inner city education, then the organization’s program would most certainly unfortunately, although this cheating code like approach may get the job done it cannot be applied to determine a venture’s social impact (I guess you can if you are determined to start a nonprofit). Because like we learned in class, we have to ask the question “what would happen anyways without our venture?” which sometimes lead to the depressing fact that the venture may have little to contribute to the society. And when that happens the venture founders have nothing but to reevaluate the social impact,

iCraftPath’s mission is to help educate local crafters so they’ll know better when it comes to establish their own microbusinesses thus generating more profit and stimulate the entire industry as a whole. But what would iCraftPath’s social impact be? Traditionally speaking crafters exist because they are somewhat “anti-social”, they don’t believe in mass production and they want more human interaction, creativity and originality. They are charging to the direction that opposites the rest of the society. Moreover, when consider the economic environment of the society as a whole we must evaluate how resources allocated. If crafters have better businesses and can sale more products, who would suffer from it? People only have so much money to spend, if the craft industry is going to grow what industry is going to shrink? The surface of this venture is to help crafters and we can simply evaluate the social impact by assessing the number of crafters who registered for our services and their level of satisfaction. But if we look closer to the issues we can clearly identify that this is not a venture to just help crafters grow their businesses, this is a venture to help crafters “steal” businesses from traditional department store and mass production retailors. Thus, to evaluate the social impact of iCraftPath, we not only have to assess the crafters who are affected by our venture, we’ll also have to look at the financials of local chain supermarkets and department stores. Do you think it is necessary for entrepreneurs to look beyond their ventures and look into a bigger picture when it comes to measure social impacts? What do you think about some of NPOs’ “I’ll say whatever to your liking” approach in measuring social impacts?