Great British Businesses

With all the bankruptcies and job losses of recent months, and as we watch sterling slide against all major currencies, you’d be forgiven for thinking that UK plc is heading for the economic scrap heap. And in many ways it is – just look at our total government and personal debt, and the predicted budget deficits over the next few years. Yet, despite all this doom and gloom, there are some areas of the economy that have a bright future.

It may seem that all the UK has exported in the past few years is an army of borrow-to-let investors, but rather than focus on everything that was wrong with that, I’d like to look at what we’ve done right – and to celebrate some of the successful businesses that have been created by the real entrepreneurial spirit that exists in our country.

So, here are some world class companies that I’m proud to say are British:

  • Dyson – Reinvented the Vacuum Cleaner.
  • Imagine Technologies – Makes graphics chips for mobile devices, including the iPhone.
  • ARM – Makes microprocessors. Has gone from powering the humble Acorn computer, to nearly a quarter of all electronic devices in the world, including the iPhone.
  • HSBC – Although a multi-national bank, they are headquartered and listed in the UK, and have British heritage (founded by a Scot). The only major UK bank not to need bailing out as a result of the financial crisis. They even sold their Canary Warf offices at the peak of the boom, and bought them back recently for alleged £250 million profit.
  • Tesco – Like marmite, you’ll either love them or hate them, but there is no doubt they are good at what they do! Now the world’s fourth third biggest retailer, they have led the way in analysing their customer data (club card scheme) and retailing via the Internet. Watch out Wal-Mart!.
  • BBC – Although owned by the British tax payer, and some might say a little on the bloated side, they certainly produce some world leading content (Top Gear, Blue Planet, BBC News Online) and have pushed out some innovative technology over the years (BBC Micro, BBC iPlayer, Dirac Codec).
  • Rolls Royce – Have mastered manufacturing as a service by leasing their engines by the hour, and providing lucrative maintenance and repair contracts.

The list is going to start small, so please send me your suggestions and I’ll try to add them. I’d like to stick to British firms who have been truly innovative in recent years, rather than just listing out the FTSE 100.

Howto: Setup CloudFront as a Content Delivery Network

It’s actually incredibly easy to begin using a Content Delivery Network (CDN) such as Amazon’s new CloudFront service, and in this post I’m going to show you how.

Background

So what is a CDN and why use one? Well CDNs are essentially a global network of file servers that work together to serve static content such as images, flash, css and javascript files. They are useful if you want to serve up content faster to your users as the servers are strategically placed at edge locations all around the world and incoming requests are automatically routed to the server closest to the user. This reduces the latency of HTTP requests and makes pages feel “snappier”. They can also be useful to reduce load to your core servers.

Update!

Since writing this post I found there is a firefox extension which gives you a GUI interface into CloudFront. I haven’t tried it yet, but you can read about it here.

How to use Amazon’s S3 and CloudFront CDN

Simple Storage Service

If you haven’t already, signup for a CloudFront account with Amazon Web Services. You’ll also need an S3 account subscription, as the two work hand in hand, but Amazon should set this up automatically.

Download an S3 client / GUI such as:

Login to Amazon Web Services and download your access keys. There are two you need, the access key id and the secret access key. You can find these in Your Account > Access Identifiers.. You’ll then need to configure your chosen client to use these keys.

Open up our S3 client and create a new bucket. You should avoid using underscores in your bucket names (although they will technically work, you won’t be able to create a distribution later via CloudFront). You might want to read the full restrictions on bucket names first. I recommend you follow the additional instructions to conform with the DNS requirements.

Using the S3 client, upload some files. You should then be able to access them at either of the following urls (substituting your bucket name and filename as appropriate):

  • http://bucket-name.s3.amazonaws.com/filename.jpg [example]
  • http://s3.amazonaws.com/bucket-name/filename.jpg [example]

Cloud Front CDN

Now that your files are accessible on S3 the final step is to link your S3 bucket to a CloudFront “Domain Name”. This process is known as creating a distribution, and is actually pretty simple.

First download the CloudFront Curl Perl Script from here. Then set up a .aws-secrets file in your home directory that contains your account keys. Make sure it’s has 600 permissions. The contents of the file will look something like:

%awsSecretAccessKeys = (
    # primary account
    primary => {
        id => '<Your primary AWS Access Key ID>',
        key => '<Your primary Secret Access Key>',
    },
							
    # secondary account
    secondary => {
        id => '<Your secondary AWS Access Key ID>',
        key => '<Your secondary Secret Access Key>',
    },
);

Next create a text file with the XML instructions needed to create a distribution, it should look something like this:

<?xml version="1.0" encoding="UTF-8"?>
<DistributionConfig xmlns="http://cloudfront.amazonaws.com/doc/2008-06-30/">
   <Origin>mybucket.s3.amazonaws.com</Origin>
   <CallerReference>20080930090000</CallerReference>
   <Comment>Creating my first distribution</Comment>
   <Enabled>true</Enabled>
</DistributionConfig>

Replace the origin with your bucket’s url. You’ll need to use the bucket-name.s3.amazonaws.com format. The caller reference is just a timestamp.

Save this file as create_request.xml and then run the following command to execute it:

./cfcurl.pl --keyname  -- -X POST -i -H "Content-Type:text/xml; charset=UTF-8" --upload-file create_request.xml https://cloudfront.amazonaws.com/2008-06-30/distribution

This command will return some XML, which, if successful, will contain the domain name you can use to access your files via the CloudFront CDN. NB: It can take a few minutes for this domain to become active in the DNS and so you should wait a while before trying it.

You can then access your files at http://unique-id.cloudfront.net/filename.jpg [example]

And that’s it! You’re now ready to use this domain to host your static files for your sites. You could go a step further by pointing a subdomain of your site as a CNAME record to this domain.

iPhone over the air sync with Google Calendar

We’ve been desperate for a centralised calendar solution that can sync with all our desktop PCs and iPhones for a while now, and yesterday one of our developers, Matt, found a solution for us.

It combines the following technologies:

Essentially Google Calendar is used to provide a central calendar, this is then synced to the iPhones via Nuevasync, which provides a free exchange interface. The calaboration tool makes it easy to sync your iCal with the Google Calendar, and then MobileMe is needed if you want to have a private calendar on your iPhone as well.

Matt has written some in-depth instructions on how to set up over the air calendar syncing on your iPhone, over on his blog.

Business Angel Investments

Part of our strategy at Fubra is to invest a portion of our cash in business start-ups. In this post, I’m going to give you a few inside “secrets” as to our thinking when companies approach us for funding. If, after reading this, you think we sound like a good match then you should get in touch.

What we look for in an investment opportunity…

  • An amazing unique product.
  • Backed by a team of competent, motivated and hard working people who can deliver.
  • The ability to build your product yourself. For web sites, this means you need a developer in your team as an equity partner. We’re not interested in ideas that someone else has to build, as costs will quickly escalate and we may as well do it ourselves.

What we can provide…

  • Cash.
  • Marketing assistance – We have a network of well over 100 websites, 6 million visitors per month and 3 million subscribers – so plenty of scope for cross promotion. We can advise on all aspects of online marketing e.g. PPC and SEO.
  • PR assistance – We have an in-house PR team and press contacts database. Our sites regularly feature in the mainstream press; printed, radio and TV.
  • Development assistance. We have Linux, PHP, MySQL and JavaScript gurus who can assist with complicated bits of coding.
  • Data mining – We have web spider experts who can help analyse and extract data from around the web.
  • Hosting – We have racks in several data centres, including our own 14 rack private DC at our head office in Aldershot. We have also developed a hosting cloud infrastructure to help scale web applications to meet demand and this would be available to you.
  • First line customer support – When your product takes off, we can integrate it into our support system and provide first line customer service.
  • Office space – We have a 4000 sq ft office in Aldershot, which has a few rooms to spare.
  • Mentoring and advice – Fubra has been around since 2000 so we know a thing or two about building web businesses. We would make this knowledge available to you as needed.

What we ask for, from an investment…

  • A Realistic Valuation – You shouldn’t be looking to get rich from the investment round itself. The cash is there to help the business succeed, and that’s the point where you will be financially rewarded. How is your business worth half a million pounds with no sales or customers?
  • Thrift! – You should keep your overheads as low as possible for as long as possible. Do you really need to hire a PR agency? If you’re product is that good it should sell itself. Can you justify paying yourself a “market” salary? If you are paid a full market salary, what risk are you taking to justify your equity stake?
  • Hard work and delivering on promises.

It could be argued that now is a better time than ever to start up a business. While established firms are more focused on cutting costs than delivering new products, start ups can seize the opportunities they miss.

Cash is king (and always was in my opinion!)

There is an interesting article in this week’s Economist, All you need is cash, which talks about the new rush by businesses to accumulate cash in contrast to the massive leveraging that has taken place over the past few years. Of course, not all companies took on huge loans to expand, and the ones who hoarded cash are now in a much stronger position relative to their debt-laden counterparts. Just to look to Japan where their cash rich companies are on target to make a record year in acquisitions. So far they have spent $78 billion on foreign takeovers, as they snap up other firms at knock down prices.

It has always been my view that companies should aim to keep a reasonably large cash buffer. It means that other people will want to deal with you as you have a strong credit rating and you can pay your bills on time, that there’s money in the pot for a rainy day, but most of all, it means that you can be ready to invest in value opportunities when they occur, without piling debt on to your balance sheet and being at the mercy of the credit markets. As Warren Buffet says, be fearful when others are greedy and be greedy when others are fearful.

At my company, Fubra, we prefer to leverage our knowledge and intangible assets rather than our balance sheet by seeking investments where we can add a lot of value for both parties at little marginal cost to our existing commitments. We look for companies who are a good fit to our current operations, and who have realistic valuation expectations, but if they meet those criteria we can act fast. This is the advantage of having strong working capital.

Of course, having cash has some downfalls. While Barclays are happy to pay Abu Dhabi and Qatar 14% interest on their cash, they only pay their sterling business savers 2.5%! All the more reason why you need to be ready to spend it when the right opportunities arise.

The Obama Apollo Project

Although I’m fundamentally a capitalist, and a strong believer in the power of free markets to allocate capital effectively, I’m not an absolute market libertarian. So whilst I’m convinced that an economy based on competition and creative destruction is far more able to generate productivity growth and technological advance than one that’s centrally planned, I do recognise that there are certain areas of industry that are often neglected or even avoided by the private sector.

Companies are bound by their shareholders to seek a profit, and so they are less inclined to invest in areas of ambitious scientific research where returns are neither immediate nor guaranteed, or in blue sky projects where the route to profit is not even apparent. It is in these areas, where the private sector is unwilling or unable to invest, that a government can in a way that’s beneficial to the long term success of an economy.

Although there have no doubt been many failures, there are numerous examples of government-led research projects that have changed society for the better, e.g.

  • The Internet (US Government – DARPA)
  • Moon Landings (US Government – Apollo Program)
  • Radar (British Air Ministry in World War 2)
  • GPS (US Government – Department of Defense)

It’s because of this, that I’m optimistic that if (when?) Barack Obama becomes President he is going to support a government-led, apollo-like, energy project to rapidly accelerate the world’s transition to renewable fuels, whilst turbo charging the economy and weaning us off our dependancy for cheap credit at the same time. And I’m optimistic that it could succeed.

According to Time Magazine:

He wants to launch an “Apollo project” to build a new alternative-energy economy. His rationale for doing so includes some hard truths about the current economic mess: “The engine of economic growth for the past 20 years is not going to be there for the next 20. That was consumer spending. Basically, we turbocharged this economy based on cheap credit.” But the days of easy credit are over, Obama said, “because there is too much deleveraging taking place, too much debt.” A new economic turbocharger is going to have to be found, and “there is no better potential driver that pervades all aspects of our economy than a new energy economy … That’s going to be my No. 1 priority when I get into office.”

If Obama really does make it his number one priority when he gets into office, and he has the electoral mandate behind him, then that political will could make a huge impact.

The New Apollo Program from the Apollo Alliance

The idea for a new Apollo program to build a new energy economy has been around since the Apollo Alliance was founded in 2004. According to their website, the program calls for investing $500 billion over 10 years on steps to:

  • Generate clean power (25% from renewable sources by 2025)
  • Improve energy conservation and efficiency
  • Cut energy bills
  • Improve US technological and industrial capabilities
  • Create 5 million green-collar jobs

These are pretty ambitious targets, particularly as they want to cut energy bills at the same time as raising the amount of power from renewable sources, but so was putting a man on the moon!

So how much is $50 billion a year?

10 Years, $500 Billion, 5 Million Jobs
The program would generate and invest $500 billion over 10 years. An annual investment of about $50 billion a year, the Alliance notes, is a smaller share of the gross domestic product than what was spent on the Apollo space program, about one-third of current spending in Iraq, and roughly half of what was just lent by the federal government to insurance giant AIG.

Could it be that by backing this project, Obama has the answers to see us out of the financial crisis and solve global warming simultaneously? If we can put a man on the moon, we can certainly hope so.

References:

– Time.com: Why Barack Obama is Winning

– Apollo Alliance: The New Apollo Program

World’s biggest cruise ships, by size

As we are thinking of going on a cruise for our honeymoon next year, I thought I’d do some research into the different cruise ships in use today. Of course there are many factors you could compare, but to start with I’m interested in just one thing: the size!

Cunard Line Limited

Maiden Voyage Name Gross Tonnage Length Height Passengers
2004 Queen Mary 2 148,528 345m 72m 2,620

Royal Caribbean International

Maiden Voyage Name Gross Tonnage Length Height Passengers
2006 Freedom of the Seas 154,407 339m 64m 4,370
2009 Oasis of the Seas 220,000 360m 65m 5,400

P&O

Maiden Voyage Name Gross Tonnage Length Height Passengers
2008 Ventura 113,000 290m ? 3,092
2005 Arcadia 86,799 GRT 290m ? 1,952

Celebrity Cruises

Maiden Voyage Name Gross Tonnage Length Height Passengers
2008 Celebrity Solstice 122,000 314m ? 2,850

Why can’t governments just print money to fund spending?

This is the first post of what I hope will become a series of posts on my blog to discover what money is and how it works. We take money for granted as something that can be exchanged for goods and services, but it is in fact a complicated instrument who’s real value and supply is always changing.

I’ve wanted to write some blog posts like this for a while, but with all the financial turmoil that has hit the world recently, and the mind boggling amounts of money that is being used to prop up the banking industry I think now is particularly good time.

European leaders announced today that they would be bailing out their banks to the tune of nearly £1.5 trillion…. so the theme for my first post is:

Rather than raise taxes or borrow, why don’t governments just print money to fund their spending?

Central banks can literally create or destroy money. They do this every day in order to manipulate the money supply in the economy in an attempt to steer inflation to within a target range. The only problem with creating new money, is that the more they create, the less each unit becomes worth. If they create too much of it, and give it away too cheaply, then it’s purchasing power diminishes and people lose confidence. This can ultimately lead to hyperinflation and the destruction of the currency.

It happened to Germany after World War I, when the government attempted to print money to balance their budget. This lead to hyperinflation peaking at 3,250,000 % per month (prices double every two days). The currency became so worthless that people would need a wheel barrow full to buy a loaf of bread, and would use it as an alternative to firewood to fuel their stoves.

John Maynard Keynes described the situation in his book, The Economic Consequences of the Peace:
“The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance.”

So when a government needs more money, rather than create new money and risk hyper-inflation it will borrow the money through the issuance of government bonds. This by itself doesn’t increase the total money supply.

Attack of the Wee PCs

Anyone looking for an ultra portable / mini laptop / sub notebook / netbook is now spoilt for choice. It seems that after the OLPC (one laptop per child) project announced they were aiming to build an ultraportable device for $100, every manufacturer wants a piece of the pie.

Name Screen Size Weight Price
ASUS EEE PC 7" – 10" 0.92 – 1.1 KG £160 – £340
OLPC XO-1 7.5 1.45 KG $200 ($400 give one get one)
Dell Mini 9 8.9" 1.035 KG £269 – £299
Acer Aspire One 8.9" 0.99 – 1.26 KG £198 – £269

References:

Wikipedia – Comparison of Netbooks