The Speed of Innovation

Published August 15th, 2007 edit replace rm!

Speed of Innovation

Frederik Andersen of Goodmorning Technology in Denmark gave a great talk last night at Innovation Center Denmark in Palo Alto on the speed of innovation.

His design firm is working on all kinds of interesting projects using a method which I found very reminiscent to what we do as agile web application developers.

Firstly Frederik said his clients always want them to provide a straight path to a successful product design. He says that this is pretty much impossible due to what he calls the dual speeds of innovation going on in everything.

What this means is that designers (and developers) have traditionally focused on features. Features are basically lead by the designers or developers of the project, thus the speed of feature innovation is pretty much up to the designers. However as he says there is another slower path of innovation which is much more evolutional, which in particular involve peoples habits and cultural changes as a whole.

This is a lot harder to control and while new features can help nudge things in a direction, it can’t control where you’re going.

His recommendation is to not go straight for the end goal, but rather realize from the beginning that your current goal is but a point in a probably unpredictable future path.

An example of this was the whole Virtual Reality craze of the 90’s. The technology was there (VRML) but the cultural changes weren’t quite there yet. Now Second Life has taken off in many peoples imagination, although he as well as I think it’s probably not anywhere near the final point along a very wiggly path.

So what can you take along from this? Basically you need to keep innovating and keep testing. Smaller less obvious paths, might be better rather than trying to change the world in one go. This is of course what agile development is all about as well. See if features work, if they help the culture or the market to evolve.

This is pretty much what we are doing with Agree2 as well. It is now very different from what I envisioned a year ago. I’m sure in a year once we have real users using it will have evolved some where I haven’t planned. That said we do know what direction we want to head more or less and in particular where we don’t want to head. The path though is not entirely up to us.

Don't go changing that contract on me!

Published July 30th, 2007 edit replace rm!

A good and important ruling was made the other day in the 9th Circuit Court in the US about amending contract terms. It is important for anyone who has a Terms of Service, User Agreement or similar on their site to understand this and what it means for them.

In a nutshell the ruling says that you can’t just go changing user agreements and expect the changes to be valid, even if you say in your original user agreement that you can change it whenever you want.

An example of one of these terms that likely isn’t valid anymore is in the “Basecamp Terms of Service”:

37signals reserves the right to update and change the Terms of Service from time to time without notice. Any new features that augment or enhance the current Service, including the release of new tools and resources, shall be subject to the Terms of Service. Continued use of the Service after any such changes shall constitute your consent to such changes. You can review the most current version of the Terms of Service at any time at:

While 37 Signals are generally considered good guys by most people (including me) and therefore probably wont ever have a problem due to this, it would only take one irate customer and one small contract change to cause problems.

The problem here is while the court said you can theoretically make changes, the burden of proof that the other party has read the updated agreement is really on you the web service operator and not on your users. Therefore making it the user’s responsibility as 37 Signals does above to monitor this is not OK. A couple of approaches would be to email the users every time you make a change, you could also force the users to accept the new agreement on login like PayPal does.

What I think is important here is that the ruling basically says what I’ve been saying all along about contracts. Plain english rules written by the parties involved and not lawyers is what is important. Don’t try to outwit anyone and most importantly don’t do things unilaterally.

There are no such things as magic clauses like the above that magically lets you ignore the fundamentals of contract law. No matter what the lawyer says if you or the other party don’t understand the contract it is not a contract. It is an agreement, and you can not be in agreement if you do not understand what you are agreeing to.

For more on this ruling see CL&P Blog, Eric Goldman and AdamsDrafting.

For the basics of Contract Law read my article Pragmatic Contract Law for Entrepreneurs, it really isn’t particularly difficult to understand.

Also while you’re at it, why don’t you go register for the Agree2 2nd beta. We will are trying to make this apparently complex subject simple for anyone to understand.

Silicon Vikings talk on Danish Entrepreneurship

Published July 1st, 2007 edit replace rm!

The other day I went to a lunch with the Silicon Vikings who are an association of Scandinavian’s and interested parties who meet up once a month to network and talk about specific issues. If you are Scandinavian and in the Bay area you should go, it is definitely and interesting crowd of Scandinavian’s who now call the Bay Area home.

The lunch meeting I went to was called SV Lunch: Best Practices in Support of Inbound Entrepreneurs in Silicon Valley. The talk was given by Marianne of Innovation Center Denmark in Palo Alto.

Their job is to advise Danish entrepreneurs moving into the valley for both funding and market reasons in how to do so. However they also have a secondary function of advising various agencies in Denmark on getting more like Silicon Valley.

WellsFargo HSA - for the steam punk generation

Published June 19th, 2007 edit replace rm!

Sorry international readers, here is another US focused article.

HSA’s are the greatest thing in Health Care in the US since, well the inventions of Aspirin, Penicillin and Peptobismol. Unfortunately hardly anyone has even heard about them, which is a shame as they are ideally suited to people in startups and a fantastic deal.

I wont go into why HSA’s are so good as Auren wrote a great piece on Health Savings Accounts here. This was written in 2006, they are even better for 2007.

To sign up for a HSA you need to find a bank that offers them. I went ahead and signed up for a WellsFargo HSA account. It was recommended by my BlueCross High Deductable Health Plan and I so far like WellsFargo as a bank.

Do S-Corp's provide tax advantages over LLC's?

Published June 18th, 2007 edit replace rm!

Note, this is all US related. You should probably skip the headache it’s certain to give you if you are not US based.

I have long been a proponent of LLC’s for most startups. See for example Why the LLC is the Ruby on Rails of legal entities. However there are times that S-Corporations may be better. I have an S-Corp for personal stuff such as consulting etc and LLC for my actual startup.

Remember here that you should separate your personal tax planning from your startup’s tax planning if you are multiple partners.

Lonnie asked me in a comment to the above article:

I have read lots and lots of material and still can’t decide what to do. If I am not looking for VC then should I go LLC ? What about taxes? I have read that the SCorp offers more savings. Thanks for your help.

About me

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My name is Pelle Braendgaard. Pronounce it like Pelé the footballer (no relation). CEO of Notabene where we are building FATF Crypto Travel Rule compliance software.

Most new articles by me are posted on our blog about Crypto markets, regulation and compliance

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