Netflix said I would love In a World and I loved In a World. But IMDB gives it a low rating. This says something about Netflix’s success as a recommendation engine. I don’t care what others think about a movie. I want to know if I will like a movie or not. And Netflix nails it for me. I wish there was something like Netflix for restaurants. Like my palate is so different from the average Trip Advisor restaurant reviewer that I find the app useless. Indeed my palate is quite different from that of many of my friends also, and so are other tastes like music. I think friends are an indication of what you may like, but not always and recommendation engines that are purely friend base fail for that. I find it interesting and useful that Netflix does not rely on my friends to give me recommendations. Non personalized recommendations work for people with average taste, they work when there is a lot of conformity. But if you differ from the mean you need a personalized recommendation engine. And that is Netflix for me, now what Netflix does for movies and TV series I want for:
People I can work with
Mountain bike rides
Neighborhoods in a new city
Online Youtube/Vimeo type videos
After years of organizing the Menorca TechTalk I am interested in organizing the Co Working Menorca TechHub. If you don’t know what co working spaces are read this article about them and you will get a good picture. The idea is simple: to make deals with all the TechHub type work spaces around the world, places like General Assembly of NYC, or TechHub in London and its many counterparts in cities around Europe and the world, and to offer exchange programs so developers can work for weeks or months in an extremely relaxed/different environment that can allow them to focus on their work. It is the concept of work and vacation but applied to start ups where people are never really on vacation but can like the possibility of leaving say the London winter and spend 6 months working out of Menorca to see finish that beta version.
Menorca is a beautiful island, a perfect work environment off season for Northern Europeans and Americans, with direct flights to London and other European cities and connecting flights via Madrid, Palma, Barcelona and London to anywhere around the world. Start ups operating out of co working spaces around Europe can work in Menorca for a few months or as long as they need and have their seed money last longer. Have a longer runway. Desks in Menorca TechHub will go initially for €150 euros a month, electricity and internet included, and accommodation can be found in Menorca for as little as €650 euros a month including health insurance which is free in Spain, room, board (food) and monthly mobile service. So an engineer can live in a great environment, leading a simple life focused on work and recreation, riding her or his bike for less than €900 euros a month. This is unimaginable in the North of Europe, especially if you give a price to hours of sunlight 🙂
After trying unsuccessfully with the government of the Island to promote this initiative I am now seeing if this project can take off as a private initiative, whether it be profit or not for profit.
So the first thing I need is 500m2 to get this project going. Possibly with expansion space available. Possibly already furnished and ready to go from offices that some company has vacated. Could be anywhere in the island. Has to be reasonably priced. I can also offer the owner of this space a revenue share. Please write to claire(at)fon.com with ideas. Let’s see if the private version of TechHub can get going!
First, an anecdote.
When I moved from the United States to Spain and created Jazztel in 1998, I opted to offer health insurance to my employees—a very North American concept. I asked them if they would prefer that Jazztel pay for a private health insurance plan, or instead, that I give them that money directly. It wasn’t substantial, something like 60 euros (75 dollars) a month. It surprised me to learn that hardly anyone chose the private health insurance plan, that few were interested in private health care, that they were remarkably content with the public health system and that they preferred to earn 60 euros more a month.
Later, I was given the chance to check out the Spanish public health care system for myself, partly due to my mountain biking injuries and also because of my children’s various accidents. I saw firsthand that it was really very good and very free. Especially coming from the US where health care costs some 600 euros (750 dollars) per month and, you have to pay for additional things that are included as insured here in Spain.
Now, let’s “fast forward” to 2012.
We have a bankrupt Spain being bailed out by the EU day-to-day. A bankrupt health care system and with massive defaults, but still with good quality medicine and full of new hospitals freshly equipped with the latest “bubble” models from when we still had credit. All this accompanied by a great debate over the topic of copays and the plan to charge 710 euros (890 dollars) a year to illegal immigrants. Seeing the situation and being an entrepreneur, it occurred to me to make a business out of this tragedy.
Or let’s just say: make the tragedy less tragic by constructing a business to help it.
Spain is the fourth largest tourist destination in the world. We receive almost 60 million tourists per year and almost all of them come from countries where medicine is more expensive. Why don’t we sell our medical services—that are so good and so cheap—to our tourists? Why don’t we launch medical tourism to a larger scale? Why don’t we transform public health care into an export-oriented industry?
How do you do this? The government could launch a big publicity campaign in which they offer medical insurance to foreigners and allow them access to public health care for 100 euros per month. And for those foreigners who travel here without an insurance plan, they would be charged 40 euros (50 dollars) each time they wanted medical attention and not be seen for free as they are now. North American friends that had health problems in Menorca, for example, couldn’t believe it when after receiving medical treatment, were released without being charged. They were willing to pay 100 euros for a consultation; 40 euros would seem like a bargain. Foreigners don’t expect it, but they receive free medical treatment in Spain.
From here we can start to promote medical tourism. Come get yourself treated with the Spanish national health system! We are the longest-living of all big countries in the world!
If the government ensured that one million of the 60 million tourists pay this medical tourism insurance, it could obtain 1.2 billion euros (1.5 billion dollars) a year. To North Americans, being able to come to Spain and while here, go to the doctor for free, all for an insurance premium of 1,200 euros annually, would be very beneficial. The Germans pay 300 euros a month for insurance. And we won’t even speak of the uninsured people in many countries who have money but not enough to afford insurance in their country. In Argentina, for example, insurance that provides the same quality of service as Spanish health care costs about 300 euros per month. I know that getting a million customers isn’t easy, but the market has 60 million. Later we will have to determine the costs of treating these patients, but I find it possible to make a profit. Especially when there is so much infrastructure already in place.
I think the Spanish government has a possibility to finance a part of the health of its people with medical tourism, and that this opportunity should at least be studied. I know many Spanish people think that health care should be free for everyone, but it isn’t—we pay for it ourselves and we can find more customers overseas. It’s time to be creative and sell medical insurance to foreigners with the Spanish national health system.
Fon called for an art competition to build our wifi gadget library called the Fonoteca. The idea is that all Fon employees will be able to check out and test all sorts of WiFi gadgets, smartphones, ipads, tablets, laptops, gaming devices, book readers, etc. The Fonoteca will be at the entrances of the new offices. We offered 10K euros for the executed work. Please tell me if you have any favorites.
Is there a Moore law of memory? Because if there isn’t there should be one. It should read like this: every 18 months you can buy twice the memory for the same price. And this Moore law of memory is finally working in my favor. As opposed to Moore law itself which seems to be a wash because whenever you get faster chips you get bigger programs, with storage memory I am now unable to produce content at the speed hard drives are falling in price. All my photography and videos taken throughout my life amount to around 3TB. Now that I take RAW photography and HD videos I consume around 100GB per month of memory. But I saw that now they make 6GB external HD for around $400. I am about to get one of those, I can put everything I ever photographed or filmed and still have enough room for a couple of years. It feels nice to be ahead.
In any case advice on what HD to get is appreciated.
One of the lesser known facts about democracies is that they tend to skew income against children. In USA for example children are the poorest people in society, children are 26% of the population but 39% of the poor. And this is true of all democracies. This has one simple explanation and that is that children can’t vote. If they could they would certainly vote for what societies seem to lack and that is better care for children. In Europe for example in most countries, kindergarden is incredibly expensive but universities are mostly free. No surprise there as university students can vote and kindergarden students can’t. So I propose a simple solution to this and that is to give one additional vote to parents on behalf of their children. Not a one vote per child as that may lead families with a lot of children to have too much influence in the electoral process but each family with children, one or many, should get one extra vote when election comes. This vote should be exercised by the parents using their best judgement on behalf of their kids. It is my view that if parents got a custodian vote for their children democracy’s outcome would not be so skewed against the young.
The Bikera is my idea for a better bicycle sharing scheme than those that exist nowadays in many cities. It is inspired on Fon the company I founded and run and now the largest WiFi network in the world. A WiFi network offered by the people.
Here’s the plan:
You start in a town that has a bicycle culture and a low crime rate. You “seed” the town with $100 bicycles. These bicycles, as opposed to all the other bike sharing schemes, have no electronics and no stations, they stand on their own. They are called bikeras. The electronics on the bikeras will come from people’s smartphones which in a year will be as all phones are now. Bikera will also be an app.
You seed the town with one bicycle per every 200 inhabitants. When you start you do a blog/FB/twitter PR campaign. Seeding means that on day one you leave all bikes standing for anyone to take. One per block. More where you expect more people. A town of 100,000 people would have 5000 bicycles and cost half a million to get started. 5000 bicycles is a LOT of bicycles, they would be seen everywhere.
You get a corporate sponsor and brand the bikes with this corporation’s colors and logos to help cover the start up costs. Barclays did this in London for example.
All bikes come with a simple combination lock and an engraved license plate or number. All the electronics for the bikera scheme are in smartphones that people take with them. Not on the bike. THIS IS CRUCIAL and very different to all bicycle sharing schemes.
Two kinds of people use the system: bikeros or aliens. Bikeros are the ones who have contributed $100 to the system and bought a bike to add to the system. Aliens are anyone else. Aliens pay $2 per bike ride. Bikeros ride for free. The incentive to contribute a bike are to be nice but also to save $2 per ride.
In order to ride a bikera you need to open your app in your smartphone and this app will GPS your location to the bikera system. You wil then enter the engraved number you see on the bike and immediately receive a combination back. Then you will leave your app on as you move around with the bikera. The app will track your movements like say Endomondo does when you work out, or Runkeeper. When you are done you will leave the bike, sign off and the system will know where the bike is. Everyone else who opens the app will find it.
Why is this system better than Velolib in Paris or Deusche Bahn in Germany?
-rides are free for as long as you want, not for half an hour and then pay a fortune.
-you don’t need to find a parking spot for your bike which is the biggest inconvenience for Velolib that forces you to ride from station to station.
-bikes are much cheaper, they don’t have electronics as the Deuscthe Bahn system for example and don’t have costly stations with electronics as in Velolib.
-bikes are so cheap that people will not steal them, what for, there is always another one, still there are now bikes in the market for $100. Bikera could find suppliers of decent bikes for that amount.
-you can pay students to repair bikes when reported broken by users. They can find them with the same iPhone, Android, Symbian, Windows, Blackberry app.
-you don’t need a license to start a system like this, or if you do it should be very simple.
-because people buy the bikes you don’t need much capital.
-because towns can self organize and start their own systems, it is self franchising.
-the bikera company’s only income would be the $2 per bike ride from the Aliens or non Bikera contributors.
So far this is just an idea. Indeed it is a dream that I had last night complemented with some dosage of reality added a few minutes as I woke up. So the whole concept is very fresh on this Sunday morning. I call it the Fon bikes and I call the Fon bicycles the Bikera (rhymes with Fonera). This is inspired on Fon, the company I started in which people share WiFi at home buying a router called the Fonera and roam the world for free and at close to 3 million hotspots it is by far the larges WiFi network in the world.
The Fon Bikes would be a project to implement in small cities first. Say the city of Lerida in Spain, or Geneva in Switzerland or the smaller cities of Japan which is Fon’s fastest growing country with over 100K new foneros getting Fon WiFi routers called Foneras every month. In another way Fon Bikes is a project similar to Velolib in Paris but simpler and better.
The idea is that Fon would go to one of those towns and buy 1000 bicycles. The bikes would be orange, the color of Fon, each one would have a unique identifier engraved in it and a simple lock mechanism that operates with a SIM card. Something like this bike that sells for only 99 pounds or this one which sells for the equivalent of 45 euros. So say for only €50,000 you could place 1000 bright orange bikes around a town. The unknown at this point is the SIM enabled lock. Let’s assume that we get it for €20. So for another €20,000 we get say Geneva to have 1000 bikes with those locks. 1000 BIKERAS 🙂
And then the fun starts. You tell everyone that they can use those bikes by making a payment with their smartphones of say 1 euro a ride, or they can buy a bike themselves for 70 euros and never pay again, all bikes are for free to those who donate a bike. Moreover you tell them as we tell in Fon that if they do buy a bike for 70 euros that they can amortize it with the first 70 rentals as Fon will give them the euro it collects per rental and that after that Fon keeps half of the rental fee for building the network and system, and the person another half. This means that you can enter the Fon Bike network, never pay again and make money with your bikera for only an initial €70 investment.
Now an obvious question is why would not just people pay €70 euros and get a bike for themselves and never be part of the system. Many answers come to mind. One is that by mass buying one model we can give people use of a better bike for less. Onother one is that many times it is inconvenient to own a bike. When you own a bike you cannot do one way trips. If you go to work during the day you have to return at night in your bike. If it starts raining you can’t switch to public transportation. This system is an ideal solution for one way trips, and then there’s the speed at which you dispose of the bike anywhere. In the Velolib system in Paris one of the biggest problems is to find one of those bike stations and if you don’t find one quickly they start charging you a lot of money for having the bike. Here there is no disposal of the bike problem. Lastly it is much better to be able to leave the bike in the street all the time. Many bike owners have to make room in small apartments for their bikes, carry them up the stairs, etc.
Anyway, as I said I just woke up. Dreamt this idea which is not a great start. And questions come to mind, like who will service the bikes or what if people just vandalize them or steal them. But even if they steal them they would have to dispose of them somewhere, and then somebody else would “steal” them without knowing. Because they would be public property in a way.
So instead of Fon’s “share a little wifi at home and roam the world for free” it would be “share your bike and any bike will be yours when you need it”. I know these projects sound like anarchist cooperativism of the 1920s but what makes them less utopic is that Fon is the largest WiFi network in the world. That Fon grows a T Mobile every month in terms of WiFi. It makes you think if there other ways to make people fitter, healthier, alleviate pollution and reduce private cars in circulation.
Added a bit later: two commentators have argued that if we have SIMs, we have a lock, we need electricity, why not also power a 3G to Wifi converter, charge it with a dinamo as we pedal and those bikes are also Foneras. Love this brainstormings!
Another commentator added that these bikes are also ad space, if they became say the Starbucks Bikes or something like that Starbucks may want to invest the initial money to get a city going.
And another idea that occured to me is that the homeless or unemployed could be trained on simple bike repairs and compensated for oiling the bikes, adjusting brakes, etc. Probably they would not have gears.
Now I have to see who can make a SIM based locked managed with Smartphones or a SIM based lock Fonera 3G to WiFi.
I should add that I am a cycling fanatic ever since I was a bike messenger when studying at NYU. And that right now…I am going biking in the Sierra outside of Madrid.
Ok, back from cycling I see somebody points a similar idea from a start up called SoBi. I lived in NYC for 18 years and think NYC is the wrong town for something like this. Also $500 per bike is totally out of budget. I am thinking more like $50 bikes that nobody will want to steal because there will be so many of them that it will be worthless to steal them. I am thinking very simple SIM based locks that could cost $20 that nobody would want to steal either. But most of all I am thinking of places where people are educated and honest without being policed. Places like Japan, Scandinavia, Germany, Holland, Denmark. Interestingly in India, the country with the most poor people in the world vandalism is rare. Vandalism is not about poverty, is about culture. The guys at SoBi, who look like a great group btw, have to spend $500 so people don’t steal a $50 bike. I don’t want the bikeras to be locked. I want there to be so many of them in a town that they just don’t have scarcity value.
In general I don’t see this system as a good one for USA. People are too far apart from each other to cycle, NYC is an exception not a rule. I also don’t see it for my native Argentina because of a general lack of civic culture, and not for my Spain where I live either except maybe in smaller cities like Zaragoza for the same reasons.
I like the idea of the commentator who says that bikes can save themselves all the electronics, that it’s the users who have the electronics. So if the bike simply has a lock with a combination and it has a unique identifier the person emails/sms bike identifier and gets combination. The locks can be changed around occasionally.
At Fon, we are currently designing the retail box of the new Fonera SIMPL. We already sold over 1 million of these wifi routers wholesale to mobile operators. We will soon go retail with this product in Europe and the USA.
Now what we would like to do is to illustrate one side of the box with a comic strip that explains what Fon is in something like 6 squares and in English. We are offering a €300 appreciation prize to the fonero who draws the comic strip that makes it to the box.
So what is Fon? It’s in our web site. Some say, “you share a little WiFi at home and you roam the world for free”. Basically, a Fonera SIMPL is an 802.11n router (connects faster and farther than wireless g) that allows users to connect to WiFi themselves via an encrypted and secure SSID (WiFi signal), but that also has the unique capability to create a second FON SSID that allows people who live nearby or pass by your home to connect to your router and use a small portion of your bandwidth. In exchange for opening a second SSID, you get two major benefits, one is free global WiFi roaming at well over a million hotspots around the world, and the second is that you can make money selling WiFi passes in the Fon network to those who do not have a Fonera (fon router), and therefore do not share their home WiFi, and so have to pay to connect when they find your signal. You keep half of the money and Fon keeps half. Notice that you are selling access to the whole network not just to your router. Another benefit of the Fonera SIMPL is that it auto-connects to iPhone and Android smartphones.
Ideas? Somebody suggested a comic strip telling the story of a lonely WiFi user who had no friends with his conventional WiFi router until he got a Fonera router and then had lots of friends and traveled the world connecting for free. Somebody else added that now he has money and travels the world (clearly a joke as very few make the kind of money you would need for a trip, though many do make enough to subsidize the cost of their broadband). We are open to any ideas that describe the benefits of Fon in a comic strip. Please send your proposals to email@example.com.
update: we already have one that we are likely to use.
In this blog I have criticized Europe’s way of doing business on different occasions. But as I continue to build Fon in Spain and reject the possibility of moving the company to USA, I feel I owe an explanation as to why we are staying put.
But first let me go over the obvious reasons why Fon, a tech company, should be in Silicon Valley. Silicon Valley is the epicenter of the global buzz machine and since Fon has become the largest WiFi network in the world based on word of mouth, it would much easier to create positive buzz from there. Indeed the few times that I manage to deal with the 9 hour jet lag and go to Silicon Valley for a few days, we end up getting great coverage for Fon. As sad as it is, Europeans and the whole world mostly buy what Silicon Valley blogs tell them to buy. And US bloggers and journalists have a great nationalist bias that many times is not so obvious to them. The second reason to be in the Bay Area is that so many brilliant minds are there. While everyone competes with each other, there is also tremendous collaboration, and Fon is left out of this creative flow.
But aware of these positive factors, I have estimated them against the costs of moving to USA and have decided against the move as there are three huge negatives of doing business in the USA. They relate to the three unreasonable burdens faced by the American entrepreneur: legal costs, medical costs and yes, military costs. Allow me to explain.
Calvin Coolidge said in the 20s that “the business of America is business”. After having done business in the USA for 20 years I would say, the business of America is business…provided that lawyers say so. And even if they say so, it is an unstable and incredibly expensive legal environment to do business in. I have built start ups in USA and in Europe and have enough data to make the comparison. In the life of a start up, legal bills in Continental Europe are, I estimate, 75% lower than in the USA. In Continental Europe, legal systems are based on written codes derived from Napoleonic times that are very clear on what is legal and what is not. When I do business in the States I have to pay lawyers over $600 per hour to spend endless hours and never give me a clear answer. I don’t blame them. Case law is just very expensive to study and its outcome is uncertain. In Europe the same lawyer may cost us $200 an hour and spend a maximum of say 3 hours to give us a yes or no. As a result my legal bills at Viatel for example were around $600K per year and the legal bills of Fon are around $90K per year. And not only are business lawyers cheaper. A typical tax filing, lawsuit of any kind in Spain may cost a pittance compared to what it would cost in USA. When I lived and managed companies in USA, I always felt that I had a legal Damocles sword hanging over my head. Here when people pour hot coffee on themselves they don’t sue the McDonalds. They just say “mierda”.
But not only is the legal system in USA a terrible burden on business. There’s another enormous “tax” on US business and that is health care. In Spain, for example, Fon’s employees go to state hospitals and get treated for free. Fon has no medical costs as a company. As this report shows, in the USA the average cost to a company per employee is close to $10K per year. In Spain, an engineer fresh out of university may cost $40K all inclusive to the company. If we had to pay another $10K of medical expenses that would mean that 20% of our costs would be to provide medical care for this new hire. So in Spain, and many other places in Europe, not only are total employee costs lower than in Silicon Valley for a very well educated population (not lower than in Texas for example but lower than Silicon Valley), but we don’t have to pay medical expenses.
And lastly, there is another burden to the American entrepreneur that is hard to quantify, but it is there. And that is the fact that USA spends close to half of what the whole world spends on the military. What does this mean to the average entrepreneur in Europe? In simple terms that we don’t pay a “defense tax” every time we do business. In the USA, military spending is 21% of the budget and an estimated additional 8% in other parts of the budget that are affected by the military with a big part being taking care of veterans. In Germany, Spain, Netherlands the military account for less than 7% of the budget. And who supports these huge efforts? For an entrepreneur, it is a real cost of doing business. Less services more costs for the company. The best example is education. Education in general and university education and training in Europe is mostly free. Education and training in the USA is occasionally free but frequently extremely expensive. In the end, the entrepreneur in the USA has to pay salaries that allow his/her employees to educate their children. Moreover expensive education spills over in other areas of society. Europe has an incarceration rate of less than 100, USA has an incarceration rate of 750 people per 100K inhabitants. In my view there is an inverse correlation between spending on education and incarceration that favors Europe. If all US prisoners were moved to a city they would overflow Madrid. Maybe spending less on the military and more on free education would have a more beneficial effect on society. Another example is public transportation. Most employees at Fon come to work in public transportation which is lacking in many American cities. Not having a car means great savings. Also, Europeans who have cars pay much less in car insurance because the legal system in Europe, while giving awards in case of accidents, does not find it fair to distinguish between your leg and that of Leo Messi. As a result, European employees make less after tax income but have less expenditures because our government here spends much less on the military and have almost 18% of their budgets more to spend in social services.
Should it surprise us then that European GDP is 30% greater than US GDP , $18 trillion Europe compared to $14 trillion USA? Why is it that this continent that Americans consider so 20th century, is holding its own without a common language and with many barriers to business that don’t exist in USA? Or why is it that entrepreneurs like my friend Loic LeMeur moved to Silicon Valley only to hire and fire people in USA and ending up being a Silicon Valley company with European employees? In my view it’s these three factors, legal costs, medical costs and military costs. These three abnormal burdens to the daily life of the American entrepreneur, explain a great deal of the European advantage. It is not that we are better. It is America’s self inflicted damage that sinks its currency and helps us in relative terms. Until the Obama administration addresses these three burdens and effectively lowers health care costs, establishes a system of limits on legal awards and spends less in the military, the USA, in spite of its unparalleled ability to innovate, will continue to struggle.