
I recently had the pleasure of spending some time with James McCutcheon of N squared Solutions. James is a software veteran and successful serial entrepreneur so I was very grateful for the opportunity to sit down and gain some insight from him. N squared is his latest venture, an Australian based software company working on bleeding edge technology.
Despite its short existence (founded in June 2008 by three prominent figures in the software industry James, Dr Neil Roodyn and Nick Randolph) the company is growing rapidly and the guys already count Microsoft as one of their clients…
Disclaimer:
On that note I must warn you, I would like to consider myself technology agnostic but admittedly I am from a Microsoft background and therefore a bit of a ‘PC guy’ (although I don’t wear pleated khakis or tap toe Oxford shoes just yet) and as such a lot of our conversation was Microsoft-centric so I must apologise to the non techie readers and non MS folks for some of the jargon, but in the interest of Australian technology news, I thought it was relevant and chose to keep it in.
We covered a lot of topics and started off our conversation by discussing the history of N Squared and some of the problems they had experienced in gaining momentum including the problem of attracting the right talent in Australia.
I thought we would pick up the conversation from there….
On your point of attracting talent, what are your views on talent pool in Australia; it’s a relatively small market do you think that’s part of the problem?
Well I’m Australian so I am biased but I think Australia has a very good talent pool. I think Australians are well known for their ability to what we have called here – “suck up princess”: they just get on with the job. They may not have the best tools for the job but somehow they manage to wire things together and make things work and get the job done. There’s that can do attitude that Australia has and I think that’s what makes good developers as well.
Yes you’re 100% right, Australia’s talent pool is very small and you can pinpoint the key people very easily and there is also great competition for those people from different companies; the big end of town the ‘Googles’ and Microsoft have been tracking these people, not necessarily into Microsoft Australia but in to Redmond. It’s funny, we have good relations with Microsoft and the Redmond campus and we are getting quite a few enquiries from Australian guys over there that want to come home and are looking for ways to spend some time back in Australia. We also have a bit of a campaign to attract overseas talent to Australia, we have a couple of employees in the U.S and they are quite interested in how they can work here in the sun and the surf, probably much like yourself I suppose.
Do you think the Australian government could do more to help in terms of developing talent in the areas of technology and innovation?
Oh 100%, it is one of my frustrations. When you look at Australia what was our strength in the past and is our weakness today is where in the hell we are, we are far away from everywhere. If we have coal or we have sheep, we have to stick it on a boat and ship it somewhere, that’s expensive but with I.T you just ship it down a wire. If you’ve got a good pipe running out your country the idea of being able to distribute software means there is no distance and I don’t understand why the Australian government doesn’t identify that as a great potential.
And do you think that applies to start ups in general?
There’s no R & D tax grant, concessions are very minor now – in the 70s there were some great R & D tax incentives but that seems to have totally disappeared now and in fact even now under the current government they cut off NICTA and all that sort of stuff and you sort of think, where is the next level of investment coming from in those type of projects? I think you have to be careful you don’t waste money either, you don’t want to throw money around but it is frustrating and I can’t understand why there are not more tax incentives around R & D.
Absolutely, and with the resources boom slowing you would think that things like software and the whole information technology industry going forward is going to be a major driver for this economy.
Countries like Israel have done a great job of building that pool and leveraging that and they are now reaping the rewards of that investment. If you look at any of the big companies like Google or even Microsoft in its early days they all started with ‘oily rag’ situations and were very cheap to start and they created these multi million dollar companies employing lots of people and yet Australia doesn’t have those and you have to ask yourself why not? Is it because we are not that smart or not well educated, the answer is no we have a great education portfolio here. The universities could do a lot more to develop the talent pool but all that is just lost in the wind because the R & D is not there any more. In the past with other start ups I’ve done, I have found it easier to attract money out of the Singapore government than I have out of the Australian government, and that’s just ridiculous.
We tend to cover a lot of web based start ups on TechNation, what are your views on some of these web ventures that are out there with no tangible revenue model?
That’s one of the great things about I.T.; that is a guy with a great passion and a dream can go sit in his backyard with a couple of his mates and something can be created out of that. A lot fail, more fail than succeed and I do see that there is a lot of strange investment models that people are going into, a perfect example is something like Twitter, a great service and a great tool but where’s the revenue? Even things like ‘YouTube’, still today they are scratching their heads on how we make money from this thing? I’d hate to be paying the broadband bill on that one.
So do you think we are going to see a bit of a sanitising of the whole ‘web 2.0 freebie’ type market over the next few years?
I think so with the way the market the way is. Investment dollars are drying up and these guys are going to find it hard to attract people with ‘see what happens’ type of money. I always take the stance that there is no harm in having a dream or a desire to start a business up, obviously N Squared is a business that is more reliant on physical bodies and consulting but we have developed products along those lines as well, but again it has to come down to revenue. We are obviously very highly tied with Microsoft and there seems to be some great models around for us to leverage, things like BizSpark.
You have some spent time in the trenches with start ups in the past, any success / failure stories you would like to share?
Lots of stories to share but I have always found that its best to not pre judge concepts and ideas with your personal beliefs, instead make sure you have a rigid set of criteria to judge how an investment is going and don’t let your ego make you stick to a concept that you should have given up on. So never be scared to start something, just be scared to over commit to a bad concept.
One bit of advice you would give to anyone hoping to start a venture?
The one bit of advice would be, to work hard but always enjoy yourself … enjoying yourself makes everything easier.
As far as Microsoft is concerned personally I think there is lots of cool stuff coming from them at the moment, Mesh, Azure as well as muti touch on Windows 7 & Surface . I think this represents a big opportunity for developers and start ups here in Australia involved in that kind of MS eco system. Would you agree?
Oh 100% agree. I’ve always sort of attached my wagon to the Microsoft bandwagon I suppose and I have done that for many, many years. I have developed past websites in things like PHP and they are great technology sets, so when we talk about the Microsoft model I don’t mean the technology, I mean around the actual business model. In the Open Source community you can build something really great on it, but who helps you take it to the next step? There are probably a few blogs you can post on and that is really about it; you are left to your own devices. Microsoft are only too happy to help you, introduce you and get you into a channel, if you are selling their products then they are happy to help you sell your products and that seems to be a great marketing engine. I think the future is very bright for Microsoft around technology sets, like you say, like Mesh and around Azure which is a very innovative and exciting space. I think any new business, such as N squared is, can see the great potential and I think there are some amazing opportunities. 7 as you say is an interesting space, we have multi touch running here and are the only site in Australia that has multi-touch.
..and do you have a surface here, or are you just using the SDK ?.
We have ordered one and are waiting for clearance to bring one to Australia. At the moment Microsoft is being very rigid about how they get out of the country [U.S]. There are also some rules about how you go about trying to bring one into this country as well, so we have to follow those to be able to sell it. You know, at the end of the day, we want to be able to resell it and that’s what we are aiming for.
Do you see much of market? The unit itself is pretty hefty.
Yeah it is, it’s like one of the old PacMan tables,….ha ha misspent youth.
…if you compare it to something like the HP Touch Smart which is similar multi touch type of technology I think, is it?
Erm yes it is, but Surface is more than just multi touch that is something you have to understand with it as well, it has the ability to do object recognition, it can identify things. It can also have multiuser multi touch which is far more advanced that what the HP duel touch and touch smart actually allows you to do. The actual form factor of the device is probably going to have to make some changes in the future and I think Microsoft is aware of that. It’s very innovative and there’s no interface like it in the world and that to us is a very exciting development situation.
I know the mobile space is something close to your heart…
It is, it is. Absolutely.
Microsoft are perhaps not very well known for their ‘innovation’ in that space, although Steve Ballmer did hint somewhat at the Liberation day about potential new products. Do you have any comments on that?
I think Microsoft have focused on the enterprise space in the past and have never really focused on the consumer. In the past , their aim was at the driver, the proof of delivery guy, and they started moving into the messaging world with exchange and to take on the RIM products [Blackberry] and so forth and they have done an extremely good job at that. The consumer device has not been their strength and I think it is something that they are now starting to realise, that there is a lot of growth and potential. I think Silverlight is going to the first real play now into that very high, rich user experience. Silverlight2 is coming closer now on the mobile device; we’ve been doing dev on that now for about 6 months. When that gets out in the real world I think it is really going to revolutionise user interfaces and what you are going to be able to do and use on the devices.
And they will all be mesh enabled as well…
Definitely. They will be mesh enabled and you will be able to share and move content between devices seamlessly. It’s funny that things like the iphone have done very well in allowing you to extend your phone by customising it with applications you like to use and people really like that. The problem is Microsoft has been doing it for about 4 years but just nobody knows how to do it. In the past, the model Microsoft has been using is to use Telcos as that channel and it just hasn’t worked. Most people who own a windows mobile device are not logging on to a Telcos individual portal to download apps, people just don’t do it and the whole I –store [I-tunes] type model seems to be working very well.
…and so do you think Microsoft will make their own play? We’ve heard the rumors of SkyMarket and so on.
There is no doubt. Obviously SkyMarket is more rumour than anything at the moment, and who knows what they are going to be doing, and obviously there are NDA’s and various things that stop me from saying things but they will definitely have a play at this space. They’ve got the developer community. There are far more .Net developers out there than on any other platform. All they need to do is give them that channel and I think that will open up a lot of opportunities.
So there you go, we did meander a bit and deviate from ‘start ups’ to MS technology and while I can’t claim a scoop it is the best confirmation yet .… sit tight .Net developers, your own app market is coming! And with Silverlight2 for the mobile on its way, all we need now is for Apple to enable browser plug-ins from 3rd party vendors.
Thanks again to James for taking the time out and we wish the team at N Squared every success with their latest venture. So Australia doesn’t have a Google or a Microsoft just yet but it’s certainly not short on great software companies or talent for that matter, surely it’s only a matter of time.