(1) Payne berates all “the chest-beating sound bites fed to hungry reporters” (what Eric Ries, bless ‘im, calls “success theatre”), and thinks that nobody in startups has any real idea what they are doing: “we mistake dumb luck for a machine that produces success”.

(2) He thinks VCs try to justify their herd behaviour by somewhat laughably calling their decision-making process ”pattern matching” when it’s nothing of the kind (well, to a computer scientist, anyway).

(3) He thinks startups who believe tech clusters cause success (a foolishness even the UK government has promoted to the level of national policy in the last 12 months) have got it Just Plain Wrong.

(4) He thinks that Eric Ries’s Lean Startup, Steve Blank’s Customer Development, and even 37signals’ methodology are “process cults”, more useful for finding like-minded co-founders than for building proper businesses.

(5) He concludes by dismissing Facebook’s “hacker way” as a soon-to-be-discredited heir to such business cults as Taylorism & Japanese management theory, and thinks that the only probable business essentials are “a good idea, great people, the willingness to work hard, and an absolute shit-ton of luck.”

Nick’s thoughts:

–> (1) As generally practised, startup success theatre is deeply insincere: this promotes unsustainable relationships not just between between entrepreneurs and the press, but also between entrepreneurs and investors. Here in the UK, business angels routinely (and openly) divide projections given to them by entrepreneurs by three or more, numerically encouraging entrepreneurs to give them ever more inflated figures to compensate for this systematic pessimism. Similarly, somewhere along the line angels now routinely expect to see slideware pitches telling them of their likely 10x or 20x return, as if every single startup they’ll see is going to be that 1-in-a-1000 outlier!

Yet if as an entrepreneur you try to break this cycle, you can quickly find yourself accused of lacking ambition or - worse still! - of pitching a niche business. Though I have always tried to be utterly honest about my own startup’s situation, assets, and potential, I can’t help but wonder whether I’m missing the Painfully Big Inference: that lying slideware has become so endemic to the startup ecology that honesty in pitching actually moves you backwards.

–> (2) (As a UK entrepreneur, I have no real opinion on VCs. You might as well ask me what I think about Peruvian microbiologists – they have just about as much to do with early stage startup investment as Euro VCs do.)

–> (3) In my opinion, tech clusters are more likely to be the sign of a tech neighbourhood dying off than of being born (i.e. it’s a trailing indicator rather than a leading indicator), and in particular of rents rising to a level that non-vanity startups can’t afford: so I agree with Alex Payne. It all seems far more likely to me to be a logical fallacy: that success leads to tech clusters than tech clusters lead to success.

–> (4) Don’t get me started on process cults (particularly the whole Lean Startup thing) - tiny techy tails trying to wag big complex dogs, driven by people brandishing back-to-front telescopes all claiming to have invented a new way of seeing the business world. Yup, Alex pretty much nailed this one too.

–> (5) Here’s where I diverge slightly (but not actually too much). I personally think luck is something entrepreneurs contrive to make – or, more precisely, that a startup is best seen as an arena carefully laid out to enable lucky things to happen within. Entrepreneurs who try to define success in terms of their monolithic Business Plan are Big Fat Fakes, because life never, ever works that way: rather, the best business plans are ones that have wide-open holes large enough for Fate to enter through.

Hence, I think the only real question to answer when assessing a business proposal is: does this leave plenty of space for luck to happen, or is it determinedly driving into a wall it will never be able to break through? Of course, no angel would ever openly agree that this is right because their thinking is still so hugely dominated by the Oh-So-Foolish Cult of the Business Plan. But perhaps they might get better results from their portfolios if they did…

This is what I’m aiming to avoid

Unsurprisingly, the reason I’ve been rejigging my pitch deck of late is that this evening (17th January 2012) sees my first business presentation for a fair few months. It’ll be at the 3Cs community, by all accounts a nicely eclectic London-based group of entrepreneurs, techies and investors – it encourages its members to “Pay It Forward” by helping other people out, rather than merely being snarky and pouncing on opportunities etc.

Just so you know, I’m reliably informed that the “Connections – Commitment – Capital” tagline that appears on its website is actually a [much later] backronym - the name “3Cs” originally came about because it was set up by three guys called Colin.

I was very kindly introduced to the 3Cs by Mike Scase (who I met via Rosco Paterson, Redhill’s one-man network hub) and Alan Ferdman (who I met through KRTI): I’m therefore honour-bound to fill them with copious amounts of beer in the pub afterwards. If you find yourself near the Rack and Tenter from about 8.30pm (it’s super-close to Moorgate BR & Underground stations), feel free to say hi.

One of the biggest challenges when pitching startups-that-actually-make-physical-things (as opposed to pretty much any of the social media / digital services startups Old Street is currently awash in) is that perilously few angels have any experience of making money out of making things. To be precise, the large majority of the Home Counties angel investors you’ll ever get to meet will have made (and, in fact, will usually still be making) their money from relatively ‘pure’ financial service plays: by and large, most seem to treat angel investing as an extension of that financial services mindset. Hence most are basically on the prowl for scalable service model startups with relatively lightweight capital funding requirements.

Another issue is that there is a widespread perception of manufacturing as a stagnating, overoptimized segment - as if by merely saying the M-word you are necessarily invoking the slothful ghost of British Leyland and its awful ilk. In reality, few people (even those in government who like to espouse manufacturing as the way that UK plc will turn its fortunes around) realize that the nature and practices of manufacturing have dramatically changed over the last ten years: and one of the key reasons for this lies in what I call the secret history of commodities.

My secret weapon to help me make this visible is a 20-year graph of commodity indices from May 1992 to May 2011 collated by the International Monetary Fund’s economists, corrected to notional 2005 dollar values (hence all the curves cross at index=100 in 2005).

For me, this tells the secret recent history of both commodities and manufacturing. For a start, it’s notable that the dotcom bubble leaves not a butterfly-flutter of a trace on the graph circa 2000: there was essentially no overlap between the physical and Internet business worlds back then. I’ve also divided the chart into three sections to make it absolutely clear how I read it:-

1. 1992-2001 – the “steady-state optimizing” phase. Supply (and improvements in supply) generally outstripped demand for most commodities. Margins were tight. Some supply chains were tightening up thanks to an influx of MBAs, whose fat consultancy fees were paid for by savings from the JIT (just in time) regimes they designed and put in place.
2. 2001-2005 - the “uh-oh” phase. Something not really seen during the 2oth century happened: demand for a whole set of commodities started to accelerate faster than supply. Manufacturers responded by outsourcing (particularly to the Far East), extending their JIT arrangements, and integrating yet further with distribution and customers. Fragility of the system started to ramp up.
3. 2006-present – the “OMG” phase. Just look at the relative volatility! Demand continued to accelerate faster than supply, but – far more importantly – almost all commodities started to be actively traded by speculators looking for the next gold bubble. What’s more, widespread trading in commodities derivatives and futures magnified and amplified any micro-trend until it became a macro-trend. This has led to a succession of short-term price booms and busts as waves of fashion interest moved into steel, nickel, tin, aluminium, lead, ABS plastic, wheat, corn, whatever (apart from onions, but that’s another story).

I think that without extensive and wide-scale government intervention into the futures / derivatives market (and you may be surprised to hear that many governments are actively considering this!), (3) is what manufacturers are now stuck with… forever. Hence this level of price volatility affects the raw cost of every physical thing you buy.

From the point of view of a manufacturer, this price volatility of physical stuff is like a dark, dark shadow hanging heavily over how you design things. Nobody wants to design defensively for price volatility; nobody in the twentieth century has really had that as a dominant factor guiding their design strategy; typical manufacturing design strategies revolve around engineering an appropriate balance between scale and demand. All the same, I suspect this mad (and maddening!) price volatility will rapidly turn out to multiply the strength of the many pro-green arguments by a major factor. Engineering devices as platforms for long product life, reduced resource consumption, etc are now the starting point for Manufacturing 2.0 – whether or not you want to call them “Green” doesn’t matter.

But what hardly anybody seems to have noticed is that really long life products are actually more of a service than a product. Which (I think) means that the next wave of mega-manufacturers will surely go completely vertical and sell long-life services directly to end-users, destroying every shred of value chain between them and end-users. Ultimately, it seems that the upshot of a “Green” manufacturing economy is vertically integrated service providers masquerading as manufacturers.

When I put this point of view to my ex-Reuters friend Martin, his response was: ”so, you’re basically saying the mobile phone contract model will take over industry?” And in many ways, I think he’s right: manufacturers may aspire to be Lean and Toyota-like, but their real future is Orange. Who’d have thought it, eh?

1. Minimum Viable PΦrn: make sure your launch site touches a raw nerve.
2. The Market Will Decide: build on customer niches with the most traction.
3. High Velocity: ensure each online transaction lasts three minutes max.
4. Freemium: free samples leave a funny taste in the mouth, help visitors trade up to the real thing.
5. Fill Your Funnel: find enough (bulging) eyeballs, and every startup problem becomes trivial, right?
6. Be Hard To Beat: find your unique angle and work it, work it, work it, baby.
7. Build Customer Satisfaction: cultivate that warm fuzzy feeling wherever you can.
8. Love Your Suppliers: it’s a hard job giving you what you need, so be good to your suppliers.
9. Love Your Customers: keep finding ways to fill their eyes with tears of joy.
10. Retention: keep customers coming back to you, whatever it takes!

As startup methodologies go, I’d say this has 10,000x more empirical data than other fashionable so-called startup methodologies currently being touted. So, you should get with this “PΦrn Startup Methodology” programme: reposition your crappily self-indulgent social / digital / media startup as a pΦrn website that just happens not to have any pΦrn, and success will surely come your way!

Few people have heard of the Tech City Investment Organization, and even fewer realize that one of the main reasons it was set up was to encourage overseas companies to park themselves in Shoreditch, to “create more employment more quickly”. Hence the eyecatching entrance of Google and Cisco into the whole Tech City parade: of course, what we’ll do once all the web programmers in town suddenly disappear into their corporate maws is another matter… so yes, that was a great idea, Dave. ‘Great‘, as in… ‘utterly awful‘.

Of course, it’s true that TCIO would also like to encourage angel investors to invest in Tech City startups, but… have you seen any doing this yet? [No, neither have I]. And much as I enjoy chatting with Silicon Valley Bank’s smart & engaging Oscar Jazdowski, trying to apply SVB’s heavyweight expansion capital funding model to Tech City’s frothily lightweight, early stage social media startups is not unlike trying to crack a nut with a pneumatic Hammer-O-Tronic 9000. Well, you could… but, frankly, you’d probably lose your nuts in the process.

As normal, you don’t have to scratch very far beneath the surface hype to see the real problem. For even if you don’t remotely believe TCIO’s apples-for-mangos statistics for the allegedly dramatic expansion of tech startups in Tech City (and I for one don’t), it’s surely terrifically unfair that those [quite literally] poor darling hotdeskers have such an extraordinary burden of government rhetoric dumped on their collective shoulders. Much as I love them as individuals, how exactly are these self-funded software engineers supposed to change the fortune of UK plc? Or is it rather more likely that 95% of their startups will pivot, pivot, stutter and fall, leaving their principals to drop their principles & grab jobs with the webbed-up corporates now conveniently situated next door?

It’s a little bit galling that almost all the attention goes to Tech City, when there has (according to other recent [and probably more reliable] statistics) been a huge surge in startup activity right across the London area. I’m not blaming TCIO’s Tech City tsar Eric van der Kleij for this, but I can’t help but notice that as soon as Tech City gets mentioned in the media, it’s as if everyone’s suddenly trying to behave like an idiot venture capitalist circa 1995, but crossed with all the idiot parts of the Lean Startup circa 2011: people trying to fund VC wetly disintermediated dreams with pin money. Does that notion make any sense to you? Nope, I didn’t think so.

If we can somehow manage to resist the temptation to inhale too deeply from the Tech City bong, the big question is this: what would actually make a difference? What positive thing could the Government actually do? Well…

What about a ‘Small Manufacturing Tsar’?

Being realistic, to make a macroeconomic difference you’d need at least a hundred startups to go totally platinum – to become billion dollar export-heavy industries all in themselves. And that’s a big ask, seeing as barely any UK companies have managed this trick of late.

Yet I think one sector that stands a finite chance of achieving this is modern lean manufacturing, and – not for the first time in the last few years, it has to be said - the world viewed from my seat appears to be radically different from what Whitehall seems to be seeing.

For me, modern manufacturing is totally rock & roll, and offers a real chance of making a macroeconomic difference to exports, tax revenues, and to UK plc in general. Electronics development (and even mechatronics development) has gone garage, while hardware startups are just starting to go properly guerilla too.

Yet many people – even otherwise well-informed and erudite commentators – still struggle to see the differences between, say, British Leyland circa 1975 and a miniaturized mechatronic startup circa 2011, when (apart from the “both making things” bit) you’d have a lot of trouble finding any similarities. I hate to say it, but a lot of this is just academic snobbery, self-appointed faux-elitist nonsense from people who excel at engaging with theoretical knowledge, but disdain getting involved with anything remotely practical. Score one (own goal) for academe, sadly.

The central communication problem here is that small manufacturing has no obvious champion, no clear focus, no accepted role models – the closest Vince Cable gets is when he talks up Brompton Bikes (what about Grahame Herbert and his Airframe folding bike, then? ).

Hence what I think the UK needs right now is a ‘Small Manufacturing Tsar‘ – someone who can champion, focus and promote small UK manufacturing, to help the country’s small manufacturers get the mindshare and attention they need. They’re not British Steel and British Aerospace, they’re small (yet hugely scalable) companies who don’t happen to fit the kind of startup pigeonholes and templates that funding bodies like the Technology Strategy Board would like them to conform to. They are, as per the title of a recent survey, “Born Global” - because proper manufacturing may now start small and ‘Lean’ (in the correct sense of the word), but it starts with a foot in every country. And that’s… quite a lot of feet.

And so here’s my open question to the Business Secretary: Mr Cable, do you have any current plans to champion, focus and promote the small manufacturing sector? Might I suggest that a Small Manufacturing Tsar might help to do this?

Here’s a big insight I want to share with you, something which could change how you think about startups and finance: but all the same, as with my talk on Dangerous Reasons, you probably won’t like it…

For all the obvious reasons, I don’t tend to watch a lot of TV: but Storyville’s “Inside Job” (by Charles Ferguson) a few days ago was irresistable viewing and set me really thinking. The way Ferguson tied a succession of leading “economists” and their universities in deservedly squirmworthy knots was exquisitely masterful: but for me, the star turn of the whole show was the former chief economist (2003-2007) of the International Monetary Fund Raghuram G. Rajan, a man so utterly modest he doesn’t even appear in the Inside Job IMDb credits.

What Rajan presented to an elite conference in September 2005 [timecode 38:30 - 40:40] was a paper called “Has Financial Development Made The World Riskier?” (hint: the answer is ‘yes, it bl**dy has’). His idea was that even though investment bankers were being incentivized to do big deals that increased their companies’ risk exposure, they were not being compensated in risk-adjusted money. Let’s say your company is worth £10m and currently has a 10% chance of failing: you’re now offered a deal that’s worth a further £10m and gives you personally a huge bonus today but increases your company’s risk of failure to 50%… would you take it? It would seem that lots of people on Wall Street basically answered ‘yes’ to this question… all of which led to the overleveraged, hyper-inflative, non-’AAA’-securitized fake mortgage context for the 2008 Credit Crunch etc. That is, they weren’t making more money while taking less risk, but making more money while taking more risk. If individual agents had been compensated in what Rajan calls “risk-adjusted money” for such insane deals, the bonuses would have flowed in the reverse direction (and 20x greater magnitude, too).

While I was talking with my friend Alan Ferdman yesterday, I was struck by a strong parallel between Rajan’s insight and the car industry. Everyone seems to have a car mechanic story about how fancy-looking car X suddenly developed a computer fault Y and had to be scrapped rather than fixed. That’s an example of fragility: how the risk of electronics failure reduces the effective value of a thing. If roughly 25% of a certain car model will develop a computer fault within 2 years (but you’ll never know in advance until it just happens to happen to you), then that’s an example of an object having a different risk-adjusted value. Alan mentioned how Keith Armstrong had discussed whether a short-lived EMI (electromagnetic interference) fault could have led to Toyota’s “Sudden Unintended Acceleration” problem: fascinating, awful, and terrifically fragile, whatever the actual cause.

Supply chain fragility affects us all too, whether via oil affected by civil war in Libya, hard drive component factories in Thailand destroyed by a tsunami, or a PCB materials factory in North-East Japan hit by a nuclear evacuation. In the MBA-optimized Just-In-Time world we live in, we are so (virtually) close to the producer that the cost of the things we need becomes inherently more volatile: how can we give peas a chance when we don’t know if we’ll still be able to afford them tomorrow? Or eggs? Or beef? Or bread?

Weaving all these strands into a single picture, and I think you’ll find an economics mega-gauntlet being thrown down in front of you. Might it be true – the challenge goes – that for almost all companies, economic development in real terms has now ceased? If a company needs to take on substantially more risk in order to grow, is that company really growing? In risk-adjusted money terms, the answer is that it probably isn’t – it’s merely appearing to grow. It would rather live in more risk than stay as it is: but that way lies chaos, mayhem and disaster.

As financial managers, we are supposed to deal with this by factoring in contingent liabilities, not only real (contractual) ones in our actual accounts but also predicted exposure scenarios in our management accounts. However, for all the supposed rigour of risk management, I think it’s actually almost impossible now to conceive and generate a sufficient number of scenarios to cover all manner of supply chain, finance, channel, and customer fragilities. If the world has apparently become richer while simultaneously becoming more fragile (far beyond merely ecological viewpoints), has it actually become richer, or is it the same, or perhaps even worse?

The whole Just-In-Time thing is simply a way of concentrating, multiplying and sharing fragilities, rather than reducing fragility. Yet that is the channel distribution model the world is increasingly moving towards, in terms of mutualizing the optimized returns on its deployment (in the form of lower customer prices) yet exposing everyone in the chain to more fragility. We save money, but the price of our electricity and petrol is suddenly hugely volatile.

In a lot of ways, it would be useful if we could price up our startups in terms of risk-adjusted money: in many ways, that’s what VCs and lead angels do when they negotiate valuations with entrepreneurs. However, the very ground upon which we build our startup shacks has itself become fragile: one of the first things that happened to my own startup was that the fabless Korean company making the image sensor I planned to use went under – the vast chip foundry making its sensors ran out of money (so the story went), and without any hope of production it folded too. The problem is that if we can’t conceive the ten thousand ways in which the invisible infrastructures we implicitly yet absolutely rely on – water, air, broadband, staples, paper, biros, hard drives, RAM chips, sensors, cables, lead-free solder, whatever – can fail, we can’t possibly price up such pervasive risk. Perhaps this is the real reason startup funding dealflow choked: the inability to price up infrastructural fragility.

Arguably, an even bigger problem is that almost all the social media and digital media startups I see being developed, talked about, and talked up seem to based on an even bigger folly: that there is an infinite amount of ‘juice’ to be squeezed out of the systems around us, by using social hacks, GPS hacks, network hacks, recommendation hacks, gift hacks, etc. But if you stop to think this through this for even a moment, you’ll see that the implicit claim here is that startups can somehow disintermediate the economy out of its dark place: that we can macroeconomically grow by cutting out middlemen (middlewomen too, presumably) or channel owners.

And so I think Internet discourse is killing us: it promotes the idea that we should be applying our ingenuity to shortening and tightening supply chains (i.e. increasing fragility, increasing systemic risk) rather than trying to reduce risk and fragility. We should instead be making everyone rich by reducing fragility, yet the only obviously applicable skills from the MBA smorgasbord seem to increase it. As a design, engineering and finance community, we’ve lost the knack of building worthwhile things – of even trying to judge what is worthwhile and what is merely fragile.

Even though the dismally low-aim Lean Startup community tries to claim that the important question is “Pivot or Persevere?“, I think the only question of real worth is “Worthwhile or Fragile?“ Make money, sure, but stop obsessing on optimizing social hacks and instead start building things that make a positive difference – things that make the world less fragile, not more. Do you know how?

(Again, I told you you wouldn’t like it.)

To be precise, this is because every single business success story is a particular historical narrative (i.e. of what actually happened), not a general scientific template (i.e. of what might happen in a hypothetical business): and in fact, given the terrifically small number of startups that achieve success with a high-growth development curve (often with numerous strokes of luck generously helping them on their way), such rare businesses are almost all outliers in the business landscape. Yet the temptation to post-rationalize all that ‘outlieritudinosity’ and to promote the particular approach you took as being a universal entrepreneurial path to success is apparently overwhelming: for if bookshops were taxed on the number of glowingly-confident head-shots of cashed-out entrepreneurs they had on their shelves, they’d surely all fold within a day, mmm-hmm?

As far as Lean Startups go, Eric Ries is a smart, sharp guy, one who is amply self-aware and reflective enough to know all the above… but he still persists in making universal claims. Using one of his favourite Lean techniques (the “Five Whys”), we might therefore probingly ask a series of five ‘Why’ questions, aiming to get to the root of this issue rather than getting mired in the surface details.

Firstly, why is he so certain that his consulting recommendations for startups (which in turn were built largely on his personal experience at a single company, IMVU) are well founded enough to drive a global ‘movement’?

I suspect the answer is that Ries is mainly talking about Internet businesses with a framework you can use to carry out rapid customer experiments. Even though he used to talk the Lean Startup up as an extension of Steve Blank’s Customer Development, Ries’s book actually seems to have pivoted round to the quite different idea that the customer doesn’t know best, but performing lots of A/B experiments on them helps you learn from their aggregate behaviour what path to follow. So, Ries’s certainty seems to stem from his experience at IMVU using the process of engineering statistical experiments on microtransactions (even if the early-pipeline currency is ‘attention’ rather than ‘dollars’) to learn genuine data about its customers, and his belief that it was this process that led to its success.

But why (the second why of five) does he think his personal experience at IMVU just happened to give him a unique view of startup business truth? From his account, IMVU made plenty of mistakes early on and was manifestly not customer-led or even really customer-engaged: Ries’s eventual epiphany seems to have been the realization that his company was in a position to use tech to improve itself, not just its product. And so the answer to [why #2] would seem to be that Ries’ view of the Lean Startup was as something that uses tech to institutionalize a kind of ’customer awareness therapy’, i.e. that numbers from experiments can help your company ’Get Real’. Essentially, it’s a tech answer to a social awareness problem that enabled IMVU to drop its stealth-mode conceptual baggage and get on with the real business of engaging with people and satisfying their needs with avatars that don’t walk.

But why (3/5) does Ries think his particular tech solution is a universal solution to the social problem of customer development? I suspect the honest answer would be that this opinion came from his background as a CTO: the answer he developed relied on appropriating tech tools to develop knowledge of IMVU’s customers. He was apparently amazed to find that the tech tools he just happened to have in his hands already were able to help his company get what it wanted, and this amazement has somehow driven his quest to help other people use their own tech tools to get what their companies want. It’s the joy of techs: a kind of engineer empowerment exercise.

But why (4/5) does Ries think engineers should be empowered in this way? Again, given that he started as an engineer and that most of his effort over the last few years seems to have been involved outreaching to countless other engineers, it seems that his Lean Startup movement is actually just a collective business land-grab by software engineers. By trying to reduce social problems to technical problems, the idea is to turn everything into an engineering exercise, a conceptual business structure where you don’t need to know about product or marketing or PR or personal relationships, your customer experiments will (eventually) tell you all that, by way of pings on a learning metric chart. As a result, it’s resolutely anti-theoretical, and indeed anti-pretty-much-everything-that-isn’t-engineering: even his “anti-waste” angle is supported only by a few carefully selected narrative tales of the unexpected. Does he have any real data to back up his assertion that non-Lean-Startup businesses are wasteful? What he manifestly fails to mention is that Lean Startup development often takes a lot, lot longer: sure, you may waste less physical resources, but you can end up wasting a vast amount of time to do so. Time never really gets factored into the economics equation: it’s somehow assumed you have plenty of it. (Errr… no, you don’t].

But why (5/5) waste all this effort on driving what is essentially a business land-grab by engineers? The biggest universal claim implicit in Lean Startup is that startups only need engineers: and that reeks to me of a parochial engineering-centric mindset being extended far beyond its genuine validity. I suspect what Lean all comes down to is that Eric likes engineers, and wants them to prosper: but surely promoting his particular experience as a universal way of running startups is a bit of an extreme way of doing that?

Really, should you lean on him?

It turns out that these are caused (I’m pretty sure) by the analog offset sampling underflowing: if any of the four offset registers (R0x060, R0x061, R0x063, and R0x064) end up getting set to the minimum value (0×101, i.e. -255), then you get these odd-looking streaks. If you then disable the analog calibration (by setting bit 1 of R0x062), the streaks disappear: but unfortunately you also get a huge colour flash whenevr you do (bizarrely, this can look like a pink tartan pattern overlaying the sensor image), so this isn’t apparently a register you can practically change in real time.

After a couple of days of determined register poking, the least-worst fix to ameliorate (if not exactly ‘fix’) these low light streaks therefore seems to me to be to permanently disable both fast sample mode (by setting bit 15 of R0x062) and binary search mode (by setting bit 11 of R0x062). OK, it doesn’t make the problem go away completely, but it does seem to help a lot. Something Linux driver writers might want to know about!

Incidentally, I presume this holds true for the MT9P001 as well because all its black level conditioning registers seem to be identical. So, Nick’s top tip for understanding the MT9P031 is to read the MT9P001 datasheet as well, basically for the bits Aptina left out.

PS: my next stop is trying out the same thing for the MT9M131 (which appears to have an earlier, slightly less sophisticated version of the same IP block), either by disabling the “rapid sweep” mode [by setting bit 15 of R0x060] or forcing the rapid step size to 1 [by setting bit 4 of R0x060]. Fingers crossed that will help…

For want of a better phrase, you can think of ’anti-knowledge’ as something passed off as the truth despite not actually being true. Of course, an outright lie would clearly qualify (duh), but probably the most dangerous type of anti-knowledge is a persuasive story built around a lie, particularly ones which serve to define an entire way of thinking.

I discussed a few such startup stories in the “Mythologies” section of my recent UCL entrepreneurship guest lecture, e.g. the cult of the “winner entrepreneur”, or the cult of the “powerful idea”. In fact, the more I looked at the whole entrepreneurship rationale, the more I concluded that it was nothing less than a sprawling minefield of (plausible-yet-false) anti-knowledge. The curious Zen gatekeeper challenge facing entrepreneurs therefore seems to be to find ways of unlearning these stories so that you can tackle the (arguably even greater) real challenge – of making money in a partially freefalling global economy.

Yet even this doesn’t quite sum up the extent of the problem. My wife pointed out this evening how a number of startup ventures I’ve been involved with over the years have been planned around (and built upon) the truth of various plausible-sounding stories about their business context, only to find (once I’d committed the venture to action) that the people telling me that story had deliberately not disclosed the whole story… a certain product wouldn’t ever get CE marking; a certain route to market would only open up once you had three products, not just one; and so forth.

But how can you ever test the truth of persuasive-sounding stories, short of actually relying on them? Startups have few enough positive assets that it’s extraordinarily tempting to treat these accumulated stories as a kind of knowledge capital, when they can just as well – if they are built around a lie or deliberate omission - turn out to be a kind of knowledge liability.

Perhaps there’s a core weakness of human nature at play here, a desire to trust despite the untrustworthiness of the folk business knowledge that surrounds us: and perhaps the entrepreneur’s biggest Achilles heel is when this desire becomes indistinguishable from a need. For we somehow need those manipulated anti-stories to be true in order to believe that we stand a chance of beating the odds… yet we will likely be brutally disappointed when the mine embedded in it blows up under our feet.

This is broadly the same snake-oil business schools sell their students too. That is, that the stories learnt in the entrepreneurship module lectures will help them beat the startup odds – really, that the deluge of positivistic “history as told by lottery winners” case studies and abstract models washing over them will yield some kind of ’trickle-down’ microeconomic benefit. And business school lecturers would, for their own self-esteem, dearly like the stories they expansively relate to students to have universal resonance and truth, for they would hate to think of themselves as accidental purveyors of anti-knowledge.

But startups are just not like that: last year’s edgy market knowledge quickly becomes this year’s concrete overcoat – as competitors appropriate, adapt and extend ideas, so those same ideas become retrogressive. If you’re not on the shoulders of giants, you’re probably under their feet. What price knowledge then?

[p.7] The Government will: [...]

launch a new Seed Enterprise Investment Scheme (SEIS) from April 2012, offering 50 per cent income tax relief on investments, and will offer a capital gains tax exemption on gains realised in 2012–13 and then invested through SEIS in the same year;

Now, unless I’ve missed something really obvious this surely means that UK angels now have an exceptionally good reason not to invest in anything between now and April 2012 when the scheme goes live (subject to subsequent European ratification, which is by no means certain). But then again, it already takes such a ridiculously long time to close an investment round these days (9 months? 12 months?), the entrepreneurs most likely to be inconvenienced are those who are trying to close a round right here right now. So, even though it’s a great bribe, nobody should expect to see a tsunami of UK startup investment on TechCrunch in the next six months, OK? *sigh*

On the other hand, the Government really, really wants to find a way to encourage banks to lend to SMEs, though apparently with neither a carrot nor a stick…

[p.7] The Government will: [...]

introduce a National Loan Guarantee Scheme. Up to £20 billion of guarantees for bank funding will be made available over two years. This will allow banks to offer lower cost lending to smaller businesses, subject to state aid approval;

Hilariously dismal! As my business bank manager patiently explained to me last month, UK banks don’t want to lend to small businesses for the simple reason that they are now measured by their balance sheet. So, unless that startup happens to have any kind of collateral to put up (and no, intangible stuff such as IP and patents doesn’t count, but thank you for asking), the answer is basically going to be a no at any price – reducing the potential spread by 1% will make no difference if the lending decision pointer remains rusted on [NO].

So it would seem the government has painstakingly constructed a microeconomic lending lever to pull that isn’t connected to any actual banking machinery. On the bright side, if no bank takes up the offer, this could be the cheapest policy announcement ever (if admittedly also one of the least effective).

Plainly, the Government knows that SME lending is just plain broken: the level of lending done under the Enterprise Finance Guarantee scheme has continued to collapse over the last couple of years, for the simple reason that the banks now have no incentive to lend to startups at any price. Moreover, surely the way that Project Merlin has manifestly failed to deliver any real lending to SMEs (i.e. not converting overdrafts to factored lending at gunpoint) is as big a red warning flag as the Government could ever require? Why is nobody talking about why Project Merlin has failed? The most relevant commentary I could find on this seemed to amount to a big shrug, that maybe this revised scheme somehow replaces Project Merlin?

Oddly, the macro shift in bank lending strategy from working capital to invoice factoring came at the moment when invoice factoring become (sort of) democratized via independent platforms such as MarketInvoice. So if working capital & lending is history, and even factoring is better done elsewhere, what really are UK business banks now for? With the High Street in freefall, the poor dears haven’t even got coffee shop franchise presentations to lend against now. It’s tough being a bank when you don’t actually want any customers, right?

And finally… on the third hand (there’s always a Third Way with modern government, thanks Tony),

[p.7] The Government will: [...]

make available an initial £1 billion through a Business Finance Partnership, which will invest in smaller and mid-sized businesses in the UK through non‑bank channels.

If you’re a startup looking at this, all you basically need to know is that the chance of any of this money arriving in your direction is zero. No, by “smaller” they don’t mean you at all, they mean established companies that aren’t quite as big as they’d like. Just so you know!

What a load of pitiful rubbish.