Yet his story is fascinating because it is a definitive study in luck: Not just pure chance. But the type of luck that comes from a combination of unusual personal interests, social circumstance, and the active pursuit of something different.

It’s a reality that few “successful” entrepreneurial people acknowledge, because it’s an uncomfortable reality: It doesn’t fit neatly into a 5-point plan for instant fame and fortune [also see box below]. And it leaves a nagging doubt that the outcome could easily have been unsuccessful. And while I suspect that Alex isn’t comfortable with pure chance, he provides ample examples of how other elements of luck can be biased. How the odds can be improved. The dice loaded more favourably.

Those examples make Alex van Someren worth understanding. This article is based on a talk he gave to the Edinburgh Informatics Forum. In this article:

• Little Acorns
• Acorn Development
• ANT
• nCipher
• Trading Stocks
• Issuing Stocks
• Luck

Little Acorns

Born of an entrepreneurial father, Alex and his younger brother, Nicko, were raised in Cambridge, England. Cambridge is important, because both brothers were interested in electronics, and in the late 1970s (and arguably still today) Cambridge was at the heart of Britain’s “computing” industry. Aged 14, Alex discovered that Acorn Computers (as it was later known) was based in Cambridge, and he wrote to them asking for a job. They told him to visit during the school holidays, and on first day of those holidays, Alex was on their doorstep. A presumably bemused Hermann Hauser sent Alex home with an Atom. An Acorn Atom, one of the first genuinely personal computers.

This was “getting what you want by being prepared to take it,” as much as “right place, right time”.

Alex and his brother (“the smart one”) spent the rest of the day translating a Star Trek game onto the Atom, and duly returned to Acorn the following day, tape [audio magnetic] cassette in hand. (My first computer experience was very similar – aged 7, writing what would now be called a roleplay game onto my father’s kit-built Sinclair ZX81.) Acorn’s staff were impressed – not least, because they had a new game to play – and Alex and his brother continued to “work” for Acorn for the next 3-4 years, variously hacking and testing Acorn computers. They were too young to be formerly employed, so were paid in free computer components and products.

Acorn Development

Aged 17, Alex was offered a job with Acorn. Since he now “had a job”, he lost interest in formal education, and never attended university. His job in customer service and bug-fixing exposed him to the “people side” of computers. But, by his own admission he was more-or-less unemployable, and after 2 years moved to London to become an independent computer consultant.

This was a period when computers were rapidly evolving from the expensive corporate mainframes, to widely available cheap personal devices. Businesses knew they wanted to use computers, but didn’t know how. Or sometimes why. So, Alex both earned an income, and learnt how to develop useful products. He cited the replacement of a manually-operated paper teleprompter (auto-cue used in television) with a computer-based device: Although it was relatively simple to programme words to move up a screen, live television required very high standards of reliability, which meant emphasis on testing and quality.

Alex used his knowledge of Acorn Computers to develop various related products: A card that “made Acorns go faster” became so popular he merged backwards into his father’s business to sell it – “dad already had a credit card machine.” He wrote the earliest book on the ARM processor – the Acorn-based computer architecture now found in many (possibly most) personal electronic devices, including mobile phones. Worked on an Acorn emulator to run Microsoft software (Microsoft was becoming dominant, an dominance that would eventually lead to Acorn Computing’s bankruptcy). And implemented a cheap form of networking for Acorns, called Ethernet.

ANT

Meanwhile, Alex’s brother, Nicko, had continued on into further education. While at Cambridge he had become aware of this thing called the internet. They ported the first popular browser, Mosaic to the Acorn, adding email and FTP (file transfer) features. This created the business called ANT (“Alex’s Networking Team – although everyone else calls it something different”), which continues by providing software for services such as interactive screens in hotel rooms.

Oracle approached Acorn to make a home internet device. And consequently raised the question, would Alex van Someren license his browser technology to Oracle? There was only one catch: No payment. Oracle expected prestige to be enough (Oracle was that big in the early 1990s). Alex’s gut reaction was no – why give the technology away? But his wife changed his mind – you do know who Oracle are, don’t you?

As events transpired, the Oracle project was a commercial failure. But it had led Alex and his brother to start working with the encryption of data sent across the internet. Encrypted communications protocols allow confidential information (like credit card details) to be sent across the internet without risk of the data being intercepted and stolen while in transit. Netscape had already implemented SSL (Secure Socket Layer), but it was technically very slow for the host server (the machines running the website). Slow meant expensive: Many more physical server machines were needed to operate a SSL-based website, than a normal website. A big problem looking for a clever solution.

Box: Team Work
“The press” can create the impression that the leader of a company is the most important person, but isn’t the case. Alex tends to be “the front man”, happily dealing with the more bureaucratic elements of running the business. His brother, Nicko, is described as more capable with the technology itself. This idea of keeping the full skill-set distributed between different people, in different combinations, continues into the wider company. “Team work” doesn’t mean that everyone tries to do the same thing.

nCipher

By chance Nicko had meet a venture capitalist, who had made a vague offer of money, should the pair have any good ideas. Alex read a “business plan in 24 hours” book and sweated blood over the perfect “pitching slide-deck”, before the brothers flew to Canada to meet Terry Matthews, the Welsh technology billionaire. 3 slides in, Matthews interrupted to ask how much money they wanted, before suggesting they “take a million now, and see how you go”. The brothers upgraded to First Class for the flight home.

It transpired that Terry Matthews didn’t just want a third of the business in return for his investment, but a further third was to be owned by an associate company. Which meant that the van Somerens had already lost control of their company in the first round of investment. The process was not exactly “by the book”. But, in spite of Alex’s misgivings (see Oracle, above), the brothers were still in control of their business from day-to-day – and didn’t do so badly in the end.

While they understood the problem, they didn’t yet have a solution. Or rather they did, they just didn’t know it: Back in Cambridge, staff and ideas were “crowd-sourced” from local pubs (bars inhabited by students and tech’ types). The solution itself was described as “a load of ARM chips” – reusing locally produced and understood technology. The solution was about 30 times quicker at de-encrypting secure communications. Ergo, requiring 30 times fewer expensive web servers. A commercially viable solution.

Box: Role of Universities
Alex’s story explains a lot about the role of universities in entrepreneurial innovation: That university towns create a suitable background environment and ecosystem, rather than specifically training the people required to lead any commercialisation. Someone that has spent most of their life in education/research may be able to formulate a solution, but the problem may only be understood by someone with more commercial, “real world” experience. The skill-sets are different, and you need both. It is easy for decision-makers to be fooled into the belief that innovation simply “comes from universities”.

Trading Stocks

In 1996 electronic “ecommerce” was almost exclusively occurring in the United States. So although the company remained based in Britain, its sales operations moved to the United States. To Boston, where Alex’s mother was already living (another small background/geographic advantage).

Alex was too late to hire a stand at the main (RSA) data security conference, so took a suite in the same hotel, and tried to “button-hole” (accost) people in the lobby, as they entered the conference. Alex mixed up 2 similar looking people, and ended up talking to someone he wasn’t planning to talk to. Except that the person he was talking to transpired to be from Fidelity Investments, which operated a large stock-trading websites. It transpired they were conducting 5000 stock trades per second, where each SSL trade took a third of a second to compute. This traffic required $150 million [I think I got that figure correct, even if it seem outrageously high by current standards] of Sun servers. Needless to say, they were very interested in reducing the number of machines by a factor of 30.

Unfortunately Netscape (then the developer of the dominant web browser) hadn’t returned Alex’s calls, so the new technology couldn’t be used. Fidelity Investments didn’t just secure the first $1 million of sales for the new van Someren business, nCipher. They convinced Netscape to change their browser, to accommodate Alex’s product. And the rest, as they say, is history.

Alex also cited $5 million of sales to Microsoft, for Hotmail. Sales which were made by someone who just happened to be working late in the office. Alex’s argument, that while chance is involved, actions had been taken by individuals that allowed that chance to occur: They wouldn’t have succeeded by simply staying in bed.

Box: Intellectual Property
Patents make investors happy, because they are somewhat quantifiable assets in an otherwise intangible business. But sometimes it is better not to protect intellectual property with a patent, because then competitors will never know how something works. The result is that the least important things are often patented, while the most important ideas simply remain closely-guarded trade secrets. Electronic security is an exception, because nobody will trust a “black box”. Instead the business aims to use standards, preferably standards they have invented and championed themselves. Those standards then become the basis for the creation of further intellectual property.

Issuing Stocks

The company was offered (IPO) to the London stock market at the height of the “dot com” boom of the late 1990s: A £350 million valuation (over $600 million) on a business with $4 million of (venture) capital backing, $15 million of annual revenue, and still losing money. The company was obliqued (by the market) to sell a proportion (20%) of the stock, gifting it a huge amount of cash. Alex used the interest on cash to make 4 acquisitions, before eventually returning the cash to the shareholders.

Alex van Someren’s best acquisition was of a company that had failed, after burning through $50 million of venture capital funding: They waited for the business to fail, then manage to secure 2 containers worth of server machines, and a lot of Intellectual Property rights for a mere $120,000. His worst acquisition was of a business with “optimistic” revenue predictions, that was originally intended to be purchased alongside another complementary business (which Microsoft purchased during the negotiations). The result was $10 million wasted on something that wasn’t making money, was to create law suits, and didn’t have a clear strategic reason for being.

After a decade leading nCipher, Alex had become bored, and someone else took over the day-to-day running of the company. Attempts to sell the business to a competitor fell foul of competition regulation: The plan to merge companies with 60% and 25% market share together upset the UK’s Competition Commission. nCipher was eventually sold to the French Thales group.

Box: Capital and Mentoring
Alex’s products tend to be “software in a box”, where the physical hardware is a significant part of the product. Hardware tends to require (venture) capital backing, because of the high startup costs. Software enterprise now dominates: Software is much easier to “bootstrap” (fund yourself and/or from revenue). The ideal situation (for the entrepreneur) is not to have to sell a portion of their companies in exchange for capital: The traditional funding role of venture capital is diminished (something I’ve discussed in the context of Cloud computing). Mentoring is one area where venture capital organisations can still assist, however the importance of mentoring remains questionable: Alex acknowledged that he was never consciously mentored, and much of his life has involved “screwing up as [he] went along” – merely, on balance, getting more right than wrong. Of course, he’s also giving talks like this, so clearly thinks there is benefit to sharing past experiences.

Luck

Several years ago Marc Andreessen – the founder of Netscape and, as such, almost a parallel life to the van Somerens – wrote about James Austin’s 4 kinds of luck. It’s a theory I’ve also discussed in the past: Active curiosity, unusual background, and distinct hobbies, are just as relevant to “luck” as pure chance.

Alex van Someren’s story fits the pattern remarkably well:

• Actively doing something: From “getting what you want by being prepared to take it,” to buttonholing people in hotel lobbies.
• Unusual social and geographic background: Family (parents, brother and wife), location (Cambridge), and time (immediately pre-internet revolution) are all clearly important. Few individuals will have had all these backgrounds.
• Distinct hobbies: If computing is still a bit “geeky” today, it certainly was when assembling a home computer involved a soldering iron.
• Chance: One wonders what would have happened if Fidelity Investments had not learnt about nCipher…

However, there is one further element, which is intriguing: Doing the opposite. Taking what conventional wisdom would deem to be the wrong decision. From giving technology to Oracle for free, to selling 2/3 of the company in the first round of funding.

This might be a logical extension of simply doing something a bit unusual: Unusual methods become just as valid to “luck” as an unusual background or interest. Alternatively, the underlying market might be so prosperous, that one could make a huge number of mistakes and still succeed. Both states are perhaps true, since the aim is generally to pre-empt the crowd – occupy a different position today, that everyone else will adopt tomorrow. An unusual approach may be required to be able to occupy a different position today, while tomorrow’s appreciative market allows unusual approaches to be funded. However, such a chaotic process is still bounded: For example, giving technology to Oracle was ultimately successful because it lead to further work on secure internet communications.

Partly it isn’t because creators haven’t adjusted their methods to match the new technology – we’re still wedded to a single start-to-finish process, with one outcome at the end. Partly it isn’t because feedback can be hard to gather and digest, and even hard to act upon.

An iterative method has become one of the defining characteristics of how I like to write, organise, and present text on the internet. At least, beyond this domain. But until now, I’ve struggled to apply it to internet-based video.

This article introduces internet-based iterative design, and uses YouTube’s “Hot Spot” analysis to show how we can start to apply an iterative approach to video and movie-making.

Iterative Product Development

The author of a published paper book generally gets one shot. One chance to have their works committed to paper. To be read by milllions. Or tens. A huge amount of effort goes into “getting it right”: Construction of text and story, editing, proof-checking. And in spite of this, book publishing remains a high-risk activity: For every top-selling author, there are others whose work ends up as pulp.

In contrast, the cost of making corrections or changes on the internet can be minor. At the extreme, the author simply types some new words. An update that might have taken a book publisher months or years, can be committed in minutes.

The ability to make rapid changes in response to rapidly gathered feedback makes the internet interesting: The most basic server access logs can be analysed to reveal that chapter 2 is generated much more interest than chapter 1, yet chapter 4 is hardly getting read. With enough readers, those patterns can be seen in days, or even hours. So perhaps the content in chapter 2 should be expanded, and we should re-write chapter 3 to better maintain interest?

Now we’ve expanded chapter 2, and noticed it has become even more popular. Obviously there’s a greater demand for the writing or information in chapter 2 than the author thought there was. Gradually the content evolves and gravitates towards (in the language of entrepreneurs) the nearest unserved market. Iterative product development isn’t just about “making it better”. It’s a way of finding an audience, customers, earnings.

The written word is an easy example to understand, but maybe all good design iterates in response to user feedback?

Probably always has. Stone wheels? Computers sold as recipe books? Especially where a cool technology is looking for a problem: An inventor that doesn’t start by trying to address a problem, but merely discovers a method of doing something. Post-It notes are a popular example, but this pattern is common from the Victorian era onward. For example, it took half a century of different people trying to use pressurized air for land-based transport propulsion, before a market niche was established.

The internet allows this process to happen a lot faster, but only if the presence of the internet becomes integral to the design process.

Personally, this methodology has turned a few highly technical pages on the mechanics of fishing, into a fishing guide read by millions (see Appendix: Iterative Writing in Practice at the bottom).

Limitations

Iterative product development isn’t a panacea. Or a free ride to perfection and untold riches:

• While internet-based products and services are comparatively (to manufactured goods) cheap and easy to change, constantly making changes can become very time-consuming. Designing with the expectation of change, helps. But ultimately you will reach a point where further changes don’t generate enough extra audience interest to (financially) justify the time spent making the changes. This is when to stop.
• There is no guarantee that your product will find the absolute biggest unserved market, merely the biggest such market near to the topic/interest area you started with. If you started developing an idea in an obscure niche, it’s not realistic to expect to grow outside of that niche.
• Iterative development is not an excuse to design garbage. Quality remains important: The first attempt has to be sufficiently “good” for enough people to use/read it to generate feedback.
• The process of analysing feedback, and developing new content, requires 2 distinct skill-sets. Someone that is good at the second, may be unable to do the first. An instinctively good designer might still produce a better product, although (I would argue) their method leaves more to chance.
• It’s not clear that this method could be applied to an entirely physical product – Zara’s version of fast fashion is a good example, yet customer feedback still takes weeks to filter through into new clothing.

Video

Most internet-based text content is easy. Changes can be made and distributed in seconds. Reasonably good feedback is available using tools like Google Analytics.

Video content poses a few problems:

• Minor changes require re-rendering and uploading, which (for anyone without Hollywood-scale production facilities) can take several hours, even for just a few minutes of video footage.
• Major changes mean re-filming, editing, sound design, and similar alterations that could take days. May not even be possible, if showing specific events or people.
• Detailed feedback is hard to get. At best you’ll get a reaction to the whole video – typically a number of people that watched, and the rating or comments of a tiny proportion of them.

The first 2 problems aren’t going away anytime soon. The best defense is to save all the footage you shot, including materials that didn’t make the final edit. Recording at full 1280×720 pixel resolution, 30 frames per second, I find that for each minute of the final movie:

• I shot about 20GB of footage,
• take about 10GB to the editing stage, and
• use about 5GB in the final version.

So I’ve already created a lot of redundancy – until I run out of hard disk space. That redundancy helps make minor changes, such as altering the length of a scene, but it won’t let you re-write the story or change the location.

However, small edit tweaks can make the difference between “good and great”, so some iteration is possible within video. In theory. The problem is that without detailed user feedback, how do we know what to improve?

A friend who worked in “new media” when it was new (in the mid-1990s), used say, “the skill was to know when to stop”. To misquote Damien Hirst, “a painting is finished after a long period of looking at it, during which nothing is added”. Personally, video editing involves a lot the later: Constantly replaying a rough version and making changes, until I start making adjustments that seem to make it worse again.

Unfortunately, the creator is not the audience. It’s easy for them to produce things that simply don’t appeal to anyone apart from themselves, don’t solve whatever problem their audience were having, or don’t appeal to viewers’ emotions.

Hot Spots

Which is why I find YouTube’s Hot Spots fascinating.

As often, it started by accident. I couldn’t upload the video below to the host I normally use for embedded video. So the YouTube version of the video became the primary version. Almost all of the video’s 10,000 daily views were hosted on YouTube. This meant that within a day, YouTube’s “Insight” analytics were displaying some representative data about how users were viewing the movie.

The video is primarily a tutorial, intended to introduce the new World of Warcraft fishing contest. All the footage is captured in-game – some of it “live” during the contest, some recorded afterwards. The whole movie was conceived, scripted, filmed, edited, and rendered over the course of 2 days.

Fishing is a good test, because it isn’t a terribly interesting thing to watch. It’s hard to make a “good” fishing video, especially for an audience that aren’t all hardcore anglers.

The video has been favourably rated, comments are complementary and (critically) not (yet) asking questions that the video was intended to answer. Plus a few other sites have embedded it. Good start, but could it be better?

Frame-Based Feedback

Below is the “Hot Spot” graph generated from the first 20,000 views. YouTube’s explanation of the measures:

The ups-and-downs of viewership at each moment in your video, compared to videos of similar length. The higher the graph, the hotter your video: fewer viewers are leaving your video and they may also be rewinding to watch that point in the video again. Audience attention is an overall measure of your video’s ability to retain its audience.

The base (x) axis shows the time the video has been running – it lasts 2 minutes and 2 seconds.

Let’s try and analyse what the graph shows. Numbers refer to points marked on the graph:

1. I added 12 seconds of introduction and title, primarily to give the viewer time focus, adjust the volume or screen size, or let any navigation/control widgets fade away. There are no credits – this is a 2 minute tutorial, not a feature film. Unfortunately there are several ways to read the initial downward decline:
   • Viewers think they missed something at the very start, so are restarting the video (the first sound is triggered while the screen is still black).
   • Viewers have observed the water, net, and title, and didn’t want to still be observing it 5 seconds later – they’re getting bored and leaving.
   • Some viewers started the video by accident, and never intended to watch, however good or otherwise.

   I compared this video to the graph for an earlier YouTube-hosted video. It has the same structure of introduction, but a longer, less focused (a wide, familiar city-scape) initial image. That second video was much colder over the first 10 seconds. So perhaps introductory shots need to be shorter, and move to “the action” faster?

2. The titles are gone, and the video moves to a slow-paced tutorial, with gentle text and rather repetitive scenes. If you watch, the video, you’ll notice a lot of views of the same Walrus-like character, with a lot of gnomes (the pink-haired creature) casting a line or catching a fish. The graph says that’s “ok”, but remains far from hot. In contrast, the comparison video performs better at this stage. The main difference is that the comparision video moves between topics faster, with less repetition of similar-looking scenes. There are a few reasons for repetition: The gradual building of momentum (ever faster scene changes – see next point) was intended to create the sense of excitement that these “first player wins” competitions create, but I don’t think it works. I also wanted to show that the shark (the aim of the contest) could be caught in lots of different places. Past videos have lead players to conclude that only the one precise place shown in the video was valid. Overall, this stage should drag a lot less than it does, and if possible, be made less repetitive.
3. The video gradually builds momentum, until by point 3, the scenes are changing at the rate of around 2 per second (slightly more by the end of the sequence). Audience engagement warms. Possibly this is “exciting”. Possibly too exciting, forcing some viewers to re-wind because they cannot digest the scenes fast enough?
4. The top of this second rise in temperature is marked by the 3 bangs and flashes, cutting to blurred, greyscale, slow-motion sequences. If those don’t make you look, nothing will! In the video’s narrative this is the first time something happens: The gnome caught the shark, and is now running home, desperate to get back first. It’s one of those heart-stopping moments (and in the original storyboard, was intended to use heartbeats). Cool. That is, hot. But worth noting that special effects alone can provide a negative distraction. For example, the comparison video’s coldest moment is when a sequence of quotes and images of their who said them, are merged together into beautiful blue water. Looks great artistically, but doesn’t engage the audience.
5. The heat is maintained while the first prize is displayed. This may be because the tempo of the video doesn’t slow down enough to let viewers digest everything (I had to win quickly, so making sure I had enough footage wasn’t a priority…). It may also reflect greater interest in one of the prizes (the ring). Either way, this section should have been longer.
6. Contest won, interest is dropping. The 6th point occurs when the runner-up prize is displayed. Sadly, the high-point of the story is “the win”, yet the tutorial aspect of the video has to cover not winning. And chronologically, not winning happens after someone has won!
7. We’re ending on a low, which can’t be good. I suspect this is because there isn’t much interest in “the boots” among many players. Perhaps I shouldn’t have dedicated 10 seconds to showing them being used, when the main aim of the video (how to win the contest) was clearly complete? The final giggle was an attempt to liven this section up a little, but comes too late.

The Hot Spots graph doesn’t show everything. Doesn’t reflect any variation between different people viewing it. It may not even be desirable to keep a movie “hot” throughout. There are almost certainly other ways of analyzing viewer behavior.

But areas for improvement emerged that were not seen when making the video. Even if I don’t re-make this particular video, some of improvements will hopefully filter down into new videos.

Yes, But

It’s easy to dismiss this as an expensive training exercise: Wouldn’t it be better just to ensure movie-makers were experienced before they started? If all of them turned out Casablanca, I’d agree. In reality, expertise does not mean infallibly. While YouTube is almost infamous for showing how apparently (to my eyes) terrible videos can be highly popular.

It would be great to think that Saturday night’s cinema audience might see a slightly better version of a film than Friday night’s audience, based on what the first audience enjoyed most. But not terribly practical. Similarly, television news might be history before the second iteration.

But down at “YouTube level” iterative production methods start to become more viable. Still tricky, but something that only took 2 days to initially create, can probably be remade daily, if required.

This isn’t just about rapid re-production. More important is the ability to start to read the minds of an audience the creator can never see. Try to assess what aspects of the video should be expanded. What the audience want, but are only partly getting. And to do that analytically, without the movie-maker ever meeting their audience.

At the extreme, it’s the introduction of almost scientific methodology into an artistic process, traditionally based around the artist’s opinion of their own work, and their experiences to date.

Most intriguing is that “the next” Steven Spielberg (or similar) probably isn’t learning their art with an amateur 8mm camera. They’ll be uploading camera-phone videos, animating Lego, or “machinimating” goblins. And there’s a chance they will start learning to use the analytical feedback available to them, in a way older generations never could…

Learn More

• The long lost formula for start-up success. No, really – Nigel Eccles (an Edinburgh acquaintance, although I don’t think we’ve ever discussed this) wrote something similar about iterative development. That we’re thinking alike isn’t entirely unexpected, since we’re both rather analytically-minded.
• Incremental versus iterative development – Useful clarification of 2 often-confused terms, by Alistair Cockburn.
• Wikipedia – Introduces various similar software-orientated methods.

Appendix: Iterative Writing in Practice

How did one small gnome attract so many readers, in spite of initially writing about the wrong thing? A healthy chunk of curiosity helps: Search and you may find things that work even better. But since you asked, consider this:

• Split text into separate pages (not like this article): It is far easier to trace and monitor page views, than to work out where on a page a reader is reading.
• Write around the edges of your topic: Both broader introductions and more specific detail than your core starting material. If the introductory material becomes more popular than the core, expand that introduction, and so on.
• Understand who is trying to read: Specifically their education, age, time-pressure – and write to a style and length that this audience can read.
• Watch what users do: Extensive forum discussions or comments are subtle indicators of what you need to offer. See what users do in the absence of anything you’ve written. A 200-post forum discussion about something you thought was trivial, clearly isn’t.
• Personalise it: The internet is a scary place, and you don’t help ease that fear by presenting words as a robot.

That isn’t the whole story. And there are many techniques within that. Remember that all the basic design guidelines on things like the structuring of text still apply.

In my opinion, it’s an on-going exercise in the discovery of the fact that most people aren’t like you, and have different problems and needs. Logical, really: If you write for yourself, you’ve optimized the text for people like you. Yet people like you write… and so have the least need of someone else’s writing!