Cutting your Comcast Bill in Half – Part 1, Internet

Introduction

Comcast’s business model is simple – sell to new customers on a good deal and then rely on their laziness and ignorance to increase average revenue per account to thousands of dollars a year. Over the last month I’ve upgraded the internet at my house, my office and my girlfriends house and saved up to 50% while getting up to 6x faster speeds.

In this blog post I’m going to show you how to do the same.

Loyal Customers Get Screwed

The first thing – and this is the most important thing – to understand is that loyalty is actually punished by companies like Comcast. When you’re an existing customer, a whole slew of plans and options just flat out aren’t available to you – as the South Park creators so successfully showed, when you’re an existing customer, you’re completely taken for granted (or, “their bitch”, thanks South Park).

The good news is, though, that you can overcome a lot of these problems just by being disloyal.

Saving on Internet

Before starting this process a month ago, the three specific monthly bills with Comcast were around $100 including taxes.

Initially, I followed the great advice of people like GE Miller and went through the “account retention” process – where you say you’re going to cancel your account and get immediately escalated to the Account Retention team. These are the people at the carrier who are rewarded and compensated for keeping subscribers, and who have a lot of latitude in what they are able to “include” or discount to keep you as a customer.

The rewards and bonuses must be pretty good, because some of them get pretty crazy.

While this is solid advice, there are still limits to what these people can and will do, and often their lowest price and best upgrade offer is still a much worse deal than you can get if you’re not a customer at all.

The solution, it turns out, is actually pretty simple. You become not a customer. Here’s the four-step process (with a bonus Step 5 to save another $500 a year).

Step 1: Choose a Plan

Providers are always running specials and deals to get new customers on board. I’m not sure what their Customer Acquisition Cost is (CAC) but given the number of advertisements I see it has to be in the realm of $500-$1000. For DirectTV, Selling, General & Administative costs make up more than 50% of its gross profit a few years ago – this is a lot of money.

This also makes business sense; they know through cohort analysis that if they can tempt you in with a good deal they’ll jack up the price and your laziness will keep you where you are.

Since I’m in America, the land of the free market and competition, there is almost no competition in broadband internet access. Being in San Francisco, that means I’m limited to looking at options with Comcast. At the time of writing, they were offering a 105Mbs internet plan for $44.95/month; the options change all the time though, so check out http://www.comcast.com/xfinity-internet-offers and decide on which plan suits you best.

When you look at the terms and conditions of the offer, you’ll note that one of the first conditions is that it is “available for new residential customers only”. That’s cool – you’re about to become a new customer, with some temporary help from a buddy.

Step 2: Enlist a buddy for an hour

Now you know what plan you want, it is time to start the process of becoming a new customer by getting some help from a buddy – it should only take an hour of their time, and you can actually return the favor for them if they want to do it at the same time!

The key is that your buddy is going to be signing up to the new internet plan at your house. They don’t need to live there – there’s no need for proof that they have anything at all to do with your address; all they need is some photo ID and a social security number.

To make it happen, you and your buddy simply show up at your local service center (Comcast ones listed here), and tell them that you’d like to cancel your service. Your buddy, standing next to you, would like to sign up for the “available for new residential customers only” plan you selected in Step 1 above.

You’ll want to bring your cable equipment with you, but you can hold onto it for a couple of weeks if you like (since you’re going to be coming back to do the same process in reverse in Step 3).

There is normally an account setup cost of $30, but if you ask them for a discount they’ll drop it down to $12 without a fight at all.

If you need a modem (and you should really buy your own – see further down this post) they’ll give you one on the spot. You’ll then be able to go home and plug it in (swapping out the one you already have) and once you go through a quick setup process (their phone number, 1-855-OK-BEGIN, works pretty well – just don’t do it on speaker phone because if the computer mishears you you’ll go into a never ending loop) and you’ll be online with your new faster cheaper plan in no time at all.

Step 3: (ab)Use The 30-Day Money Back Guarantee

Now, perhaps your buddy is a housemate or a significant other – if they’re happy to be the one with their name on the bill for the next 12 months then you can probably skip this step. However if they’re genuinely just a buddy doing you a favor who doesn’t want to run the risk that you won’t pay your cable bill and their credit report will be on the hook (or that you’re going to do illegal things online and get them in trouble as the legal account holder), you’ll want to do the process involved in Step 2 in reverse.

The good news is that Comcast has a 30-day money back guarantee, so you can head in after a couple of weeks and have your buddy cancel the service you set up in Step 2. They bring the cable box you got in Step 2 in and they’re done in about 20 minutes.

You, standing next to them, decide you want to become a new customer on the same plan. You sign up for the new plan/service at your own address, and you’re back in business, possibly for half the price.

Step 4: Set a reminder for next year

Most of the plans I’ve seen revert to their “normal” price after 12 months. So, you’ll want to set a reminder to go through this process again in a year.

Step 5: Buy your own cable modem

Comcast are currently charging you $10 per month to rent a cable modem (or wireless router). This comes to $120 a year, or almost $500 for the normal life of a piece of technology like this.

The good news is that you can buy your own from Amazon for around $60 if you don’t need wireless, or $100 if you do, which means you’ll be ahead in financial terms in as little as 6 months.

Savings

Now, some of you reading this will be thinking “hey, my time is valuable – is this really worthwhile?” You’d be right to think this way, but let’s look at specific savings and see how wrong you probably are.

Comcast Business to Xfinity Internet Plus Blast

Until this week we had Comcast Business at my startup. We’re not demanding enough yet to need WebPass or MonkeyBrains, and we were paying $84/month for 16Mbs.

In terms of changing plans, I didn’t even need “a buddy” because Comcast Business and Xfinity are very separate organizations inside Comcast. I simply walked into the Comcast customer service center and signed up for a new Xfinity plan as a new customer, came back to the office, and I was up and running – from walking out the office door to getting back and online – in under 60 minutes with 100Mbs internet for $45/month.

That’s a saving of $500/year – not bad for an hour’s work. If you’re legitimately earning more than $500/hour for every hour you work every week of the year (sure you are), then you might not get cash value in savings, but you’ll also see time savings by having your internet more than 6x faster.

Comcast Speed Test 1

Xfinity for Cable and AT&T for Internet

My girlfriend was running Comcast for TV and Xfinity for internet, due in large part because her apartment building told her she had to use AT&T (or another DSL service?) for internet access. Her total bill was over $100/month. I thought the instructions about using only DSL were a bit off because she was using Comcast for TV, and sure enough, it was possible to move her over to Comcast. Because she was an existing customer, however, she was stuck with paying over $100 to bring it all together – not a great result.

Through making the change to Xfinity for internet and cable box, she’s now paying $39/month. There’s still some frustrations with stepping back to non-HD cable, but we’re working on fixing that (I’ll have an update in a part two post about TV specifically).

So, while it isn’t apples for apples, she’s now paying $50 (when you include Netflix and Hulu) for basic cable, HBO and stacks of other streaming all through a super cheap Chromecast in high quality – a saving of 50% for internet 10x faster internet and all the content you can stream.

Wollongong’s Wonderful Renewal

TL;DR: my hometown has been a depressed and despairing place for all my life, yet on my most recent visit I was struck – truly struck – how much the city has changed for the better. It was breathtaking. This post is a reflection on my hometown’s history over the last three and a half decades (to get a sense of how far we fell behind) and some observations about what’s really working to turn the place around, creating an incredibly bright future.

Opening celebrations for the new Wollongong Central project. Photo: Robert Peet, Illawarra Mercury

The centre of Wollongong coming back to life. Photo: Robert Peet, Illawarra Mercury

Update: looks like this post has touched a chord – more info on the response in this separate post.

I’m writing this on a layover in Auckland flying back to San Francisco from one of my quarterly trips to Wollongong, my home town, located an hour south of Sydney. With more than half of the AffinityLive team based in our Wollongong engineering office, I make sure to get back to spend quality time with the team every few months – especially given the growth in our Australian team (up 150% in the last year).

Returning to visit my home town every few months – spending time with mum and staying in the house where I grew up – has given me a really interesting perspective to observe the changes happening in Wollongong. Like when you catch up with distant family members or friends with kids only occasionally, being an infrequent observer helps you see starkly the changes every-day observers see only gradually. Unlike kids who are “getting so big” and “growing up so fast”, a city can be getting noticeably better, or worse.

Noticing changes in our hometowns when we return isn’t anything unique or unusual of course – it happens to any of us who’ve moved away when we come back for a visit. When I notice the changes in Wollongong, though, I’m looking with more than the usual sense of nostalgia.

A Decade of Regional Development Efforts

For more than 10 years, through my early 20’s to early 30’s, I was involved in civic activities to try and make the city a bit less dark, dreary and depressing. On the civic front, this included being a foundation board member at RDA Illawarra (like a regional council/county) and a board member of the Wollongong Hawks (our national basketball league team). On a professional/technology front, this included co-founding (if that’s the right word) initiatives like StartPad (precursor to iAccelerate), ICTI and Digital Wollongong. All told, I’m guessing I spent around 2500-3000 hours working voluntarily to improve the prospects for employment, liveability, and the economy of Wollongong.

Like many hard(er) working champions of Wollongong, I toiled away because I believed in the potential of the city: the incredible human capital in the thousands of smart, educated people graduating from the University of Wollongong, the amazing natural environment with our mountains and beaches, and our close proximity to Sydney (and all that this overpriced, congested, global city offers).

But, while it was rarely discussed among those of us championing the city, I also knew deep down how dark and depressing the situation in the city was. Staying upbeat and positive in the face of a depressing reality is OK in short bursts, but trying to keep it up indefinitely will send anyone crazy eventually. And there were a lot of us showing crazy cracks.

Structural Suffering & Depression

Born in the last 100 days of the 1970’s, I’d never known my home town to be prosperous or successful.

As a city dependent on steel manufacturing and coal mining, the 80’s were particularly brutal to Wollongong. Technology and international competition reduced the steelmaking workforce by 80% (from almost 29,000 employees in the late 1970’s to 6,000 in 1996). By the middle of the 1980’s, a collapse in the price of coal meant the higher-cost underground coal mining industry couldn’t extract coal profitably competing with cheaper open-cut methods, causing numerous mines to completely close.

hard-coking-coal-real-price

The knock-on effects outside these direct employers – transport, maintenance, equipment etc – were massive hits on a region with a population of 200,000 people. Port Kembla, once a bustling town, effectively died (except for the prostitution).

When I was studying economics in high school, Wollongong’s unemployment rate was 5 percentage points higher than the national rate, and things were much worse for young people. Many of the “blue collar” jobs our newly retrenched locals had the skills to fill didn’t exist in the country, much less the city.

Social Disadvantage and Despair

In addition to this “structural unemployment” caused by major industry decline, the other big challenge was/is the massive-scale “social housing” developments (in the US they’re called “projects”) built in the north and south of the city in the 1950’s. The consequence is that the city has tens of thousands of disadvantaged people, many of whom didn’t count in the unemployment statistics because they didn’t bother looking for work (either because they believed it wasn’t out there or they were content to eek out an existence on welfare payments and/or less legitimate means). Not looking for work means a lower “labour force participation rate” – Wollongong residents were 15% more likely to be part of this “hidden unemployed” than the Australian average (Wollongong at 56.2%; Australia at 64.6%).

If the fifteen years to the middle of the 90’s were tough, things didn’t get better with the boom Australia experienced over the next decade: instead of catching up from a rough period, Wollongong fell even further behind. From 1996 to 2006, job growth in the Wollongong area was barely half that of the rest of Australia (Youth Unemployment in Australia, Burrows, 2009, page 5).

In summary, you had a place that had been mauled by structural change, had a much greater than average number of people who’d “dropped out” of the economy (at least) – a pretty poor situation to then get hit with “the recession we had to have” in the early 90’s.

If this wasn’t bad enough, when things turned good with the longest expansion since WWII for the rest of the country, Wollongong was instead just slowly staggering forward, creating jobs at half the rate of the rest of the country.

Dark Clouds & Self Delusion

The collective effect of all of this was an often dark, despairing cloud hanging over the spirit of the city. That the only “feel good” leader of the city I can remember was later found to be a paedophile (and murdered “Primal Fear” style) is as damning as it sounds. Other leaders like my friend David Campbell mainly tried to minimize harm and manage the situation, while many other “leaders” who were just in it for themselves and their crooked mates held the city back. Given the politics of the region (very safe seat requiring no electoral benefit for any government to give a shit about), even if there was a credible government turnaround plan based on leadership and investment, there wasn’t the political willingness to fund it, much less leadership to lead it.

While the city still had all of its natural beauty, you could see why Wollongong was sneered at and looked down upon by most other Australians.

Efforts to change perceptions, while well meaning, stood no real chance of lasting success because they projected fiction, not reality (locals will remember the “Image Campaign” and the ‘we all know it’s bullshit’ tagline “City of Innovation”).

To illustrate, imagine the experience of a visitor who’d caught the train to Wollongong; they’d have to navigate crowds of bogans, junkies and petty crims, run the gauntlet of western Crown St and the dark and violent mall (see video below), pass the eyesore of the entertainment centre, to finally make it to the beauty of the beach and Flagstaff Hill.

Don Draper couldn’t market our way out of that reality. The fact we tried is testament to our tenacity and belief in the potential of the city.

First Signs of Promise

I remember being involved in a project in 2006 called the “Wollongong City Centre Revitalization Strategy“. It was spearheaded by the state Department of Planning under Frank Sartor, and a special agency was set up, headed by the impressive and energetic Chris Johnson to develop plans for half a dozen cities in the state. Wollongong was the first to get the treatment (probably because it needed it most), and I was one of the committee members providing input and reviewing the ideas/research coming out of the Department of Planning and the Office of the Government Architect.

For as long as I could remember, ideas to improve the city’s situation were vested in “projects”, most of which were little more than thought bubbles. There was the project to install a gondola, Cairns-style, to the top of Mt Keira to boost tourism. There was the project to build a boardwalk, Atlantic-City-style into the Pacific ocean off City Beach. There were innumerable individual property development projects, all of which needed to get a planning exception approved by Council because the City’s land-use plan was a few decades out of date and anything of any significance height or size wise was impermissible. Some of the projects worked out well – Innovation Campus – and others were massive mistakes that will rob the city of potential for generations (building the windowless Entertainment centre and rebuilding a barely used Stadium on prime beach-front land are right up there).

The City Centre Revitalization plan was different. Rather than focus on a specific issue (or two), it identified a series of a dozen that the city could do to revitalize the city centre. The plan applied research and best practices from around the world (Wollongong certainly wasn’t the first city to find itself in a depressive downward spiral). Some of them were needlessly controversial (build higher density and really tall buildings around transport infrastructure like the station – oh no, tall buildings must be evil!?!). Some of them were more aspirational, and others were just common sense (yet the fact they still had many detractors showed how there is an inverse correlation between the spare time some people have to complain and their actual levels of common sense).

wollongong-city-vision-concept

The strange thing about the process was just how obvious and sensible the whole thing was: identify the problems, create a series of complementary visions to address them, and then change planning controls and policies to encourage them. Some inspired decisions by government (the free Green Bus) played their part, but on the whole it was about setting the system up (with better, modern rules and incentives) so the economic energy of the private sector could turn high level visions into concrete reality. The community’s role in helping shape the plan was at the planning stage, not the implementation stage – instead of arguing about building X or traffic change Y, the high-level blueprint right at the beginning was the focus of input. Of course, community participation was fairly poor (less than 1% of the city’s population made a submissions), but from what I’m told by people who do this sort of consultation for a living, the website we built and the town-hall meetings we held resulted in about 5x the normal amount of participation than this sort of thing normally gets.

The main pieces of the vision, after debate and dilution (opening the mall to slow moving traffic outside core shopping hours and bonus building height (or FSR) rules for buildings subject to design competitions being the two I most regret seeing sidelined), the rules were codified as a new Local Environment Plan (LEP – the legal document that outlines what can and can’t be built by “zone”) by early 2007. The stage was set, but then things appeared to make a big turn for the worst.

Darkest Before the Dawn

As they say, if you want things to change, you’ve got to change things. However, changing things on a city scale is a pretty capital intensive undertaking. Building new buildings, upgrading transport, roadworks and other cityscape improvements aren’t cheap, fast or easy. With most of the things needing to change in the city being privately owned property, it also wasn’t something you could mandate top-down – the private sector needs to want to change, want to invest.

All of this was going to be tough, a long game. Then two things happened – the city became embroiled in its largest ever corruption scandal (March 2008), and then not long after that the global financial crisis hit (Lehman Bros collapsed in September 2008, freezing credit markets globally).

The ICAC investigation into the corruption in the Wollongong planning and approvals department was dynamite – many locals knew of stories of corruption through shadowy networks that operated with such perceived impunity that they didn’t even bother trying to hide their behaviour, but to have secret recordings and explosive evidence that touched all three boxes of money, sex and power was a massive shock to even the most cynical resident.

From daily “table of knowledge” meeting in broad daylight outside a beachside “cafe”, to special assignments of project assessments to ensure the bad eggs could operate with official cover but no oversight, and then finally the dirty money and sex that bound the whole thing together, the whole thing was an epic and embarrassing drama carried extensively by the national media. The effect was to reinforce a reputation of the city as being full to the brim of the kind of sketchy, moronic mafioso that outsiders already associated the place with.

It felt like a body blow, and undid any achievements of the “image campaign” from outside the city. Trying to run a business with clients in Sydney and Canberra from Wollongong was nigh-on impossible – the entire city was tarred with the brush of these corrupt criminals.

Following the ICAC investigation, the city thankfully got the cleanout and fresh start it desperately needed from a governance and leadership perspective. All of the Councillors were sacked and replaced by administrators from outside the region. A new General Manager was appointed, and the newly instated rules around projects that came out of the City Centre Revitalization Strategy (and other improvements outside the city centre) gave the defined planning rules their first real upgrade in decades, clearing the path for a series of new projects not facilitated by case-by-case deal making.

On the economic front, changes in the costs of finance meant barely viable projects approved under the old regime (Belmorgan anyone?) started biting the dust before they’d done much more than acquire and consolidate land parcels.

The Great GPT Gamble

In an incredibly fortunate piece of great timing, the city’s largest property developer/operator, the listed GPT Property Group, had to make a decision about dramatically upgrading their shopping precinct in the city. One of the big hold-ups of such a decision – budgeted at $200 million – was whether competitive developments were going to spring up leading to an oversupply in large format retail and entertainment space – no one wants an expensive white elephant. With the looming financial crisis sinking competitive projects like the Dwyers site redevelopment, GPT had the balance sheet and access to funds to back the massive new Crown Central development.

In one of the most critical decisions for the city in many years, and with a freshly cleaned out council executive overseen by outsiders with a focus on pragmatism over parochial politics, the massive project to remake 15% of the city core in one go was approved by the GPT board in Melbourne in 2010. Two years after it had been approved by Council but put on ice by GPT because of the financial crisis, the project was now a go. The decision was even more brave given what happened 12 months later: the steelworks shut down its export business and lost another 1000 jobs.

At the time of GPTs decision (late 2010), it really wasn’t clear (in my mind at least) what the significance of the project to the city would be. With the move to online shopping, and regional centres with closer proximity to suburbs and easier parking getting $300 million dollar injections at the same time, focusing more of the city on retail seemed questionable at best. Thankfully though, GPT’s focus was as much on hospitality and entertainment as retail – a massive win for livability in the city.

When combined with the City tearing out of the disgraceful “bird cage”, the crapitheatre and a lot of the seating in the old mall (city tested, bogan/junkie approved) these two parts of the vision from 2005 have come together to dramatically reshape the city.

Similarly, a number of residential projects – with ground-level retail/restaurant activation – have taken advantage of the new “baked in” development rights from the 2006 vision’s upgrade to the planning codes has created a boom in inner-city residential development; today we see thousands of people actually living in the city core, giving it life after dark, a trend that shows no sign of slowing down.

Of course, both projects have taken their time, and it is only now in 2015 that the dividends are really paying off. These dividends – more competition, more choices, more quality, more food/cafes, less straight retail – are self-evident for anyone, but it is the change in the city culture and vibe that has the most appeal and makes me most excited.

More Buskers & Baristas and Less Bogans

By the start of 2015, the transformation was clear for anyone to see, and it was awesome.

From a practical point of view, the addition of Coles to the city centre has made it much more convenient to get stuff for the office or wander over at lunch time to grab some groceries for dinner – working in the city centre is now really really desirable.

But while utilities like Coles and Target help with convenience, it is the proliferation of places to eat and drink (combined with the new small-bar laws creating establishments you can go to without a real fear of being punched or glassed by an aggressive bogan) that has really made the difference.

The city centre is now a place you want to be.

On Thursday night I walked through the western end of the mall, and you could have knocked me over with a feather. A dozen or more of the city’s better restaurants had shown up and created pop-up take away dining experiences – for my American friends, imagine food trucks without the need for big trucks. The city was absolutely buzzing, with a singer-guitarist putting on a show, and in other parts of the mall there were other talented buskers doing their thing. The experience repeated (with differences in vendors) on Friday with the popular farmer’s markets through the mall. Walking through the stores was great too: there were plenty of shoppers; the place was packed. People were smiling and enjoying being together with strangers in a public space.

The differences to a similar shopping experience from a few years earlier couldn’t have been more stark. On a normal Thursday night at 7pm, the mall would be full of hood-rats who’d come in on the train as packs and acting like wannabe-gangbangers, sitting around, leering and screaming at each other across the mall. No one was happy – it was the depression and darkness of the city’s psyche manifest in hundreds of bogans and junkies just existing. Early in the evening they generally kept to themselves, but by 10pm the mall became a fairly dangerous place to be, with numerous bashings occurring almost every weekend (see video above).

The best thing about the changes in the centre of the city over the last few years is the effect it has had on social norms. Now there’s more buskers, baristas and cocktail barmen in the city centre than bogans yelling “fark off ya caaaant” while they suck back another pack of Winfield Blues. This doesn’t mean the city isn’t open, welcome and inclusive – it just means that expectations of behaviour and a default attitude is now a positive, aspirational and friendly one rather than a dark dog-eat-dog mindset of the depressed and despondent.

A sense of community has returned – and it is wonderful.

The Reinforcing Loop

The great thing about this amazing transformation is that is creates a positive feedback loop. With the city centre being enjoyable (for the first time in my life at least), people who visit will visit more often. They’ll look to rent or buy apartments in the city (rather than fearing the occasional necessary visit), and spend even more time in the city.

With more regular people enjoying the city each day/week, the social attitude of the city is changing. Bogans become just another part of the city’s colourful tapestry rather than the dominant negative force dragging the place down and scaring other people away.

People want to be in Wollongong, which brings more people who aren’t in the depressed and disadvantaged category, which normalises the mix of the city and lifts the experience for everyone (including the bogans, and more importantly their kids who stand a better chance of breaking the intergenerational welfare/poverty cycle if they see things and people they’d like to emulate).

This means as more people visit or move to the city (and the University brings in over 10,000 new non-bogan people every year) and really, truly enjoy being there, they stay and bring their friends in too. Instead of an “Image Campaign” telling stories of barely evident aspirations through an inadequate marketing budget, the city starts marketing itself through the tens of thousands of people who now truly do love the place.

With these people come the opportunities for more jobs and higher incomes in the city. Attempts to bring in outside employers to create jobs were usually doomed to fail by the fact that no-one from outside Wollongong really wanted to move here, something that is rapidly being solved. Additionally, a vibrant and enjoyable city means more young people graduating university are likely to hang around and try to create their own jobs through entrepreneurial ventures – Wollongong’s lower cost of living, proximity to Sydney Airport and plentiful supply of smart people coming out of the University makes it a very legitimate place to start a global venture – AffinityLive is testament to that.

While only a small and anecdotal statistic, more than half of our new hires this year are people who want to come back to Wollongong from Sydney or Melbourne – not because they have a sense of obligation to be close to aging family members, but because life in all its dimensions is so much better than dealing with Sydney’s “let’s stop trying to make the city better now the Olympics is over” traffic and transport disasters.

For the first time in my life, my home town is actually on the front foot and you can feel the city is finally on track to realize its incredible potential.

The Future

Thinking about the future, the main thing is to keep doing more of the same. This means more buildings and development, particularly in the city centre, with higher densities and heights so new housing supply is as affordable as possible and ensures these new investments in making the city livable – which depend on shoppers, diners and guests to succeed financially – have the number of patrons they need to flourish.

Similarly, the success of the Wollongong city core can and should be replicated across other regional cities. Thirroul, Corrimal, Figtree, Dapto and Port Kembla would do well to follow the lead of Wollongong City: setting clear, generous rules around building heights and densities to encourage more people to actually live, rather than occasionally shop, in them.

There’s also a number of parts of the city that have been left out of the revitalization so far, rotting and decaying. The prime example that comes to mind is Wollongong Harbour. With its sorry and barely-used fishing fleet, asbestos filled shed on the central pier, this generally under-used and under-loved focal point of the city has a lot of potential. Some work that I was involved in in 2009 outlined some ideas about unlocking the potential of this amazing space, included in the Wollongong Harbour Consultative Committee Report – it would be awesome to see the same renewal we’ve seen in the city centre happen here.

Of course, encouraging building and residential development is all well and good, but people still need to be able to find and keep quality jobs.

Part of this will come organically as the city continues to be more desirable as a place to live, visit and thus work and companies come to the city because of the talented people here, not because of a supply of cheap, unskilled and unemployed labour.

Another part of it will happen through startups and entrepreneurial effort creating new opportunities from the city, for its residents, with customers predominantly from outside the region – hooking onto the success stories we have and investing in the next wave of entrepreneurs will also be critical to success.

Conclusion

The city has a long way to go to realize its potential, but the most exciting thing is that it seems well on the way to achieving it, underpinned by strong fundamentals of strong human capital and a great living environment (in both the built and natural form).

If we can just keep this momentum going and rightly celebrate our successes so far, this current phase of “the brightest the city has ever been” will be a phase we look back on and smile as only the beginning.

UOW Occasional Address – It's what you do with it that counts

Introduction

Today is one of the days you’ll remember for the rest of your life.

It might be because you feel proud – it is the culmination of thousands of hours work and study.

It might be because you feel relieved – no more cramming for exams and assignments at the last minute.

It might be because you feel dominant – after countless hours of swearing and rage you’ve managed to beat the compiler and debugger enough to graduate!

It might be because you feel appreciative – for the amount of support you’ve received from teachers, parents and friends over many years, efforts that you might not have appreciated at the time when you were stressed about an exam or an assignment.

It is probably all of these reasons, and more – this is a special day for you all (and sometimes more so for the parents and friends up the back).

Given this is such a special day, when you get a call from the VC and you’re asked to give the Occasional Address, you naturally want to make it to be good.

You think back to the great addresses given at occasions like this by people like Steve Jobs, Theodore Roosevelt and Nelson Mandela.

You naturally think, “Hey, I should try and impart some wisdom and amazing advice,” and then you realize there’s a little problem.

I’m less than 10 years older than the average age of the graduands here. I don’t have enough grey hair yet to have any wisdom to impart.

It gets worse though. I’m an Informatics drop out. I’m never got to sit in your seat as an Informatics graduate.

What legitimacy do I have to fill you full of advice about what to do now you’ve graduated?

Damn, so we’ve got a bit of a problem.

So, rather than vainly try and fill you with wisdom I don’t have, coming from a drop-out without legitimacy, I thought instead it might be more valuable for you to share a few stories and lessons learned, and then I want to do something a little unorthodox – I want to throw thrown down a challenge to each and every one of you.

That’s right. A challenge.

If you only take away one thing from my talk today, I want you to remember this: it isn’t where you’ve been, what you’d done or what you’ve got: it’s what you do with it that counts.

What I want to do today is challenge you in what you do with what you’ve got. I’ve got three stories to share with you today – one that might help see how to work with what you’ve got, one about the perspective you should have, and one that is about why you should do it, rather than talk about it.

Find something you want to work hard, be passionate and get better at

As I mentioned before, I’m a drop out. It was early 2000, and the whole world was crazy. The internet was changing everything, or so they said. I’d been dabbling as a freelance web developer to make some extra money to spend on beer, back in the days when that meant writing code first, and making things pretty and usable second. The minority of Australian households with internet connections all used modems, and frankly, the quality of web design sucked.

So, in early 2000, I dropped out of uni, quit my job at the Novotel, and moved out of home, all in the course of a couple of months. I registered my company, Internetrix on the 10th of April 2000, and within a week, the Nasdaq crashed.

The dot com bubble burst, and I’d just staked my ability to survive on an industry that was just taken around the back of the shed and shot.

As you can imagine, this situation presented a few challenges. So how was I able to grow from Internetrix from a one-man-band into an award winning company, recognised as a partner by companies like Google, with clients in the US, Japan, China and of course here in Australia?

In short, there were three things – work hard, be passionate and never stand still.

Selling thousands of dollars of IT services to businesses when you’re a 20 year old with no track record is bloody hard. When they’re small businesses, it is harder. When they’re small businesses in Wollongong, it is almost impossible.

If keeping a fledgling business going wasn’t hard enough, the government introduced the GST when I was only 3 months in; I had to learn accounting and tax, and quickly, since I couldn’t afford an accountant.

And being young meant I was easy prey for bad actors – between being ripped off and having people threaten to sue me I had to learn quickly how to survive in the jungle.

It was frigging hard work, but thankfully I didn’t have the temptation of a cushy graduate position as an alternative of making it work.

This could have been because I wasn’t a graduate – I’d dropped out. But it wasn’t.

This could have been because the whole industry had just exploded and no one was hiring IT people, especially drop-outs with very little experience.

But it wasn’t.

I pushed through without the temptation to do anything else because I’d been bitten by the startup bug – the freedom and excitement of creating something out of nothing was just too intoxicating for any mere job to ever be enough after that.

I didn’t start Internetrix to get rich. I started Internetrix because I had a believed that the internet was indeed transformative.

I also believed that your average business they had been doing it wrong – they spent money on a website without knowing why, and how the investment was going to pay off.

From the beginning, had a passion for building a startup that helped clients get a positive return on their online investment – this passion put my business on a good footing, and I was able to develop long term relationships with clients that allowed my business to grow.

But this energy for hard work and passion to throw yourself at something isn’t enough – in our industry, you have to have a hunger to keep learning. Things change so incredibly fast. You need to be constantly reading, experimenting, learning, hacking and tinkering.

It is only by being at the top of your game that you can combine your willingness to work hard, with your passion for the field, and know when you stand in front of a client, a colleague and a new hire that you have what it takes. IT is a meritocracy, without the baggage of other professions, so you’ve always got to be willing and able to bring the best to any occasion. Cramming won’t do it. You need to be continually training, and if you’re working in a field that you don’t care about, that you’re not passionate enough to read about in your spare time, do something else.

So, what’s the lessons here? Since what matters from here is what you do with what you’ve got, make sure you’re prepared to work hard, be passionate and stop improving at what you’re doing. If you’re not, you should do something else.

Play on a World Stage

In mid January 2006 I found myself in the Hard Rock Casino in Las Vegas  as a guest of the owners of MySpace, which at the time being was the world’s 4th most trafficked web property. Later that week I was pitching to the world’s most respected venture capital firms, the people who’d make the initial investments in Google, Yahoo, EA, Facebook and many other household names.

I spent three months living at the home of Mike Arrington, the founder and editor of Techcrunch.

This all happened because I co-founded a company, Omnidrive, with a fellow uni dropout, Nik Cubrilovic in mid 2005. If you’ve used Dropbox, you’ve got a good idea of what we were building – cloud based storage with clever sync technology between multiple devices. And while our business failed (and Dropbox just raised a round of capital on a $1B valuation), the crazy roller-coaster experience was one of the most valuable things I’ve ever done.

Thrust into the limelight of Silicon Valley and playing the startup game at the time Facebook was just getting going was an amazing experience, not for what I learned about business, fundraising or the industry, but because of what I learned about myself.

Driving down Highway 101 through the heart of Silicon Valley, you see the headquarters of companies like Oracle, Yahoo and Google. Seeing these buildings, and realizing they were real places, with real people working there, people just like you and I, was paradigm shifting.

When it comes to technology, Silicon Valley is unquestionably the top level the world stage. It is where the best in the world compete and define technology worldwide. One night I was lucky enough to have dinner with Marc Andreessen, the founder of Netscape, because a friend of a friend made an introduction and he was free and keen to find out about what we were doing. It is just that kind of place.

While initially feeling very inadequate and out of my depth, it didn’t take too many meetings with VCs, too many conversations with entrepreneurs at dinners and beers with senior engineers from places like Yahoo and Google at parties to start to realize that I had what it took to go toe to toe at this top tier game.

And it wasn’t anything special about me. I was an average student. To this day, my staff would ban me from all hacking and meddling if they could. And yet, as time went by, I got the sense I wasn’t out of my depth.

I thought about the dozens, if not hundreds of tech people I’d work closely with in Australia over the years, and realized that they could also hold themselves in this, the beating heart of technology globally, and could honestly regard themselves as being world class. The distance between Wollongong and San Francisco might be great, but the difference in calibre of technologist wasn’t nearly as great as I’d imagined.

The University of Wollongong has one of the best IT programs in Australia, and so what I’m saying is that you have what it takes to go toe to toe with the best in the world too.

Two UOW alumni who aren’t that far ahead of you – and one of whom was sitting unemployed on North Wollongong beach in January – have built a startup in the last 6  months. After going to Silicon Valley a couple of months ago, they are now in acquisition discussions with some of the biggest names in technology fighting over them.

These guys are just like you, and if they can do it, so can you. Why shouldn’t you be the next Steve Jobs, Bill Gates or Mark Zuckerberg? Seriously.

So, what’s the lesson here? When it comes to thinking about what you’re doing to do with what you’ve got, make sure you’re mindset is to be world class and play on the world stage.

Be the man in the arena

This last story is not my own, so it is probably the most important of three stories I’m going to tell today.

Theodore Roosevelt was the 26th President of the United States, and when he became President in 1901 at age 42, he was the youngest man ever to do so. Widely regarded as one of the best Presidents in US history, Teddy was invited to give a speech at an occasion like this at Sorbone University in Paris, one of the world’s oldest Universities, established in the 12th Century.

In his speech, he reflected on the temptation among the learned and privileged scholars and academics before him to become commentators, critics and cynics. He cautioned against this, and delivered some of the most stirring words I’ve ever read:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

There is little use for the being whose tepid soul knows nothing of great and generous emotion, of the high pride, the stern belief, the lofty enthusiasm, of the men who quell the storm and ride the thunder. Well for these men if they succeed; well also, though not so well, if they fail, given only that they have nobly ventured, and have put forth all their heart and strength.

When it comes to rising to the challenge of what we’re all going to do with our education, our skills, our lives, I believe this message is the most important. As President Roosevelt says elsewhere in this same speech, “To you and your kind much has been given, and from you much should be expected”.

As Informatics graduates, you have more power, more opportunity to change the world, than any other group in the history of mankind. I mean that. Think through history, and think about the forces that are going to drive, enable and facilitate the future of our world more than any others. Technology is common to all of them, for good or for evil.

Just take a moment and reflect – today, there are now more than a billion people online, and if you throw in mobile phones there are billions more.

We’ve seen how technology has changed the world in Egypt, Tunisia and other parts of the middle east in the last few months.

Closer to home, the opportunities to change healthcare, education, how we live, how we work, and more are vast. We’re only three or four decades into the information revolution – even if we accept the pace of change now is much faster, compared to previous revolutions – industrial, bronze, etc – we’re surely now in little more than the first early rays of a new dawn.

I believe we all have the power, the opportunity and the responsibility. But, to make a change, to make a difference, you have to be in the arena.

So, how can you get into the arena?

Of course, I have a natural bias towards seeing the arena as being a part of a startup. You put it all on the line, and even if you fail you still learn so much more than you would working for a bank or the government in a graduate role. There has never been a better time to do a technology startup – thanks to cloud services the costs of getting going are lower than they’ve ever been, and with a mature web audience of over a billion people, and app stores and the like making distribution and payments easier than ever before, I’d encourage all of you to keep the idea of doing a startup in the back of your mind.

But, being the man in the arena doesn’t just mean doing a startup. It can mean passionately advocating for change and improvement in a workplace. Or using your technology skills to help a cause you’re passionate about. Whatever you choose, the key is to both avoid the temptation to just throw rocks or criticism and cynicism from the stands, and show the courage to get down into the arena.

So, when answering the challenge of what are you going to do with what you’ve got, make sure whatever your doing, you’re doing it in the arena, for that’s the only place that matters.

Conclusion

From here, you’ll follow many different paths, across careers, across the world.

You should take this time to reflect and look back with pride on what you’ve achieved – enjoy this moment and the sense of achievement that rightly comes with it.

But also realize that from here, it isn’t what you’ve done to get here that matters – it is what you do with it that counts.

When it comes to choosing your challenge, work hard, be passionate and always keep getting better.

When it comes to framing your challenge, be world class and don’t be afraid to play on a world stage.

When it comes to how you tackle your challenge, remember to always be in the arena, fighting to succeed but not afraid to fail.

Good luck and I wish you all the best in rising to the challenge of doing something amazing with what you’ve got.

Wollongong is on a burning platform

Over the last couple of years, I’ve been getting increasingly concerned about the future of our city. Leaving aside the rot exposed through the ICAC investigation, I’ve been mostly worried the future of the city from an economic perspective.

Are we going to be a place where our young people can build careers & families with confidence and a sense of optimistic opportunity?

Or are we going to increasingly be a hollowed out city, with a population that in large part commutes to Sydney for work, or lives off Centrelink, or comes here to to retire?

Are we going to be proud and strong, or are we going to be like Tasmania – a small backwater that everyone looks down upon and only survives because they suck in taxes paid by the rest of Australia living in large part off handouts?

My worries about the future of our city have grown even more acute over the last few months.

Our city has operated with a bit of a handicap in all 31 years I’ve lived here – the downsizing at the steelworks and in the broader manufacturing sector has been playing out since the 1970’s. But while we’ve stoically pushed forward over the years, I’m concerned that rather than just the disappointment of unfulfilled potential that we’ve learned to live with, we’re actually facing some very serious challenges that could threaten the viability of our city.

Our Two Fires – Carbon Pricing & Dutch Disease

In the short to medium term, there are two external forces, more than any others, that are affecting Australia’s entire economy.

The first is the transition to a carbon constrained economy, and while there might be debate around the details and timing of a carbon price, I think most people accept that reducing global dependence on carbon (ie, coal) as an energy source is inevitable.

The second, and much more important and threatening issue in my view, is Dutch Disease, the situation where a high currency value because of exports in one part of the economy – in our case, the mining/resources boom centred around WA – makes it almost impossible for exporters in other parts of the economy to compete.

While Carbon Pricing and Dutch Disease are having a negative economic impact in lots of communities around Australia, there are few, if any, that are threatened as much as our city and region.

In a message to all his staff earlier this year, new Nokia CEO Stephen Elop told a story that I think has strong parallels to the situation our city is currently facing:

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

I believe our city too is standing on a burning platform.

Examples of our industrial decline

Lets have a look at an example, in the form of Bluescope, the region’s largest employer and also responsible for tens of thousands of related and multiplied jobs.

Bluescipe recorded revenue of $4.75B in their Coated & Industrial Products Division (which is pretty much all of Port Kembla), down over 20% from over $6B in sales two years earlier (2008). And this is just sales – during this period, raw material costs went up, and the Australian dollar increased in value by more than 70% since late 2008. This exchange rate movement – the Dutch Disease in action – has made every person on payroll, every megawatt of electricity and other AUD expenses 72% higher now than their international competitors, assuming no increases in wages, power costs and the like.

Little wonder then that Bluescope experienced a drop in profit of 85% between 2008 and 2010 (and in the GFC and the 2nd half of 2009 they actually made sizable losses). While today’s announcement of an additional $300M in industry assistance for the steel sector (read Bluescope and OneSteel) will make some people in the city feel comfortable (and it isn’t tied to the carbon tax legislation, so the Greens would have to support it – good luck with that), $300M isn’t a lot of money compared to the $1.25B per year in revenue that Port Kembla is down compared to 2008. Even a government, with all the resources of treasury, can’t compete with global market fundamentals – just ask George Soros, the man who broke the Bank of England in September 1992.

BSL.AX - no wonder the share price is down 90%

 

There have been lots of other examples where trade exposed employers in our region have become extinct. We’ll all remember the closing of the Bonds factories in the area last year, the latest in a long line of shutdowns and mass layoffs which in previous years have included brands like Midford, and even more recently, locally owned Poppets. Unfortunately, the ledger is stacked with much more bad news than good on this score.

When it comes to our traditional economic base, our city has been lurching from one crisis to the next, while the rest of the world passes us by. It doesn’t have to be this way.

Recognition, leadership & vision

Facing up to these challenges requires an honest debate, strong leaders and the willingness for our community to come together, face facts, make some tough decisions and put in place a plan to change our economic base.

So, is there a frank debate about these issues at the moment? Are our leaders – both incumbents as well as aspirants – speaking out, being honest, and putting forward a plan? Let’s have a closer look.

Local Government

Our city is going to the polls in just 7 weeks time. I’ve been following the news as more people throw their hat into the ring, and I’ve been really hoping to hear someone out there talk about the elephant in the room.

But, alas, all I’m seeing is an empty and meaningless debate about which group of candidates is going to have better consultation and more inclusive government than the next.

What of debating the big issues, like the future of our city?

On the whole, the candidates have been silent about this, and those that are making noises about anything of substance are currently running on platforms made of platitudes that few would argue with, but which on their own are utterly meaningless.

Sure, you could argue local government is roads, rates and rubbish. I disagree – a strong Mayor and City Hall can act as a very effective leadership and lobbying force with the levels of government that actually have power, not chains – but that raises the question – where are our State and Federal representatives on this?

State & Federal Government

I’m heartened that the State and Federal members I’ve talked to about our burning platform situation are very aware of the issues. My sense from talking to them is that they see the same bleak future if we keep doing what we’re doing. The problem is, changing the nature of an economy isn’t easy, cheap or quick.

Unfortunately, they’re not out in front on the debate, and while I’m disappointed, I can also understand why.

If I was Sharon Bird, Stephen Jones or Ryan Park, I wouldn’t want to come out and scare the horses unless I had a plan to turn fear into hope. To bring up this issue without knowing you can get the support of your caucus and the treasury to make the investments to do something about it would be what Sir Humphrey would call “courageous”.

Sharon, Stephen and Ryan are worldly and smart; while some of the crazier voices in our public life might suggest fixing the exchange rate, putting up tariffs and other failed policies to provide the perception of short-term relief, our members know that going back to the “good old days” isn’t possible without a flux capacitor and a Delorian.

When it comes to bold initiatives and investing in action to transition our regional economy, our members are also hamstrung, even if they have a plan. Our safe seat status at state and federal levels of government means that our members will always struggle to get attention from the party and concessions from Treasury, and the safe seat status owes a lot of the current economic makeup of the city, which doesn’t help create the motivation for change either.

Starting a debate

Our city has been making a gradual transition over the last few decades, but the size and speed of the threats – the intensity of the fire burning under our platform – is stronger than ever before. The Finance and Insurance sector – thanks to the likes of the IMB, Community Alliance Credit Union (formerly Illawarra Credit Union), Oasis Asset Management (now known as a division of ANZ and known as OnePath) – is now the largest employer in the region, and Greg Binskin and the team at Tourism Wollongong have consistently gotten in front and espoused a vision for a strong tourism sector in the region which they’re making a reality with dogged determination.

But, to be honest, what we’ve really got here is a number of disparate actors working to improve the fortunes of the city through their own actions – what we don’t have is any real leadership, debate of vision for the future of the city, which our community can participate in and get behind.

This is a real shame, and while we continue to be mute and complacent, we ensure that by doing what we’ve always been doing, we’re going to keep getting what we’ve always been getting.

Learning from others – a tale of three cities

We’re not the first community in the world to face serious challenges like this – I’ve researched three examples which we can look at as proxies for our situation, so we can learn from their mistakes and successes. There’s a lot we can take away from the way others have faced and overcome the same adversity and threats we’re facing now. Here’s a little information about these three cities below.

  • Sheffield in England suffered for decades as the pain of the loss of their manufacturing and industrial economy in the 1970’s led to widespread unemployment and a contraction in their city and population, and have only just started turning things around.
  • Detroit, a cautionary tale, is still suffering and shows no real sign of improvement on the horizon.
  • Waterloo in Canada, saw the writing on the wall and transitioned their industry very very successfully before they declined, creating a really smooth transition and a great success story.

Sheffield – an industrial twin

The first proxy city to our own is Sheffield. The home of British Steelmaking, Sheffield saw a 10 fold increase in its population in the 1800’s through the industrial revolution, however when international competition on its inefficient sector took its toll from the 1970’s, Sheffield saw its population decline markedly (down over 7% in the 10 years to 1981, and negative each other post-war decade until the last few years).  Anyone who’s seen The Full Monty, set in Sheffield (1997), will have a feel for the bad times that city has seen.

Sheffield has since invested in developing its higher value business services sector, and while accepting the lower job contribution made by the manufacturing sector compared to days gone by, a focus on technology and real innovation has helped to bring prosperity back to manufacturing in this natural cross-roads in the middle of Britain.

None of it would have been possible without a strong, coordinated plan and commitment of various stakeholders – for more information, have a look at this excellent case study on how Sheffield is becoming a knowledge region. For specifics on how their regional governments are working together with detailed plans, check out the “Moving Forward: the Northern Way” website and plans.

Detroit – a cautionary tale

Detroit. Motown. The City of Detroit, which used to be the 5th largest city in the United States, has now shrunk to be 18th, with a population of around three quarters of a million. Only New Orleans has gone backwards further, and Detroit can’t blame a hurricane for its woes – Detroit’s failings are all man made.

The home of the American automotive industry, Detroit has been in decline since the 1980’s. As the Economist details:

Employment has fallen every year since 2000. Even as the carmakers recover, they will not resume their role as guarantors of middle-class prosperity. State leaders have struggled to respond to structural shifts. Unfortunately, rather than reform a collapsing revenue system, they have passed short-term fixes. Attempts to reinvent Michigan have moved fitfully. Grants for college students did little to encourage them to stay after graduation. Tax credits for green manufacturing industries may create too few jobs at too great a cost, according to Don Grimes, an economist at the University of Michigan.

Detroit is what happens when a city faces a series of structural challenges and threats that are as certain as gravity, and then put their head in the sand. The city levies an additional 2.5% income tax on its citizens – this was probably a good idea when the city was prosperous, but now it is a massive disincentive for anyone to live there, especially given its high levels of crime and general decay. Some statistics show their unemployment rates falling, but the reality is, people are leaving the city and its surrounding counties by the hundreds of thousands. Perhaps there is a future for a smaller Detroit, but $50B in Federal bailouts for the 3 big US auto-makers in the GFC seems like it might not have been the best investment that could have been made.

Another American city that I have done a bit of research on is Pittsburgh, the former home of the American steel industry. Pittsburgh has seen a dramatic downturn in its own steel industry, and while their ability to cultivate a high tech and startup sector looks really promising, it is still in many ways early days – the City is still losing around 10% of its population each decade, and has been since the 1960’s. Hopefully, Pittsburgh can achieve the same sort of success as Waterloo, below.

Waterloo – our Canadian doppelgänger

The town of Waterloo, Ontario, has got to be the closest thing Wollongong has to an international twin.

  • Waterloo is around 100KM from the largest city in Canada, Toronto, their equivalent of Sydney. Wollongong is 83KM from Sydney.
  • The population of the City of Waterloo is around 100,000 people and the population of the region Waterloo is centred in is around 492,000 people. Wollongong, Shellharbour and Kiama LGAs combined have around 300,000 people, with another 150,000 if you include Wollondilly and the Shoalhaven LGA’s, giving an Illawarra total of 450,000.
  • Waterloo has a strong and internationally renowned university, the University of Waterloo, which is actively engaged in their city. In addition to being a significant employer in the city, the University of Wollongong is increasingly taking a leadership role in helping to shape the future of our city (such as through the Innovation Campus).
  • Waterloo has historically been an industrial town, with strength in tanning and rubber. In the 1980’s the industry suffered a downturn, related to headwinds in their main downstream market, Detroit, and thousands of jobs were lost. From the 1970’s, the Illawarra region has suffered similar frequent retrenchments and large rounds of layoffs in from industrial sectors.

What sets our two cities apart, however, is what Waterloo did the face of its own structural change. Instead of grinning and bearing its fate, a number of civic leaders got together and decided to try and build a new, emerging industry to take up the slack.

The outcome of this effort, which recognised the opportunities an innovative and engaged University could provide when combined with relatively close proximity to the financial capital of the country, has been nothing short of amazing. The City started focusing on technology, and they managed to grow their industry from a total revenue of C$300M in 1997 to over C$19B (yes, B as in billion!) in 2007. The best known product of Waterloo’s success is undoubtedly Research In Motion, the company behind the successful Blackberry mobile phone.

After spending a week with Tim Ellis, Chief Operating Officer of the Accelerator Centre in Waterloo earlier this year, I’ve gotten a much deeper appreciation of what they’ve been able to do, and I’m firmly of the opinion that we can do something similar here in the Illawarra. The University of Wollongong has signed an MoU with the University of Waterloo – I expect many more beneficial things to come out of these two institutions cooperating.

One part of a vision for our future – creative, high tech & very liveable

I believe our city needs to take strong action to deliberately re-shape our economy if we want to be more than God’s waiting room, a bogan backwater and a place for exhausted commuters to sleep each day.

However, the isn’t a single silver bullet, and there isn’t one industry or sector alone that is going to change everything for us and make for a better, sustainable future.

I do believe, however, that the creative sector, particularly backed by technology, can play a very important part in helping to change the fabric of our city and its economy for the better.

In my recent post on the 5 Pillars of Tech, I reflected on the nature of the IT industry in our city, and put forward a case where a Startup led technology sector could have a massive and positive difference in the future of our city:

A technology Startup is product focused. They’re often developing software, and although hardware is still possibly, it is at least an order of magnitude harder to do, and it requires a lot more capital than you can usually find in Australia. Being software product focused makes you very capital efficient – no need for plant, equipment; just people and ideas and the odd laptop or two.

A technology Startup is globally oriented – they might not be selling internationally, and their first 4 clients might be companies who share the same building as them, but generally speaking, a startup is trying to solve a niche problem in a new way for a global market.

By being product focused, often software-based with a zero marginal cost of production, a technology Startup is also highly scalable. With more than a billion people online now, and the growth in smartphones and their associate app marketplaces, distribution has never been easier or less tied to your geographic location. In this sense, being a city of a quarter of a million, in country with only 22 million (which makes us a flea on the back of a Chihuahua riding on an Frigate – I’ve done the maths, and these are honestly the right ratios) doesn’t have to be a critical disadvantage.

As a foundation investor and mentor in StartMate, and the founder of two technology companies that now employ 16 staff, I’ve seen first hand how powerful and catalytic the Startup sector can be for the wider economy. Also from my 5 Pillars post:

When it comes to the role that Startups can play in contributing to the economy of the region, the best thing about them is that they’re easy to start, they harness the things we have – smart people, lowish costs of living – and their development and cultivation is within our control.

They’re also great job creators – 20 companies with 10 staff creates the same opportunities of one large company imported into the region – and even if these startups fail, the experiences, lessons and skills developed by getting out there and doing it are incredibly valuable, whether the founders choose to do another startup, or join the ranks of the other technology sectors.

I’ve recently come back from spending a month in San Francisco, which for those who don’t know is the “captial” of Silicon Valley. Part of the time I spent there involved talking to investors, and many of them were asking about where we’re based, and whether we’d move the team to Silicon Valley if they invested in us. I told them, no, are you crazy? Why would I do that? They asked for details about what made Wollongong a great place to grow a startup, so I told them the following things:

  • Talent – the University of Wollongong produces 1 in 7 technology graduates in Australia. In Silicon Valley right now you can’t hire an engineer for love nor money – I’ve never seen a war for talent like it. Just telling prospective investors the graduate statistic was enough to get them asking how they might be able to look at helping the companies they’ve already invested in – who can’t hire good technology engineers – to come to Wollongong.
  • Stability – Wollongong is an absolutely beautiful place to live. Knowledge workers can base themselves anywhere now the world is flat – having a team based in Wollongong is great for the team, and great for the business too. I heard from large multi-national employer in the region that they experience staff turnover of 5%, whereas their Sydney office, which in every other way is identical, faces 50% turnover a year. Even without factoring in soft-costs like the cost to the business of losing all that knowledge each year, the hard recruiting and training costs for this kind of turnover they’re seeing in their Sydney office are crippling, and makes Wollongong a much better place to be.
  • Diversity – if the world is flat, it is also now increasingly online. There are billions of internet users, and we’re not far from having more mobile phones than people on the planet. What isn’t changing any time soon though are the needs to speak the language and be connected and comfortable with the culture of your markets, which are increasingly Asian based. Our time zone, our strong cultural diversity and the language skills that that brings us are not insignificant, and I think they’re almost always underrated. My team today includes three people from China, one Canadian, an American, a Kiwi by birth, and doesn’t include the English, Vietnamese, Irish and other cultural heritage we all bring to the table.
  • Proximity – we’re an hour from the commercial capital and largest city in Australia. We’re even closer to our main international airport, and then an easy flight to almost anywhere in the world. We’re on the a growth time zone – Asia – for the first time in our country’s history. But we’re still small enough so that more than half of my staff walk to work each day. Less time commuting to work, markets, investors and clients means more time to spend either building a world-class company, or enjoying life with our family and friends.

For these and a litany of other reasons, I think Wollongong stands a great chance of becoming a technology and startup powerhouse, in much the same way that Waterlook in Canada has become a powerhouse on a global stage and reinvented their economy at the same time.

So, how do we make it happen?

Next Steps

The most important next step for all of us is to start to raise the alarm. Unless our city wakes from its slumber to realise the platform it is dozing on is on fire, we’re going to end up like Detroit – so hollowed out, broken and depressed that things will get better only because they really can’t get any worse. If we waken the community now, and start an honest debate about our future, we might be able to pull off a Waterloo; even if we fail, we won’t be any further behind than we are now.

To facilitate this, I’d love to see something similar to Melbourne’s Wheeler Centre here in Wollongong. Imagine something led by the Mercury, which makes use of our newly refurbished Town Hall, to facilitate the debate.

Let’s give our elected representatives some ammunition to take to Canberra and Macquaire St.

Let’s learn from the successes of others. Action, cooperation and agility is much more important than a big overarching plan.

Let’s encourage the University to keep building its relationship with Waterloo so we can benefit from their experience.

Let’s look at ways to supercharge our new and emerging industries. Tourism, financial services, technology, education. We need to focus on the industries that grow the economic base and bring jobs, income and prosperity into the region. Health and Community services, which have grown a lot of the years deserve our appreciation, but they don’t grow the economic base – they exist only if the economic base can be taxed enough to pay for them. When it comes to technology, the closing comments in my 5 Pillars of Tech article provide a bit of a blueprint; I’m sure Greg Binskin can probably provide his own specific advice for the tourism industry.

Whatever we do though, we need to remember, if we want to keep getting what we’ve been getting, we should keep doing what we’ve been doing. We need to do more. We need to do better.

We’ve got so much potential – to rob our children of the opportunity they deserve to have, and consign ourselves to the fate of a slowly decaying industrial town mired in depression, disadvantage and disappointment for merely a lack of action is just not good enough.

Screwed by United's Sydney Ground Staff

I’ve just gotten into San Francisco for a few weeks of business related travel, after my direct, 14 hour flight turned into a three leg, 4 stop, 24 hour mountain of hassle, caused by some very dodgy customer service based on laziness and deception and more than a little ineptitude. Here’s my letter of complaint to United.

To Whom It May Concern,

I am writing this letter of complaint today following some truly awful customer service experienced at the hands of what I can only describe as your uncaring Sydney ground staff. While it is widely acknowledged that your fleet and operation is much like a creaking, cumbersome, overweight old man who’s best days are well behind him, my experiences today at the hands of your staff stand out for their incredible level of dishonesty and lack of care, even at the hands of United.

The trouble began when I checked in early (at 12:32pm) – something I rarely do – and was told by 12:46pm Sydney time that my flight to San Francisco (UA-870) had been cancelled, and that we would have to be re-routed.

No details to the reason for cancellation were given.

When it was explained that my new route would be Sydney (SYD) > Auckland (AKL) > Los Angeles (LAX) > San Francisco (SFO), instead of my expected SYD > SFO direct, I asked whether it would be possible to be put onto United’s SYD > LAX direct service (UA 840), as the detour all that way to the south in Auckland, and the associated layover, was going to add quite some time to my journey.

I was then told that BOTH United flights out of Sydney, to both Los Angeles and San Francisco, were now cancelled, again without any explanation of why but with the impression the aircraft had gone unserviceable (US).

My first request: I would like to know what caused these flights to be cancelled in Sydney, as so far no one has been able to tell me why. To have all of the flights by the same carrier cancelled at the same time struck me as very strange indeed, and sounds more like bad management than bad luck.

After being given paperwork for the re-routing via Air New Zealand’s Pacific tour and checking my luggage and getting boarding passes from the Air New Zealand couter, I grabbed a bit of lunch and checked some emails before clearing Customs and making my way to the gate. My suspicions that something strange was going on was that I cleared customs alongside what looked like a full United Airlines crew, fully kitted up in uniform.

If both flights were cancelled, what were they doing here? Surely the crew wouldn’t be going home on another carrier in full uniform without their aircraft?

Then I saw the United Airlines girl from check-in who’d told me the flight had been cancelled – she was pushing a wheelchair for someone and when she saw me, the colour drained out of her face and she avoided eye contact like she had something to hide.

Once I got to the gate, at around 2:30pm, it became very clear I’d been misled. The United SYD>LAX direct service was indeed boarding, with the San Francisco flight passengers being told to come back after 3pm, as the gate lounge was shared and there wasn’t enough space there for 2x 747’s worth of passengers waiting to board.

Of course, my I was thinking why the hell are they boarding the LAX service now that was cancelled, and why are they asking people to come back after 3pm for the SFO service that I should have been on, but which I was told had been cancelled?

The staff at the entry to the gate were contract security, and as I didn’t have a UA boarding pass, they explained they could let me in to talk to someone from United, but they promised to go and get someone for me.

I thought when I got a chance to talk to someone from United, I could just get swapped back onto the original UA870 flight: with my SFO flight still over an hour away (15:45), if it had been reinstated, there would be time to get my bags back from AirNZ (which was boarding in about half an hour at the gate next door), and onto my planned flight, saving me the unnecessary detour around the Pacific with AirNZ?

While waiting to see someone from United – it took about 15 minutes – one of the guys, Alex, who was checking in around the same time to SFO, and who got routed similarly via AKL and LAX, wandered over. He was travelling to a conference with a few work colleagues, and he explained that a mate of his – who checked in about 15 minutes after us – was able to get onto our original flight, UA-870, SYD>SFO direct. Alex said he knew the time period between when the flight was cancelled and then uncancelled was short because he only had time to walk down to the money-change service at the end of the concourse after checking in with AirNZ before his friend walked over to meet him after checking in successfully with United on UA-870.

My second request: I would like to know why your staff couldn’t be bothered – with around 3 hours until our UA-870 departure – to page the handful of customers affected by your temporary flight cancellation, and arrange for us to come back and check in properly on the flights we’d booked? This sort of customer service is truly appalling, but unfortunately, it gets worse.

Now the United manager on the ground in Sydney came over to talk to us. It became quite clear early into the conversation that now the timing to make any changes was tight – the LAX flight was getting ready to board, and while my flight to SFO was still well over an hour away, the AirNZ flight was getting ready to board, and there were concerns that getting bags out from the AirNZ hold would delay that flight, something AirNZ wouldn’t want to do.

With the new knowledge that the flight was un-cancelled within a few minutes of us being redirected to AirNZ, and given short time frames was now our enemy, I also wanted to know why no-one had paged us back around 1pm when there was plenty of time.

Without getting any form of explanation on this, the United staff member promised us that if the AirNZ staff were able to get our bags out, they would transfer them and us across to the UA-870 flight to SFO, but that unfortunately it was in the hands of the AirNZ staff.

She made a call to the AirNZ manager downstairs, who she said had declined our request. “It’s a manpower issue” she explained, and we couldn’t blame AirNZ for not wanting to delay their own flight: it was United’s fault this was all being contemplated at the last minute…

It was now 2:55pm, and the AirNZ flight was boarding at 3pm.

When it came to the question of why they didn’t page us right back at the beginning and get us back onto the right flights – when there was plenty of time to sort out this baggage stuff – she basically admitted that they couldn’t be bothered to try and fix it. I then put it to her that they’d deliberately held back the information from us in the hope we wouldn’t find out that they couldn’t be bothered to deal with it and didn’t care that their unreliability meant a much longer and delayed journey, increasing the trip from 14 hours to over 21 hours (it turned out being around 24 hours in the end, with more United delays in LAX), and with two layovers instead of a direct service.

She then got defensive and told us that this was costing United money, and we should have felt incredibly grateful that we were leaving the country at all given the poor reliability of the United service.

After copping it on the chin for the time being and fuming at the ineptitude of these United clowns over the previous few hours, I joined the queue to board the NZ118 service to Auckland. The friendly staff were at the front doors of the aircraft and welcoming us aboard, asking us the usual “how are you today” questions. Of course, the answer at this point was very very dark and pissed off – I said something to the effect that “this probably isn’t the right time to be asking” with a wry smile.

The AirNZ Flight Service Manager, Anthony Mayer, was excellent, taking note of our situation and actually giving a damn and taking action, rather than making excuses for screwing people over and being too lazy to fix the problem like the United staff had done.

Anthony then pulled some strings with the ground crew, and within 10 minutes, he’d found the bags of myself and a few other passengers all in the same situation. At this point, UA-870 to SFO was still about 45 mins from boarding, and given the gates and aircraft were right next to each other, this should have allowed plenty of time to move our luggage and get onto the UA flight.

Given the promises the United lady had made in the gate some 10 minutes earlier – if AirNZ would/could find our luggage, then United would take it and we could be moved across to our original flight – we then understandably had the expectation that we’d be changing over to the direct flight.

Unfortunately, this wasn’t the case.

Once again, United customer service let us down, because while our luggage had been found and was ready to be off-loaded from the AirNZ flight, the United staff refused to take the luggage.

Once again, servicing your customers and making up for your mistakes was too hard.

My third request: I want to know why – with the aircraft next to each other, and my SFO flight still over an hour away from departure and no passengers even boarding it yet – my luggage and then I couldn’t be transferred across to my scheduled and much more convenient flight?

Things didn’t get much better in LAX. After lining up at our third check-in/ticket counter (your staff kept directing us to the wrong place), we finally got some boarding passes, and then the flight to SFO was delayed by another hour.

In conclusion, this whole episode has been an incredibly unpleasant experience caused entirely by wilfully poor levels of customer service by your Sydney staff. It is clear that they couldn’t be stuffed trying to help us after we’d been shunted to AirNZ – a simple paging message, like the ones that ring out through airports thousands of times per day, asking us to come back to the check-in counter when the service was uncancelled – would have done the trick, and we could have had it all resolved by 1pm, almost 3 hours before the UA-870 flight’s departure.

It was clear the objective of the United staff was to deceive and keep us, the customer, in the dark, in the hope we wouldn’t realised we’d been screwed over by getting routed all over the Pacific unnecessarily.

Unfortunately for the woeful United staff who thought they could just deceive us so they didn’t have to do the right thing by us, the Departure gates for the UA-870 and NZ-118 flights were next to each other, and I happen to know quite a bit about the industry (many of my good friends and a relative are in the industry as pilots and cabin crew).

My final request: While the airline business is subject to numerous external factors like weather and mechanical issues, I feel in this case the problem was purely wilful and deceptive customer service by your Sydney ground staff. In light of this, expect to be compensated for the lost time and massive inconvenience (I’ve now missed a couple of important meetings in San Francisco which I’d planned to make on the Saturday afternoon). I’ll be flying home to Sydney on Friday the 23rd of October on UA-863, which would give you an opportunity to start to address this unpleasant experience at the hands of your Sydney staff through an upgrade.

The bright light in this whole experience was Air New Zealand. While the extra time was a bit hassle, AirNZ’s staff, service, aircraft and everything else were absolutely outstanding. I’d always thought of Singapore Airlines as the outfit with the nicest planes, best in-flight entertainment and highest quality service, especially for economy travellers. AirNZ have just trumped them in my mind, big time – well done everyone at Air New Zealand.

What if your work is your hobby?

After spending yesterday afternoon in the office in a hack-a-thon – hat tip to Glenn for joining me – and much of today getting a plan together for CeBIT this year, I was feeling pretty amped about the month and a half ahead and the challenges therein.

So it was funny to have my girlfriend, who’s feeling a bit under the weather at the moment, ask me how I know I’m happy, and ask me to break down how I spend my week. She was basically saying “you work a lot – don’t you need some time that isn’t working, reading the paper, watching interesting stuff on TV, studying and the like to know you’re happy?”

It got me thinking. Am I lucky because my work is my hobby and the challenges of every day are (mostly) exciting? Or am I just deluded: I’m nothing more than a work-a-holic.

What do you think? I’d love to hear your thoughts in the comments…

Mike Arrington's Time Out and the decloaking the mob with Torches & Pitchforks

I wasn’t that surprised to read Mike’s post today about some really bad stuff happening over the last 6 months.

I didn’t know the details until I read them on TechCrunch, but I knew something was up when I messaged him to let him know I was going to be in the Valley for a couple of weeks in November. To my surprise, he told me he was going to be out of the state, at his parents place, and this was with months of advance warning. The Mike Arrington I know doesn’t make many plans that far in advance, and he’ll the first to admit that being right in the middle of Silicon Valley has as much to do with Techcrunch’s success as the many other factors. Being out of town – and the state – for months didn’t seem right.

I thought it might have been family stuff – I knew where he told me he was going to be was his parent’s place – and was hoping it wasn’t bad news or health stuff with him or his folks, and instead that he just needed to get out of the Valley to get out of the echo chamber for a while.

Of course, little did I know it was work related, and he was trying to get away from it, but instead of another Vulture piece from ValleyWag or a hatched job from the clearly jealous and much less talented writer, Betsy Schiffman, it turns out someone with a felony, and gun and an axe to grind was stalking Mike and his staff.

I’ve lived as a house-guest of Mike’s on a number of occasions, initially for 3 month stint in early 2006, when TechCrunch was less than 6 months old, and during that time I felt like I got to know the guy really well. We chatted about times before Techcrunch, women and relationships, lessons from previous business ventures and more. Those were personal conversations, and they’re going to stay that way.

My point is, however, that I got to get to know a person, a man I regard as my friend, thankfully for me at a time when he still “assumed most people were essentially good, and assumed that an individual was trustworthy until proven otherwise”. I saw someone who’d always take a contrarian position and get you to justify it. I’d watch – and cop – him taking the piss out of people, but we’d give as good as we got. I reckon he’s got more than a small potential to become an honourary Aussie: he didn’t care for status/authority, is direct, and loved to stick it to the man, which in his industry, is the incumbent media outlets. Pure Aussie in my books.

I also saw up close just some of the untrustworthy people, the types who lie even when the truth will do just as good a job, who’ve tainted his perspective. I’ve been frankly stunned that such an insightful and intelligent guy could be so trusting of people who’ve since screwed him over. And still he didn’t raise a finger in anger or retribution using his extensive online influence.

I’ve watched from afar as one storm or another has erupted online as people struggle to realise that just because its easier to click a mouse button, it doesn’t make it any less of a fight, and reflected that, with the exception of the stouch with DEMO, none of those fights were of his making. Sure, he’s no shrinking violet – he’s an attorney who loves a fight as much as the next lawyer, but more for the challenge than for the desire to stand upon the head of a lifeless opponent – but frankly, the vast, vast majority of the attacks and abuse levelled at Mike over the last couple of years have been way off base.

So, what’s the deal with these attacks? Given we’re talking about real world threats and attacks, its really worth having a look at them, and potentially shining a bit of light on the attackers. I believe they fall into one of three categories:

  1. Jelousy and Self-Interest – this one is the de rigueur attack motivation for the journalists out there covering tech. Many of them represent old-media, who see the competitive pressure of TechCrunch to be more than a little intimidating. The story I read on SMH today over lunch almost made me choke: headlined “Tony Soprano of Bloggers Faces Death Threats“, and in a piece that characteristically didn’t link to its sources, feature quotes taking shots at Arrington, including the one used in the headline, from other traditional, dead-tree media, who’ve got a pretty clear self-interest in taking him down. I thought this was a bit rich given most tech stories I’ve seen in SMH Tech News lately have been rehashes of TechCrunch pieces with a 12 hour delay and no links to sources. Moving away from traditional media to the other tech bloggers, a decent amount of the attacks are motivated by jealousy. And in the cases where they’re really legitimate differences of opinion, rather than just hit jobs, things are resolved amicably, and mostly in person. I enjoyed lunch with Mike and Dave Winer not two months after this comment’s little dust up, and there were no hard feelings at all around the table in Palo Alto.
  2. Bitterness of Rejection – there’s been a few recent posts about how stupid it is for startups to pin all their hopes on success, interest from VC’s and the implicit legitimacy of a positive review on Techcrunch. I can see how a want-re-preneur might get angry and upset about getting passed over, but if their key to success was a favourable Techcrunch post, I’d argue they don’t really have a business, just a fantasy of rock-star success and a Tesla in every garage. This sort of bitterness is just sour grapes (ok, enough taste metaphors already). The guy who did the spitting might have been responding to the bitterness of rejection, or he could have just be someone acting out the next point…
  3. Tall Poppy Syndrome – anyone who’s spent any time with Mike knows he isn’t a geek, programmer or deep technologist. To my knowledge, he’s never pretended to be. He does business analysis of businesses that just happen to be in the tech scene. Most of the flames I see posted in comments are either from people bitter after being rejected, or just pissed off that some guy who doesn’t know Perl from Python commands so much attention in the tech world. If you’re some random hater who’s rejoycing that Arrington is ‘out’ because you don’t think he knows tech enough, my suggestion is to think about what you’re going to do when you get pink-slipped because the business bit that pays for your lifestyle doesn’t work out, and hope that XKCD remains free so you can at least have some humour.

Anyway, the key point I’m trying to make here is that Mike’s a great guy: within 10 mins of meeting me and my business partner in Palo Alto, he offered us his house for as long as we needed it. All this stuff about Tony Soprano is just plain bullshit peddled by people with their own agenda, and if we let the bitter, jealous and tall poppy types continue with their baseless tirades without any accountability, we’re going to loose more and more good people.

Lets hope the serious stuff of the stalking ends, and for personally, I hope those enjoying the specatle of watching one of their biggest competitive threats bow out (hopefully temporarily) wake up with a nasty hangover tomorrow when they realise their rehashed and late stories, with little analysis, depth, opinion and conviction, supported by a business model more conflicted that Arrington’s ever was, is crumbling around them.