Is Volunia search or social? It doesn’t matter.

The launch of Massimo Marchiori‘s new search project, Volunia (live streaming tomorrow, Feb. 6, at 12 CET on the University of Padua site), could not come at a more interesting time for the discussion of what the Web will look like in the next five years.

This weekend we have been variously entertained by the discussion between Robert Scoble, John Battelle, Dave Winer and many others about whether the Web we have known and loved for the past 15 years or so is melting away, like polar ice caps (Battelle’s metaphor), under the heat of our planetary addiction for Facebook’s “walled garden” (an odd term from the ’90s era of AOL, but one that is making a far bigger comeback – under Zuckerberg’s leadership – than we ever thought it could).

And that’s just the PC- and browser-based Web, and now the Android-based Web, the one that was defined by Google and that Google defined. But search is changing, morphing beyond recognition. As a user, one of my most common search question is “where on my iPad is that app I downloaded two months ago but whose name I don’t remember”. As a business leader, I need to deal with whole new domains for SEO, such as ensuring the in-Market and in-iTunes Store ranking of my company’s apps. As a strategist, I wonder whether the whole debate between the open search model and the social silos model is somewhat overblown: they’re really two sides of the same coin, and the heft of that coin is the solid metal of advertising, the business that funded search for years and that is funding social today, as Facebook’s IPO filing confirmed just last week.

So, is Volunia going to be a search platform or a social platform or both? “Seek & meet”, says the company’s tagline, hinting at both. But it does not really matter. It is going to be – sometime, at a later stage, post-launch – an advertising platform. It will need to be. Because Marchiori’s backers, led by Mariano Pireddu, have reportedly invested a couple of million euros in the project; and even with the best researchers and engineers, even at Padua-level salaries and not Silicon Valley- level salaries, a couple of million barely gets you a workable beta, if at all.

So, consider Volunia a nascent advertising platform. To attract advertisers, it will need to attract eyeballs. Details are hazy, but today’s paper edition of Nòva, the Sunday supplement of Il Sole 24 Ore, reveals some hints (and promises a video with Marchiori showing off his creature, on the site later today).Many are rooting for Volunia, but early screenshots seem disappointing. The search box searches for sites, within a site, or for Volunia users; you can see which users have been to a certain page, and which ones are there now, with an interface oddly reminiscent of the Rockmelt browser. You can comment and chat on a Web page with other users (Google Sidewiki, anyone?) You can make friends with people who share your interests, based on the pages they visit. According to Pireddu, the engine can be used anonymously if one wishes, users will not be profiled, and navigation data will not be tracked – so there is a bit of DuckDuckGo in there, for now.

If Marchiori and Pireddu get traction, they will be able to raise serious money and build up their dream. If the Volunia beta disappoints (and disappointments loom large in both search and social: remember Cuil? remember Color?), they will have to pivot very quickly and downscale to lesser ambitions. But I am an optimist, and an Italian: so I wish them all the best and I look forward to being wowed by their creature.

(Updates: screenshots here; video – in Italian – here.)

This is what the Greek default looks like

Europe will have to make its choice this year. Either a much tighter, more constrictive fiscal union with a central bank that can aggressively print euros in this crisis, or a break-up, either controlled or not. I don’t think they can kick the can until 2013, as the market will not allow it. Either the ECB takes off its gloves and gets down to real monetization when Italy and Spain need it, or the wheels come off.

If you want to understand what’s going on in global financial markets, go to John Mauldin’s site and subscribe to his free weekly newsletter Thoughts from the Frontline. Every week he pores over analyst reports, travels, talks to a lot of people who know what’s going on behind the scenes, and sits down to package thoughts, numbers and charts to be conveniently delivered to your inbox to provide you with food for thought.  Also from this week’s newsletter: this is what the Greek default looks like.

Greece has two choices. They can choose Disaster A, which is to stay in the euro, cutting spending and raising taxes so they can qualify for yet another bailout; negotiating more defaults; getting further behind on their balance of payments; and suffering along with a lack of medicine, energy, and other goods they need. They will be mired in a depression for a generation. Demonstrations will get ever larger and uglier, as the government has to make even more cuts to deal with decreasing revenues, as 2.5% of their GDP in euros leaves the country each month. There is a run on their banks. Any Greek who can is getting his money out.

Greek voters will then blame whichever political group was responsible for choosing Disaster A and vote them out, as the opposition calls for Greece to exit the euro. Which is of course Disaster B.

Leaving the euro is a nightmare of biblical proportions, equivalent to about 7 of the 10 plagues that visited Egypt. First there is a banking holiday, then all accounts are converted to drachmas and all pensions and government pay is now in drachmas. What about private contracts made in euros with non-Greek businesses? And it is one thing to convert all the electronic money and cash in the banks; but how do you get Greeks to turn in their euros for drachmas, when they can cross the border and buy goods at lower prices, as inflation and/or outright devaluation will follow any change of currency. It has to. That is the whole point.

So how do you get Zorba and Deimos to willingly turn in their remaining cash euros? You can close the borders, but that creates a black market for euros – and the Greeks have been smuggling through their hills for centuries. And how do you close the fishing villages, where their cousin from Italy meets them in the Mediterranean for a little currency exchange? What about non-Greek businesses that built apartments or condos and sold them? They now get paid in depreciating drachmas, while having to cover their euro costs back home? Not to mention, how do you get “hard” currency to buy medicine, energy, food, military supplies, etc.? The list goes on and on. It is a lawyer’s dream.

There is a third choice, Disaster C, which is worse than both of the above. Greece can stay in the euro and default on all debt, which cuts them off completely from the bond market for some time to come. This forces them to make drastic cuts in all government services and payments (salaries, pensions etc.), and suffer a capital D Depression, as they must balance their trade payments overnight, or do without. Then they choose Disaster B anyway.

The end of an era, and what it means

All political lives end in failure, Enoch Powell said: but some failures drag on for much, much longer than others. Yesterday, 75-year old Silvio Berlusconi released his stubborn grip on power by handing in his resignation to our President Giorgio Napolitano.

Bill Clinton left office at 55; Tony Blair at 54; José Luis Zapatero is standing down at 52. The era-defining Margaret Thatcher ceased being Prime Minister at 65, ten years younger than Berlusconi is today. Among leaders who beat Berlusconi’s retirement age from high office, Ronald Reagan stood down at 78, and Fidel Castro at 82; Juan Domingo Perón died at 79 while still in power.

Berlusconi first won elections in 1994, and dominated the political scene so thoroughly that even his intervals in opposition will be remembered as part of an uninterrupted, 17-year spell of Berlusconismo. Millions of young voters have come of age with no memory of Italy before Berlusconi’s discesa in campo. They remember nothing but his political pragmatism, cloaked under an anti-Communist ideology that wore thinner and thinner by the day; his jests, excesses and jokes that slowly turned from charming to pathetic; his extreme personalization of politics as an exchange of favors; and his blind refusal to modernize Italy.

Most of all, he bears responsibility for changing the nature of social mobility in Italy. In the post-war years, Italy’s miracolo economico meant that millions of Italians quit toiling in the fields and migrated to work in the factories of our very late Industrial Revolution. The diseases of the dirt poor, pellagra and malaria, were beaten in the 1950s. In the ’60s and ’70s, many people found their way to middle-class comfort through newly created jobs in banks, commerce, and the public sector. Those who had worked in factories were often able to set up shop on their own, and created a generation of family companies with their own fabbrichetta (small factory). In the ’80s, we even built an elite of Italians who were at home in the upper echelons of worldwide finance, academia and corporations; many young and brilliant students joined international business schools, consulting firms and investment banks. All through this extraordinary growth story, we never ceased believing that doing well in school and working hard were the two keys to our success: even during the darkest days of terrorism and kidnappings in the ’70s, when wealthy entrepreneurial families feared for their children, they sent them out of Italy, to study and earn university degrees abroad.

But something broke in the ’90s. Our ascensore sociale, the elevator that people could catch from humble origins to become respectable and rich, no longer worked very smoothly. Tangentopoli disrupted the old order. It gradually emerged that for ambitious young people it was a smart career move to get a job somewhere in Berlusconi’s economic empire. In 1993-1994, young managers, entertainers, and salespeople went through central casting for Berlusconi’s new political party. “Casting” is not a metaphor: there are many witnesses to what happened in those TV studios. If you were telegenic and could seduce an audience, you were a candidate. If you were a nerd or an intellectual, you were out.

We did not know it, but Italy’s economy had already started growing at less than half the pace of the rest of Europe – which it has done for the past two decades by now. Without reliable growth, young people resorted to patronage and crapshoots: the rise of soccer players’ and TV entertainers’ salaries dramatically shrunk the range of success models and career aspirations for young Italians. Aided by a criminally undemocratic electoral system on one side, and criminally conservative labor unions on the other, our politicians froze the system for nearly two decades. Standards of hard work and diligence went out of the window: when kids got bad grades in my generation, they were locked up to study; when kids get bad grades today, parents complain to the teacher. Politics, with few exceptions, became the refuge of the mediocre. Integrity and intellectual rigor became old-fashioned, unnecessary virtues. Many of the brightest minds of our generation stood by as this happened; many sought their fortunes outside Italy. The privileges of the political class were the target of much discontent, but little action. Stunning arrogance and vulgarity were displayed by politicians even last night, as they left the palaces of power worrying about their own future after Berlusconi.

Mario Monti has a few months, perhaps a year, to pull us back from the brink and to do many important things very quickly, against the opposition of many stakeholders who only wish to stay entrenched in the old order: I wish him all the best. But rebuilding an Italy we are proud of, and shaking out the heavy burden of Berlusconi’s legacy, will take years, maybe decades, if it is at all possible. And we can no longer watch from the sidelines: it starts with each of us.

Meet Francesco Marini Clarelli, European Business Angel of the Year

There are business angels in Europe: they are less visible than the Silicon Valley super-angels, but they do invest in early-stage enterprises, they work to make the business environment more open to entrepreneurs, and they believe in the power of entrepreneurship to add dynamism to our tired economies.

On May 12 Francesco Marini Clarelli, an Italian, was honored as Business Angel of the Year by EBAN, the European Association of business angels, seed funds, and other early stage market players. As an angels’ lobby, EBAN has committed to a few notable efforts, such as producing the white paper on Women and European Early Investing and launching a range of initiatives to support women and early stage investing. Italian Angels for Growth, the network that Francesco founded a few years ago in Milan, has been selected by EBAN as a pilot organization in its effort to bring women from 5% to 20% of early stage investors in Europe by 2015.

I have known Francesco for a few years, not just in my role as a mini-angel and member of Italian Angels for Growth, but also as a family friend. He prefers to keep out of the limelight. But in wine connoisseurs’ circles, he is best known for returning to Christie’s a bottle of 1784 Château d’Yquem, which they had mistakenly shipped to Francesco, instead of the 1904 he had bought: still a fantastic vintage, but not as phenomenally rare as the 1784, which may or may not have been a legendary “Jefferson bottle“.

Congratulations, Francesco! I hear you opened the 1904 with some friends a few years ago, but I am sure your cellar offered a choice of other worthwhile bottles to celebrate the EBAN award in style.

International Journalism Festival 2011. Organization notes

The International Journalism Festival is one of my favorite events in Italy, so much so that this year I’m skipping the Milan Design Week in order to be in Perugia.
The Festival is wonderfully organized (by Arianna and Chris), it attracts a wide range of truly international speakers, and downtown Perugia is a fantastic stage.

Still, the Festival can and should be improved. Here are my suggestions:

1. Panelist should prepare. Panels should be a dialogue among panelists, not a sequence of monologues. In order for this to happen, panelists should be strongly encouraged to get together and coordinate beforehand. A good example is the SXSW Speaker Agreement, a pledge that all speakers have to sign before they show up at the event.
2. No whining. More than once, speakers have spent too much time discussing what’s wrong, and not enough time proposing how to fix it. (Same comment, loud and clear, from Micah Sifry, quoted here and here). We all know the problems: it’s a constructive event if we talk about solutions.
3. Questions should be questions, ideally offered in less than 30 seconds. Too often, someone from the audience grabs the microphone and starts offering way too much information on their entire biography, their views of the world, and the issue they want to call attention to. It is perfectly appropriate for moderators to interrupt kindly but firmly and say “What is your question, please?”

I hope to come back to a new and improved Festival next year. It takes a little extra effort, but it’s worth it.

Technology, innovation and creativity in Italy: SXSW Technology Summit

Terminal decline or lull before a comeback? That was the question on our minds as Gianfranco Chicco, Marco Massarotto, Luca Conti and I prepared for our panel about Italy on March 17 at the 2011 SXSW Technology Summit (photo courtesy of Paolo Privitera). And I like to think it’s the latter.

Our organizers asked us to address questions ranging from “Who are the leading mobile carriers / companies in your country?” and “Is there enough talent for high-tech work?” to “What companies / individuals are leaders in terms of overall creative technology?” and “What are the best resources / blogs / websites for people to learn more about new media in your country?”

I worked on the first chapter, summarizing in a few slides the key data points about the country’s human capital and technology infrastructure, and I’d like to share my speaking notes with you. (You can see my slides, together the chapters about technology innovators (Marco) and social/new media trends (Luca), at this link or embedded below.) Here’s my section of the talk – let me know where you agree and where you disagree.

• What I will argue today is that you should think of Italy as two countries; not in terms of geopolitics (we are celebrating today 150 years since unification), but in terms of culture, society, economics and technological environment.
• One part of the country – mostly young, mostly urban, mostly in the prosperous North (but not only: you will see later some examples of innovation leaders from the Center and South of the country) – works and feels like Bavaria or Sweden, from Internet penetration to women’s participation in the workforce. The rest, though, is very different.
• Our education system is an active contributor to this inequality:  for secondary school students, the gap in standardized OECD PISA test scores between the North-East and the South of Italy is larger than the gap between Finland and Spain. As Roger Abravanel documented in his Meritocrazia, schools in the South of Italy perform no better than the average school in Uruguay or Thailand.
• What about university education? Well, it was pretty much invented in Italy (the University of Bologna traces its roots back to 1088 A.D.) We could have performed some more upkeep, though. For many centuries, universities were by definition elite institutions; a serious push for a broader diffusion of upper education only started for good with the 1968 student movement. Yet, over 40 years later, according to OECD statistics, only about 10% of Italians aged 55-64 have obtained a university degree, and only about 20% of of Italians aged 25-34. A lot more people start university studies, but the drop-out rate is very high. Furthermore, the return on investment for those who complete a university education is over twice as high for young men than for young women. So do we, as a nation, have the skills to compete, almost ten centuries after the first place of higher learning was founded?
• I argue that spikes count for more than the general level of education; that deviation from the mean is more important than the mean. So the question is not whether everybody gets a degree, but whether the system is able to take in talented students and churn out a number of exceptionally creative people who then go on to change the world. And I believe it does: take three of our centers of excellence – the Polytechnics of Milan and Turin, and Bocconi University in Milan – and you’ll see not only that their graduates on average find jobs quickly and go on doing well for themselves, but also that many of their alumni have left a mark on the world as architects, designers, technologists, economists and entrepreneurs.  It may be a stereotype that Italy stands for creativity, but it’s hard to challenge it.
• Having talked about human capital, what does the infrastructure look like? Well, again – Italy is at least two countries. One country has broadband at home, banks online, shops online, and prints out its own boarding pass at home before going to the airport. The other one is stuck in the 20th century.
• That second country (older, less educated, less urban…) is still big enough that the most successful technology of the 20th century, television, remains the leading media technology in the country as a whole. More than half of the advertising money spent in the country goes to one media: television. TV grew through the recession, and it’s still growing. Yes, the Internet is growing too: but we’re still very far from being a market like the UK, where the Internet left TV behind two years ago. TV is the winner and we’re in a market where the winner takes all: not just the advertising money, but the nation’s collective attention.
• Fortunately, we have a vibrant telecommunication market, especially in mobile. Mobile is important not just because it’s a bigger market than fixed line, but because in the absence of a national broadband policy mobile may well turn out to be the key to reuniting that divided country I talked about. We’re already among the leading European countries in terms of mobile broadband penetration through devices such as Internet keys and dongles. The operator I work for, Vodafone, has committed to bringing mobile broadband over three years to 1,000 towns in Italy that today have no broadband access at all, fixed or mobile.
• Still, the recent recession has made it a tough ride. In 2009, we lost 5% of our GDP, and we’re merely inching back to growth, not sprinting. The investment environment took a hit. The ICT sector was hit very hard; telecommunication spend did not collapse as dramatically, but is now likely to be in its fourth consecutive year of slow contraction. As consumers have adopted recessionary mindsets, businesses have had to learn to cope.
• So what are the drivers for technology and innovation, looking ahead? For Italy, the tech lobby Assinform identifies the usual suspects: cloud computing, eGovernment, mobile broadband, tablets, SMEs. But don’t underestimate the role of Europe. The European Union as a forum, in spite of the recent debt crisis, is still a very active bureaucracy working for competition within the EU, for consumers and for citizens. It exercises both legislative power and moral suasion, such as in standardization initiatives – essentially banging people’s heads together until they agree to make sure that whatever they’re doing is interoperable with what their other fellow Europeans are doing. (GSM, as you will recall, was started in the 1980s by a bunch of postal and telecommunication bureaucrats. Who would have thought?)
• Back to Italy: are we in tune with the Digital Agenda for Europe? No, I would not say we are in tune. Our government has been preoccupied with other political priorities, such as fiscal devolution and reform of the criminal justice system. Ask any of our political leaders, government or opposition, whether a digital agenda for Italy is among their top ten priorities, and my guess is that hardly any of them will even have a clue of what you’re talking about. (Remember: they are elected, overwhelmingly, by people who watch TV.) So lobbying has started, most recently with Agenda Digitale – a plea by 100 Italian technology and media figures for the political establishment to define what we’re going to do about the digital divide -, and must continue.
• Having said all that, should you lose hope in the country? No, no, no. We do have enablers that we didn’t have ten or fifteen years ago: VCs with proven track records, incubators and seed funds started by successful entrepreneurs and managers, angel investors and angel groups. (I am a member of Italian Angels for Growth). We do have skills, creativity and talent – as shown by the many achievements of Italians around the world. We have bureaucracy, yes, and we are badly governed: but that won’t last much longer. We are proud of being Italian, and we want to fix our country. Each of us here today is doing their small or big part.

Something I want to always remember

Yesterday, France snatched defeat from the jaws of victory in the game with Italy, the perennial underdogs in the Six Nations rugby tournament.

The market always wins

For a long time, and until not so long ago, it used to be that what counted was how much you were worth on the marriage market.

Then, briefly, it was about how much you were worth on the job market.

But now, now it’s just about how much you’re worth on the meat market.

(Photos: ANSA)

Endeavor and the force of entrepreneurship. A proposal: bring it to Italy

Ever since I first heard of the global nonprofit Endeavor, an outfit dedicated to mentoring and empowering entrepreneurs in emerging countries, a few years ago (former colleague Matt Bannick sits on Endeavor’s board), I’ve thought: why, we need this thing to come to Italy. “It’s venture capital without the capital,” as founder Linda Rottenberg says, in this profile in the Wall Street Journal Magazine. (“Rottenberg [...] had made her way to Latin America in the mid-1990s. Her eureka moment came in Buenos Aires. Riding in a taxi cab with a driver who had a Ph.D. in engineering, she asked why he wasn’t an entrepreneur—back home, engineers were starting dotcoms. He reacted with a quizzical look: “A what?””)

Don’t get me wrong: entrepreneurs need capital, too. But first of all they need to live in an environment that understands, appreciates and supports the culture of entrepreneurship. Not the mom-and-pop entrepreneurship of opening a bar or buying a taxi license: but the type of work that, through process or management or technological innovation (it doesn’t have to be technology, although that helps), creates a scalable business where there was none before, and therefore creates value for customers, lifts people out of unemployment, and contributes to growth.

So, here is my proposal: dear Endeavor team, please come to Italy. We’re not that different from the Latin American countries where your work has been so impactful.

 

Google Video’s Italian judge speaks out

Dear international readers, you’ve probably heard that Google has been found guilty of violating privacy laws in Italy. The full text of the ruling was published a few days ago. Want to get to know judge Oscar Magi a little bit better? Here is an interview he gave to reporter Daniele Lepido – who contacted him through Facebook. Enjoy!