Blue Sky Minds Blog

"I am always doing that which I cannot do, in order that I may learn how to do it."

Thu, 24 Sep 2009 20:38:39 +1000

“I am always doing that which I cannot do, in order that I may learn how to do it.”

- Pablo Picaso (via Life’s a Pitch, Steven Bayley and Roger Mavity, 2007)

It'll be harder for software companies to receive R&D Tax Incentives from 2010

Sun, 20 Sep 2009 23:56:00 +1000

My first engineering job was with a defence R&D organisation. To the scientists and academics there, research was for the creation of completely new work or ideas (undiscovered work). The technical risk involved was that the proposal was wrong or impossible, and that alone could take years to prove.

Software companies, however, have been able to receive the R&D Tax Concession for work that largely involved “customisation and integration of existing systems”, mainly on the basis of spin around the technical risk involved. In 2010 the Australian government will be releasing new R&D Tax Incentives that intentionally prevent these “questionable merit” cases, among several other improvements.

I agree with the department’s assessment that these cases were dubious. Customisation and integration can be technically challenging but the risk is predominantly schedule, financial or organisational (Ie. throw more money, time or the right people at it and it’ll get done). It’s not novel just because no one else has integrated the systems before.

The good news is that the incentives are more generous under the new scheme, budgeted under the assumption that fewer companies will be eligible. The changes intentionally favour small and medium sized businesses believed to be more responsive to fiscal incentives.

The main improvement is that the old tax deduction will be replaced with a tax credit. A tax credit is a reduction in the tax payable (independent of the company tax rate) and critically, it can be carried forward if the company doesn’t make a taxable income in the financial year. That’s awesome.

Also of note to software companies is that activities supporting R&D are still permitted under the new scheme, but small R&D activities won’t be allowed to trigger large supporting activities. The department isn’t quite sure how this will be determined yet, perhaps by proportion, sole-use test, a lower rate of assistance or the like. I saw this feature exploited by a lot of software companies under the old scheme.

The explicit rules around software R&D haven’t been written yet but there’s likely to be new tests for eligibility. The consultation paper suggests a model used in the UK that explicitly defines the software likely and not likely to be considered (eg. search engine algorithm is good, creation of website is not). I suspect that’ll quickly become antiquated as its based on today’s software focus.

Public submissions on the new R&D Tax Incentives consultation paper are due by 26 October 2009. The consultation paper is quite good. It gives the department’s rationale for the changes, what they’re unsure of and examples where the old system has failed.

There's a smart person in NSW Government

Sat, 19 Sep 2009 23:21:00 +1000

Somebody in the NSW state government is a thinker. They’re opening up their data and have launched a competition to promote new applications:

“Applications for New South Wales or apps4nsw is a new public competition to foster and promote the development of innovative digital applications and web services using public and government data relating to New South Wales.”

There’s $100,000 available for ideas or prototypes.

This is a great move. It’s infuriating that crown-owned and state-owned data isn’t available to the public and businesses. Depending on the department, typically we’ve needed to buy a license or enter a tender process, limiting its application to businesses that recover that cost. Making the catalogue open enables innovation.

Unfortunately, despite good intentions, there’s no data yet. The competition was announced at the start of September 2009 but the searchable data catalogue isn’t live as far as I can tell.

More information: http://www.data.nsw.gov.au/

Great Disruption

Wed, 16 Sep 2009 20:49:00 +1000

I saw Paul Gilding speak at TEDxNSW yesterday. To paraphrase him loosely, if all countries, businesses and people continuously strive for economic growth, what happens when the Earth hits its ecological and resource limits?

Eventually something’s got to give.

His essay on the great disruption is interesting.

He argues that we’re already at point where the ecological and resource limits have been reached. I don’t think so, not yet. But if every person on the planet strives to ascend from poverty, and every person aspires to current western-levels of consumption, and every business and countries aspires for more growth, then we’re probably only a generation or two away from the great disruption. This should be in the form of conflict and oppression, ecological disaster, brutal competition and great loss.

On the forced Telstra split

Wed, 16 Sep 2009 20:48:00 +1000

Communications Minister Stephen Conroy announced yesterday that Australia’s largest telco, Telstra, must be split into wholesale, retail and cable television divisions if it wishes to be involved in the government’s new spectrum and broadband plans. The minister provided a good explanation on ABC’s lateline program.

I must be infuriating for the Telstra board and employees to be the target of government regulation and regularity uncertainty. For consumers and competitors, it’s been infuriating as Telstra exploited its conflict of interest between wholesale and retail (as it should have in the shareholder’s interests). The forced split was overdue.

This should be a good opportunity for Telstra and their shareholders, eventually. Telstra has been an ex-government bureaucracy with too much dead-wood. They have the infrastructure and experience to be a great company (or three) and now they’ll have the excuse to start cutting away the dead-wood.

Even though I’m strongly negative towards Telstra today, I do hope some efficient and nimble businesses emerge because of this decision.

Create a business site in 60 minutes

Sun, 13 Sep 2009 15:11:00 +1000

In July 2009 I participated in BootupCamp Sydney, an intensive entrepreneurship workshop where participants go from nothing to a live business within 14 days.

While the software and technology accounted for probably less than 10% of the effort, here are the steps we used to set up a business site on the third day (once we had a name and business scope):

register the domain name (we used GoDaddy)
sign-up for Google Apps free edition under the domain. Enable email hosting and google docs (for team collaboration)
Sign-up for web-hosting. Our team needed a dedicated virtual server so we used Linode. A short-term zero-effort solution is to enable Google Sites wiki. Other teams used starter hosting with Anchor.
Sign-up for a Tumblr blog. Use the control panel at the domain name host to create a DNS CNAME record to point to blog.. Enable this domain in Tumblr and post something.
Create a Google Docs Form that allows visitors to register for more information. Paste the HTML into a landing page for the business and upload it.
And while we’re at it, register business accounts on Twitter, LinkedIn and Facebook.

We had the site and email up within a hour, a technique for site visitors to sign-up for information, a blog for announcements and a way for the team to collaborate on documents.

Easy email hosting

Sun, 13 Sep 2009 13:43:00 +1000

Its remarkable how easy it is to set up email hosting under your own domain now. Here’s one simple way to setup free email hosting using Google Apps:

1. Register your domain name. Ensure you have control over the DNS MX records.

TIP: I always keep DNS registration separate from hosting to ensure I can switch to a new host easily. DNS MX records are a way to specifying how to route emails.

2. Sign-up for Google Apps using your domain name and completing the business/personal information

http://www.google.com/a/cpanel/domain/new

The free edition of Google Apps is okay and allows multiple email addresses

3. Verify that you own the domain by creating a DNS CNAME record as directed by Google Apps.

Creating a temporary CNAME record is a simple way to prove you control the domain. It simply allows a unique address like googleffff0f320f0ff.blueskyminds.com.au to point to one of Google’s servers. Google lookup the address to verify that it exists and points to them.

4. Setup the DNS MX records to use Google Apps Email.

These are settings in your DNS hosting that instructs it where to route mail. Just follow google’s instructions precisely.

5. Use the Google Apps mail preferences to foward emails to your standard account.

Domain Name Tools

Sun, 13 Sep 2009 12:58:00 +1000

Useful tools that suggest domain name variations:

Comprehensive whois tools:

http://www.domaintools.com/

I use webcity for .com.au registration and DNS Management (to configure A records, CNAME records and MX records etc). Webcity are just an Enetica reseller.

webcity