EventsStartups

ICO’s: Let’s Cut The BS

July 9, 2018 by Craig Ryder

Software development companies in Sri Lanka

A panel discussion on Initial Coin Offerings (ICO’s) in June 2018, hosted by Rise London, featured some of the leading players in this exciting, new game.

This article presents the unique perspectives from the panel, Omaid Hiwaizi, consultant Blockchain Startup and ICO Marketing Strategy Advisor, Aldin Ademović, CCO at The Pillar Project, and Obediah Ayton, Private Investment Manager at Chainstarter. The objective is to cut all the BS that has been published elsewhere on ICO’s, and bring you news straight from the people who know what they are talking about.

A Quick Crash Course In ICO’s

Traditionally, it is hard for startups to make money. Even if they have a robust product or concept, they can be bad at selling themselves to investors. Furthermore, traditional venture capitalists can be mean. It’s in their interest to demand a lot back from the startup; namely, influence in shaping the product and shares in the company.

ICO’s have their foundations in crowdfunding, whereby organisations in their infancy raise capital by offering the promise of actual products or services to “the crowd” (ie. the world) in the future; but unlike, Venture Capital, not a share in the business.

ICO’s difference to crowdfunding comes from the return offering. Rather than actual products or services, the early-stage company sells newly created “crypto-tokens” in exchange for more established cryptocurrencies such as Ether (ETC) and, but to a lesser extent, Bitcoin (BTC).

In many people’s minds, ICO’s hold the potential to revolutionize the way people do business, especially for enterprising block-chain startups. However, the “bet” that buyers of ICO tokens or traditional equity make on a startup product or platform isn’t all that different. Both need the startup to gain traction and at least show promise of delivering growth, to see their investments rise in value.

What Was So Wild About ICO’s In 2017?

The whole essence of blockchain, and in turn, ICO’s, is democracy.

By not giving up influence in the business direction or its shares, ICO’s democratise who can raise money for their startup or idea.

The problem in 2017 was that this democratic process was unregulated and the revolutionary concept of ICO’s — that anyone can come and raise money for their idea — gave birth to mercenaries essentially releasing tokens without any tangible idea, concept or business plan. They were effectively printing their own dollar bills.

For fear of missing out on the spiraling boom, people invested their established crypto-currencies in phoney startups. Much like the Wild West, some people made a lot of money, whilst, others lost a lot.

The “Wild West”. Photo by Chris Murray on Unsplash

What Changed In 2018?

Regulation has come in.

Whilst the regulations differ across the world, to launch an ICO in the UK and EU requires a prospectus: essentially a “deck”. So, now you can only raise up to €5 million through an ICO, before a business plan that takes approximately six months and €200,000 to produce is needed.

ICO’s, therefore, have changed. Now a startup needs to package their ICO more traditionally, using strong professional advisors to produce high quality documentation. A big chunk of capital is also essential.

What Are The Positives And Negatives Of Regulation?

Clearly, the negative is that the very essence of ICO — the democratization of who can raise money — has been lost (to an extent), because only startups with an initial access to funding can afford the lawyers and documentation required to produce the deck.

That said, regulation is a compliment to the growth potential of ICO’s, and it is only a positive step to burst the bubble of 2017. The message now is to embrace regulation.

Therefore, startups should not rush their ICO, but instead wrap their sale in governance. Soon the system will be cleaned of last year’s bad ICO’s, and the bad press will be drowned out too. In 2018 there has been far fewer ICO’s to 2017, but much more money has been raised this year: approximately $10 billion already to last year’s $6 billion.

The Future Of ICO’s

The language of tokens will probably disappear. “Token” was only initially used because it has been tried and tested, but now, with the new, very centralised, regulation, reverting to a more traditional equity-language, will encourage the likes of JP Morgan and Barclays to enter the fray.

ICO’s don’t have a future in China and South Korea: they have been banned. But there are a number of offshore jurisdictions popping up — Bermuda, Cayman, Isle of Man, Gibraltar, Cyprus — that are offering cheaper, leaner frameworks.

At present, it is unclear how these unregulated ICO economies will affect the global market, but an ironic twist feels imminent…

Won’t dodging established economies (EU, Japan and USA) for cheaper pickings offshore, smack of the same age-old problems of traditional equity deals and dollars?

Life at CalceyUX

Craft better UX with what you already have!

June 4, 2018 by Ranga

Moving from nice looking design to user centric experiences

With the smell of burning gun, the tube slowed down to another London Underground Station. I took my eyes away from the notebook to look around.

A fellow passenger, sitting next to me was trying to get my attention. Unusual, as all passengers are usually just sit and stare at their smart phones or drown in a daydream with plugged earphones.

“Hey mate, do you design Apps?”

Odd choice of a question to begin with. Maybe, he has seen the wire-frames (hand drawn sketches for my next project) through the transparent file in my hands and guesses what I’m doing.

“Mmm… yeah.”

He introduced himself with a brief description. Originally an artist, who had worked for advertising agencies, he had later become a self-taught graphic designer. He was having a hard time figuring-out designing for apps and asked;

“So… What’s really is this UX thingy?”

His tone is curious and I answered instantly;

“So, you know, UX is not just about designing apps or websites. User experience covers all the aspects of all end-users’ interaction with a product or service. And then in UX design, we are trying to enhance the user satisfaction with the product and or service by improving the usability, accessibility, and etc. UI is …”

He was listening intently, but just at that moment we were disturbed by the famous underground announcement;

“Please, mind the gap …”

TL;DR

Even though we prefer to use one thinking hat at a time, crafting great UX requires thinking both analytically and creatively at the same time

Earlier that day, I was at Google Campus London (now it’s Campus London) where we were given an opportunity to pitch our digital product designs and get feedback from industry experts. Thus, the subject was already on my mind. Even before the announcement ends, I realized, that I have to put that explanation in a fairly simple and straightforward way.

I took out my notebook and started sketching.

User Experience

“Ok, for starters, let’s look at this in this way…” I showed the sketch.

“Our end user uses a product — and or service, to accomplish some goal. As you can see, the UI acts as the user-facing layer of the product. A common misconception is when people think that UI is the UX. It’s not, UX is not just UI. Even if the user interface looks great and usable, if users can’t accomplish their goals at the end, then the user experience needs work.”

“So, what about business goals?” He asked.

“Aha, good question!” I replied;

“As an entry point, let’s replace the user with a business owner and the user goals with business goals in this same diagram. So, now the owner needs to achieve his business goals through the same product. Then you can see how the owner’s experience would be. Depending on the product, there could be a UI for the owner as well.”

“So, when you are talking about the UX of a specific product — and or service, you have to consider all the aspects of all the end-users’ interactions with it.”

Working with what you have

“Mm… Hmm, I see. But what’s wrong with me?” he asked.

“Of course, there is an UX design process and there is a range of techniques that you can master. But before stepping into that, you can use something you already have.”

“Analytical thinking and creative thinking.”

“Since you have been an artist for years, you already use your creative thinking hat most of the time. Just think about what you do when you get a design brief for a poster, you think about the campaign, colors, target audience, etc right? you analyze the problem, before going into the design process.”

“So, the same applies here. Just have to do little more work when doing the research. Practice blending both analytical thinking and creative thinking when doing UX design. Don’t get confused these two thinking hats with the two hemispheres of the brain, the myth of the creative-right vs analytical-left brain has already debunked.”

It had become a longer conversation than expected. The tube was now less crowded, we were moving away from the Central London and at the next station, I switched to the London Overground.

Do you agree with my explanation? Or can you perhaps propose simpler way to explain UX to a novice? Eager to hear what you think.

Opinion

How come Airbnb has few true competitors, while Uber has so many?

May 29, 2018 by Mudith Uswatta

Uber and Airbnb have been described in the above terms so many times now that it’s almost a no-brainer to use one company to the explain the other;
“What Uber is to taxis; Airbnb is to accommodation” or vice versa.

While the two companies differ vastly in culture and tactics, they do have quite a bit in common;

They are the poster children (at least until Uber’s fall from grace) for the wave of startups disrupting traditional industries with technology
Both are marketplaces and adopt a business model described “network orchestrators” for their role in aggregating an industry and facilitating trust, relationships and transactions. The uniqueness of this business model is credited for both companies have attracting huge amounts of venture capital at valuations that dwarf their publicly listed, traditional competitors
Both are consumer facing applications
They bring together buyers and suppliers and earn a transaction fee for making it happen
Both are looking to unlock economic value from dormant assets. Airbnb enables people to rent out unutilized space/rooms to travelers while Uber enables any driver with a vehicle and spare time to become a taxi

However, the current status of the companies could not be more different
Leaving aside Uber’s drama with culture issues and top management changes, still leaves the stark contrast between the competitive market positions of the two companies. Airbnb arguably has no startup competitors. If anything, its direct competition comes from incumbent like Booking.com trying to get in on its turf, to protect their existing business model. Uber on the other hand, has severe direct competition in almost every market. In some cases, like Didi in China, these competitors have proven strong enough to oust it from the market entirely.

Uber also recently existed 8 countries in South East Asia, ceding them to Grab. Even leaving aside Didi and Grab, it faces a bunch of strong competitors, with a lot more startup tenacity than Airbnb’s competitors in the form of Go-Jek, Ola, Careem, Cabify etc.

This is surprising, as Uber and Airbnb are also similar in two key aspects that determine the defensibility of their business model.

From a purely software point of view, both businesses can start with relatively simple apps, without needing an army of developers or a hefty development budget. Build a minimum viable product and you’re ready to start marketing to on-board new drivers/properties!
Both companies have to win uphill battles to be accepted by regulators and incumbents (taxi driver unions, hotels), in each new market they enter. Once they do, similar new entrants can ride on their hard won legitimacy. This creates a tangible second mover advantage, as competitors can then focus on growth instead of politics.

So what explains the intense competition that Uber faces globally, relative to Airbnb?
For one it might be due to global vs. local network effects as explained by this article. The thinking here is that Airbnb benefits from global network effects while Uber only enjoys local network effects. For example, an Airbnb listing in London is beneficial to a traveler from Sri Lanka as much as it is to a traveler from US. Thus, Airbnb benefits from its global inventory.

On the other hand, taxis in San Francisco have no relevance for a rider in New York. Hence Uber, needs to start from scratch every time it enters a new market. For Uber’s local network effect to kick in, it needs to recruit drivers, build partnerships and market itself to riders. If a sufficient volume, of riders and drivers sign up, it becomes attractive for more to join. These local network effects mean that Uber’s global brand is of limited use in any specific market. Any local competitor that nudges ahead by winning more riders or drivers, can run it out of a market.

Somewhat tied to the above, but perhaps a reason in itself, is the fact that Airbnb’s model scales better than Uber. For example, to enter new territory Uber needs at minimum a small team to sign up drivers, spread awareness among consumers and handle relationships with local governments and unions. Airbnb on the other hand, could get hundreds and thousands of listings from property owners who wanted to be discovered by travelers, without having to put in this kind of effort or investment. As long as its global brand is well known and its site receives traffic from prospective travelers, it is useful for property owners to get themselves listed.

To its credit, Airbnb also managed to create value beyond simply offering convenience and cost effectiveness. By marketing itself as a way for travelers to ‘live with locals’ and to immerse themselves in the culture of the place they are visiting, Airbnb has created a truly differentiated offering, that can take on the traditional hotel industry. The Uber business models on the other hand, is still too focused on ‘hygiene’ factors which could be matched and surpassed by nimble local competitors.

Both these companies have transformed the world and profoundly influenced how we travel both locally and globally. But one seems destined to keep losing more battles to local competitors and subsidizing rides to stay competitive while the other is gradually tightening its grip around the global market it set out to capture. A telling lesson on the importance of understanding the full intricacies of one’s business model, for all aspiring disruptive startups.

References
https://www.forbes.com/sites/valleyvoices/2016/08/17/airbnb-uber-and-marketplaces/#723254de7bd5
https://hbr.org/2014/11/what-airbnb-uber-and-alibaba-have-in-common

Opinion

GDPR is a big deal; even for outsourced development agencies that collect no user data

May 21, 2018 by Mudith Uswatta

Coming into effect in a few short days, the EU’s General Data Protection Regulation (GDPR) is set to bring about the greatest change to European data security in 20 years. Replacing the 1995 Data Protection Directive, outdated in the age of social media and “smart” mobile devices, the new regulations require companies that collect data on EU citizens to comply with strict new rules.

Companies are expected to implement initiatives for safeguarding data and take technical and organisational measures to individuals’ privacy rights. GDPR places the obligation on companies to prove their accountability, requiring that they be able to demonstrate GDPR compliance and that reasonable measures have been taken to grant individuals’ rights over their data security. Companies are also required to ensure systems and processes are in place to test, monitor and measure data security at any given time.

As an external development partner to many clients in Europe Calcey collects no data from EU citizens directly, that brings it under the purview of GDPR. We have also already minimized access to sensitive data of clients, a quick win and a crucial step to reduce our exposure. While the maxim that you can’t lose (and in this case misuse) what you don’t have is logically sound, actually complying with GDPR requires a lot more. What follows is what we’ve learned and done in preparation so far, to gear up for changes post 25th of May.

A quick summary of GDPR

GDPR requires not only that organisations maintain records of the categories of data they process, the recipients of that data and their geographical whereabouts, the retention periods and security measures that have been applied, but also that these records be dis-closable at any given time.

Take a minute to consider this. The exercise of an individual’s rights over their personal data can only truly be effective if an organisation’s technology stack is fully flexible and agile to delete, restrict processing and export data as and when the individual (or data subject) demands. The challenge, then, that many organisations have been faced with is that their technology and processing systems have not been designed for GDPR compliance.

The core individual rights covered by the GDPR that require the most technological attention are the ‘right of erasure’ (the right to be forgotten/deleted from the system), the ‘right to redaction’ (data can be kept, but is marked “restricted” and cannot be touched without further consent by the user), the ‘right to data portability’ (the ability to export one’s data in a machine-readable format), the ‘right to rectification’ (the ability to get personal data corrected), the ‘right to be informed’ (getting readable information, as opposed to long T&Cs), and the ‘right of access’ (users should be able to see all the data collected and stored about them).
The technology these rights require, in turn, include technology to:

Enable rectification, redaction, erasure and anonymization
Map or trace the full information life cycle
Enable the transmission of personal data from one technology stack to another
Perform search and retrieval
Enable freeze and suppression
Categorise personal data by type and processing purpose

To be compliant processing systems will be required to include controls to protect against unlawful and/or unauthorised access or disclosure of personal data and include up-to-date countermeasures against current attack techniques.

Technologists, have their work cut out for them in the era of GDPR and must take information security seriously. Continuous steps and improvements to systems will be needed to ensure compliance.

Privacy can no longer be an afterthought

Privacy, for instance, should be built into software from inception and should be at the core of any system and not be installed with a plugin. Privacy cannot come at the price of an app’s functionality and users should not have to choose between privacy and functionality. Such software will become illegal under the GDPR.

A pertinent point for companies to think about could prove to be ‘pseudonymization’, heavily recommended by regulators as a way of protecting personal data. ‘Pseudonymization’ is the processing of personal data in manner that the data can no longer be attributed to a specific data subject without the use of additional information. That is personal data is stored separately from additional information so that in the event of a breach, the data would be hard to reconstitute. For example, a person’s name would be kept separately from the history of his actions on an app. This way in case of a breach, it would not be possible to match an individual and his actions. While adding an additional layer of security, implementing pseudonymization demonstrates a commitment to security, which can be useful under GDPR in the event of a breach.

Consent is set for an overhaul

Further to be deemed unacceptable under GDPR are soft opt-in methods and consent buried in long Privacy Policies or Terms & Conditions documents full of legalese. GDPR consent guidelines require that consent messages should be written in plain language and unbundled from all other terms and conditions. The information must cover all forms of processing that companies aim to undertake. Take for example, the common practice for companies to collect data to share with third parties for marketing reasons. Consent is often obtained by asking customers if they would like to receive marketing relevant to their interests (e.g. from travel agents). Current guidance by authoritative sources indicate that even such precisely defined categories of third-party organisations will not be acceptable under the GDPR. Instead, companies and all third-parties will need to be named and the purpose of the data collection explicitly stated.

All opt-in messages and collection systems will need to be checked and re-written where they don’t comply with GDPR. Consent records may need to be maintained as well, so they can be presented if challenged. System design changes may be required to ensure that systems are in place to provide evidence that users consented to specific uses of their personal data.

In the event where users request that their data be removed, companies will need to ensure comprehensive processes are in place to remove this data. This means deleting personal information, as well as other identifiable data, within a 30-day window once a request is made. Having an automated system that can perform this may become a necessity and well worth looking into, as manually removing data laborious. Developers will also need to plan how the information requested can be made available in an easy to understand format. Here, again, the law requires information to be provided within 30 days of a request. Having a system in place to monitor data breaches is also necessary to ensure quick detection and action in the case of a breach to minimize damage.

What can service companies do to face the brave new world?

GDPR is spawning an industry of its own as newly minted “GDRP consultants” offering everything from advice and audits to outsourced “Data Protection Officer” offerings, set up shop. The lack of clarity and direction regarding implementation casts doubt about the validity and effectiveness of such interventions and certifications to ensure compliance.

Calcey being a software services company providing engineering talent to fast-growing technology companies is unlikely to become a data controller, at any stage. Instead, Calcey is already a data processor, due to current engagements with European clients. Hence, Calcey preparations for GDPR is focused the following;

Getting Data Protection Agreements in place with data controllers to formalize governance of data
Educating staff about the requirements, risks and responsibilities created by GDPR
Minimising access to sensitive data and using anonymisation/pseudonymisation to minimise risks in the event of a breach
Conducting an internal audit to identify, assess, mitigate and minimize risks, even though Calcey’s exposure to sensitive data is minimised by the above

Of course, much more remains to be done. GDPR is certain to become an on-going theme and will be a key consideration in all future architecture discussions when new projects are being initiated. The tight coupling of functionality with user data is already a thing of the past.

The transition to comply with the new regulations will be chaotic and will re-shape the internet economy. How the many successful internet giants who rely on businesses models where users exchange personal information for free services, will evolve, remains very much an open question. Stay tuned for more blog posts around the topic, as we along with the rest of the world, continue to grapple with this new reality.

References
https://ec.europa.eu/info/law/law-topic/data-protection/reform/rules-business-and-organisations_en
https://gdpr-info.eu/
https://ico.org.uk/for-organisations/guide-to-the-general-data-protection-regulation-gdpr/
https://www.dpnetwork.org.uk/opinion/gdpr-consent-ico-draft-guidance/

AnnouncementsEvents

Calcey’s back in Sweden

April 13, 2018 by Dhinushka

Calcey’s Mangala Karunaratne visited Sweden from 3^rd April 2018 to 9^th April 2018, as part of an initiative to encourage and foster growing interest amongst Swedish firms to work with Sri Lankan IT companies.

Accepting an invitation to speak at a breakfast seminar in Stockholm titled “Discover the opportunities in Sri Lanka”, Mangala addressed the gathering with a talk on the IT industry in Sri Lanka, the country’s keenness to work with more companies in the region and Calcey’s own experiences working with Swedish companies.

Software development companies in Sri Lanka Calcey — Mangala presenting at the seminar

Calcey ourselves have steadily increased our presence in Sweden in the last year through strategic partnerships and periodic visits to the country. The visits that help enhance understanding and strengthen ties, have proven to be an invaluable part of Calcey’s strategy and entry in to Sweden. This trip, in particular, acts as a follow-up visit to that made in October 2017 to meet clients and establish our presence in the country.

A big win for Calcey in Sweden came when Nelly.com, one of the country’s largest fashion houses, signed on as a client in June last year. Ancon, the popular point-of-sale system used by over 1500 restaurants in Sweden, has since come on board this year. Both companies have engaged extended teams to work alongside their in-house developers and the Calcey teams collaborate closely with their Swedish counterparts to ensure mutual goals are achieved.

A number of clients have also visited us at our development center in Sri Lanka and a Swedish Srum Master is currently here with us. Residing in the country, he works closely with our development team on his company’s multiple on-going projects.

This trip organised and made in partnership with ITBPO Sri Lanka, included stops in Stockholm, Gothenburg and Malmo. A Swedish company, ITBPO has gained a reputation for matching leading Swedish businesses in search of IT services with innovative Sri Lankan ITs. ITBPO represents Sri Lanka and its IT offerings to companies in the Nordic region and has helped foster a number of successful, mutually beneficial partnerships over the years.

Sweden is only a stop, however, for Mangala who is on his way to Geneva for the Seedstars Summit, where the leaders of the tech industry will come together to share their experience, skills and insights. Mangala, the Country Ambassador for Seedstars, the global start-up accelerator program, will also conduct a session on common issues related to UX during his time there.

Let's talk about UX and common mistakes with @mangkaru from @calcey and @freddylinares from @neurometricslab pic.twitter.com/IsZcVilfYK

— Seedstars (@Seedstars) April 10, 2018

Opinion

Writing Great Git Commit Messages; Why both ‘why’ and ‘what’ matter in a Git commit!

March 26, 2018 by Chomal

Mindlessly jogging in the web stream, I stumbled upon a post that pointed me to a good read detailing why ‘why’ matters more than ‘what’ in our Git commits.

TL;DR— the article explained extensively why ‘why’ matters more than ‘what’ since, “anyone can see WHAT you did just by looking at the code. But the code can never tell someone WHY you did it”, with an example Git commit going along the lines of “user should be able to see the card before editing it” despite the old way; “card view controller added”.

Albeit an enlightening read, it looked like it had missed few subtle annotations which could have drastically disrupted the way we would have typed our next Git commit. The author’s suggestion looked a little vague and it also sounded like something out of a User Requirement Document.

A commit speaks of a commitment of a developer to the project. It specifies a certain milestone and can be an addition or a change. Therefore, there can be instances ‘why’ doesn’t matter at all such as ‘added main template’ or even ‘added settings modal’ because they can be contextually insignificant during the resulting process. And also the little omission of ‘what’ wouldn’t work either since most of the times I look up on a commit is when I want to quickly know who did this change (isn’t that the whole point of it?) before asking why it happened. That’s what eye catches fast, ‘what’ of a commit before a ‘why’.

Therefore, as a solution to all, I propose combining both ‘what’ and ‘why’ for a better commit. A better way of saying the author’s example would be ‘added card view controller to enable user to view the card before editing’. With a single line, commit message talks about ‘what’ the dev has done and also ‘why’ he/she has done it. Easy, cleaner and straightforward than the default convention.

Happy Git-ing!

References- Gupta, S. (2017)- Writing Great Git Commit Messages.

Life at Calcey

My Calcey Experience

March 8, 2018 by Suhail

A trainee software engineer recounts his first three months at Calcey
A fresh graduate, without prior experience, stepping into a work environment for the first time, I found exactly what I wanted most in a workplace, in the CHILLED OUT, FRIENDLY VIBE, that engulfs you the minute you walk through the doors. Friendly ‘hi’s, a welcome note from my interviewer himself and a casual dress code found me right at home from the start. All this and I haven’t even got to the Pool table!

DREAM workplace or what?

My interview at Calcey, was my first ever and walking in hardly knowing what to expect, I was surprised it lasted as long as an hour. Nonetheless, I enjoyed the deviation from the usual “Question and Answer’ format we have all come to expect of interviews and the test of my personal skills and talents instead. This showed me that this was a company that, not only, placed value on a person’s knowledge in a specific language or technology, but also their ability to swiftly solve problems, improvise and absorb new things. I was able to draw confidence from knowing their decision would be based on the talent and skill I showed, rather than ‘paper proof’- I never once had to take out my file of certificates and documents!

Joining a team working on a new project that had just kicked off, I found myself a little at sea initially working with a new technology unfamiliar to me. Yet the team welcomed me with open arms and guided me (bless these people) throughout the development. I even got the opportunity to sit in and be a part of weekly calls with the client, which was a great experience and invaluable exposure. I have learned through these calls the importance of understanding the end user. That in order to be a successful Software Engineer, one must go beyond the coding to build empathy for end users. To have learned this seemingly simple, yet fundamental, fact so early in my career has shaped my way of thinking and approach in a way that, I believe, could prove to be invaluable to me in the future both professionally and personally. (The world needs more empathy!)

I’ve now been given the opportunity to work on another new project, with two other trainees just like me, where we are allowed to develop independently. Just kidding, we get help from the seniors when we’re stuck!

I would proudly call myself a product of Calcey, for the experiences and technologies I am exposed to here. They, together with the people and their constant support and guidance, are molding me into a better developer than I could have ever imagined 3 months ago.

Photos by Jan Michalko

Life at Calcey

Why the two pizza team rule is the name of the game at Calcey

February 26, 2018 by Mangala

At Calcey we often like to say that we are in the business of providing ‘two pizza’ product engineering teams to fast scaling technology companies, looking to take their software product ideas to market quickly. Why two pizza teams? Well, simply because it works. A concept popularized by Jeff Bezos, ‘two pizza’ teams is not simply a management fad, but an idea backed by the science behind how people coordinate and communicate within teams.

Bigger isn’t always better
As the story goes, the coining of the ‘two pizza’ rule was sparked by a discussion at an Amazon corporate retreat. One manager suggested that teams should communicate more with each other, a seemingly reasonable suggestion that Bezos shot down to everyone’s surprise. “Communication is terrible” he said, but the way to fix it was not to communicate more. He went on to explain that small teams make it easier to communicate more effectively, to stay decentralized and moving fast, while encouraging high autonomy and innovation. The rule of thumb he coined to summarize his idea was that a team should not be larger than two pizzas can feed. Let’s take a look at the science behind his thinking.

Communication becomes more problematic as team size grows
The late Harvard psychologist, J. Richard Hackman, bluntly stated, “What he found was that number of links between people within a team increased at an exponential rate as the team size grew. Management – essentially the task of handling these links, consequently becomes harder.

The formula for calculating the number of links between people in a group is as follows;
n(n-1)/2, where n = number of people

Let’s look at how this works as team size increases.

As group size increases, the links start to get unwieldy

A basic two-pizza team size of, say, 6, has 15 links between everyone
Double that group for a team of 12. That shoots up to 66 links
A group of 50 people has an incredible 1225 links to manage

Every steep jump in links also produces a steep jump in the potential for mismanagement, misinterpretation, and miscommunication. Delays emerge from the snowballing time and effort required to keep everyone informed, coordinated, and integrated. There’s even a name for the delaying phenomenon in the software development world — Brooke’s Law, which states that:

“adding human-power to a late software project just makes it later.”

Put simply, throwing more bodies at a problem becomes an increasingly inefficient solution, as team size grows.

Getting lost in the crowd
Studies have also shown that larger groups also have a negative effect on motivation – a phenomena known as social loafing. In layman’s terms this is the classic result of thinking that someone else will do it, if I don’t. Bibb Latane, who demonstrated this via multiple studies described the lower sense of ownership that a members of larger teams feel as follows;
“when groups get larger, you experience less social pressure and feel less responsibility because your performance becomes difficult, or even impossible, to correctly assess amidst a crowd. It’s no wonder that when credit and blame get harder to assign, you start to feel disconnected from your job.”

Smaller teams get more love
Psychologists have also uncovered an emotional element that leads to deteriorating performance in larger teams – termed “relational loss”. Research into how team members felt within teams of varying sizes revealed that people feel confused about where to turn and who to turn to, for support, in larger teams. Think back to the last time when you were part of a tight knit team where you regularly interacted and spent time with everyone on a daily basis and this should seem fairly obvious.

Larger teams need to rely on formal structure and roles. When asking a peer for help becomes a formal request, it is likely to be done with some reluctance. It is easy to underestimate the overall effect of informal links within a small team that make work more enjoyable and socially rewarding, until workers start feeling disengaged and stifled by bureaucracy. Anyone who has gone through this experience can attest to how both individual and team output as well as creativity and satisfaction at work, all take a collective nose dive in such a situation.

Our formula for happy teams
So is there a magic number for optimal team size? Bezos’s two-pizza rule works out to at most 6 or 7 non-ravenous people. At Calcey we typically keep our extended teams to this size. It been rare occasion indeed when we had a team of more than 10.

Transparency is built into our mode of operation to ensure that everyone within a team is on the same page. Teams use email groups or public chat channels to coordinate work, hence everyone has access almost all communication. Every team operates with a significant amount of autonomy, in everything from scheduling to how work is allocated among members.

There is certainly room to improve, but we feel we are on the right track. Last year we got the opportunity to develop a business intelligence dashboard for PayPal’s CEO and global management to keep track of the company’s metrics in real-time. The catch – they needed it done within a few weeks, whereas PayPal’s internal team had estimated few months for the project. We took on the challenge and put one of our best ‘two pizza teams’ on it. They took full ownership for delivering on a seemingly impossible timeline, coordinated with several PayPal teams based around the globe and worked around the clock to deliver the project in 6 weeks.

What’s been your experience with ‘two pizza’ teams? Comment below.
References:
Why teams don’t work?
Brooke’s Law
Why individuals in larger teams perform worse

AnnouncementsEvents

Calcey to showcase at the Mobile World Congress and 4YFN in Barcelona

February 19, 2018 by Mudith Uswatta

Calcey is delighted to be participating at the Mobile World Congress, the world’s largest gathering for the mobile industry, and its digital start-up event 4YFN, to be held from 26^th February – 1^st March 2018 in Barcelona, Spain. The event will expose Calcey to the latest trends, technologies and thought leaders of the mobile world. It will also bring Calcey in touch with the hottest mobile app start-ups, successful enterprise mobile products and other key players within the global technology eco-system.

A Gartner recognized provider of software product engineering services for the last 10+ years, Calcey enjoyed exponential growth last year, acquiring clients in new markets like UK, Scandinavia and Australia, while consolidating its presence in its home base, Silicon Valley. Over the last few years Calcey has worked with multiple start-ups, helping to bring minimum viable products (MVP) to market and supported them to scale rapidly. Calcey also continues to serve as a trusted partner for medium scale technology companies with mature, market leading products as well as leading global brands such as PayPal, Stanford University and Nelly.com.

If you are participating in Mobile World Congress or 4YFN this year and are on the lookout for partners to develop a mobile product or infuse new ideas and fresh engineering talent into your business, this is one meeting you would not want to miss. Reach out to hello@calcey.com to book a dedicated appointment.

AnnouncementsEvents

Calcey supports Global Voices Summit to come to Colombo

October 23, 2017 by Mudith Uswatta

Colombo, Sri Lanka. PHOTO: Amila Tennakoon (CC BY 2.0)

Global Voices Summit is the flagship annual gathering of digital activists and citizen media journalists from around the world. Since 2006, past summits have brought together a diverse group of bloggers, activists, social media experts and geeks from around the world through events in London, New Delhi, Budapest, Santiago de Chile, Nairobi and Cebu City.

The 2017 edition which will be held at Trace Expert City in Maradana (Colombo 10) will discuss the evolving state of the open internet, online civic movements and human rights in the digital age. The summit will deep dive into critical issues that will decide the future of the internet, ranging from the spread of misinformation/disinformation on digital media to legal threats against bloggers and activists.

This is the first time that Global Voices is coming to Sri Lanka and marks a milestone for digital activism in the country. The event will bring together government officials responsible for media and freedom of expression, civil society leaders, youth, leading social media voices, writers, journalists and activists. The discussions that will take place are expected to unearth innovative ideas and new insights that will impact civic engagement, human rights and information dissemination in communities within Sri Lanka and beyond.

Some of the global heavy weights supporting the summit include foundations such as Ford, MacArthur and Mozilla. Locally the event is supported by several prominent organizations including Calcey. As a leading software product engineering company in Sri Lanka, Calcey is proud to sponsor this worthy platform to discuss, brainstorm and share, how to leverage the internet for a more open and inclusive society.
The summit will take place on 2^nd and 3^rd December at Trace Expert City in Colombo. The event will combine a public conference focused on key issues impacting citizen media and the global Internet, with a closed, working meeting for the Global Voices community. The Global Voices Summit Schedule provides more details of the workshops, panels and plenary sessions. Register now to be part of this landmark event!