This is a guest post from Dominik Balogh

Operating a small business is very important for the big future of an entrepreneur. Even if the business only generates about the same profit in the early days or years as you would get in a normal job, it’s still worth all the risks and challenges. You’re forced to think, learn and expand your horizons infinitely. By not having enough money, you are feared. You have to be effective and do a lot of things on your own, which means you need to learn many new methods over a period of short time. I call it a “Benefit of the business doubt”, which always forces you to do better. Thanks to it, you can evolve 10 times faster in the first 2-5 years of your SB compared to all of the previous years. You also meet established business people, you learn how they think and what they expect, which you mostly can’t when being just an employee. Though there are some executive job positions which make perfect business sense and provide a comparable level of doubt or stock benefits, let’s skip it for now.

Some years back, I had to learn European accounting very quickly to manage it on my own. It was a nightmare at the time and I’m luckily not involved in accounting operative anymore, but thanks to the real experience, I’ve learned and understood some optimization tricks and other tweaks on a worldwide level, while fresh economy graduates are usually still hardly able to construct in their head, say, how VAT works and what it affects – and it’s unfortunately not so much of their fault, but the flawed HR and education system. It then struck you when a manager with MBA and 10+ years of job experience asks you about the elementary invoicing “issue”. But it also helps you realize that all the work was worth it even if you didn’t make much more money than in a so called “safe” job.

After my media, advertising and consulting business ramblings on my own, we’ve formed PoweryBase (now incorporated in CA) with my partner in crime, and we accepted a more difficult route of storing user data in the “cloud”. We started to find out what the mobile platform has to offer. We’ve made some incorrect decisions, some great decisions, didn’t prepare the best exit strategy from the beginning and found many drawbacks. We also didn’t market much due to focusing on development heavily. However, our products are great and have an interesting potential. Last but not least, users love them and use them almost every day. Thanks to the data we own, there are still many opportunities to push the business models further.

But the more important fact is, we’ve learned so much from our solution in just a year, and we’ll also use that experience in more complex projects. Server side services, databases, geo-data, syncing multiple mobile devices live, notification systems and users’ feedback on syncing experience is a valuable knowledge you need today to build interesting products. You can hire many kinds of skilled people, but you can’t hire your own real life solution experience. You see more options, you learn technological limits, various approaches, and you can make better decisions in the near future. What sounds very easy is really not, because small details and new features in the service may highly affect the software + hardware operating costs overall. Even with today’s very cheap highly scalable storage solutions. Managing or reading technical support requests of your customers for a period of time also teaches you what customers really need.

There’s always the benefit of business doubt, no matter who you are and how far you are. Sometimes it’s even smart to do stupid decisions and jump into the waters in which you have no knowledge of, because it’s going to force you to learn about it and you’ll be more smarter next time. There’s always much more to learn, and I’m often wrong in many things, but experience from managing a small business always proved itself to be a very valuable experience in life.

After signing the contract with Sandbox Network, we had lunch together with the Sandbox Zurich Headquarters Team in Restaurant Kreis 6. It was the Kickoff of our cooperation.

The whole Centralway Team is looking forward to a successful partnership with Sandbox.

We are proud to announce that we have taken a minority participation in Sandbox, a social entreprise running a community for young entrepreneurial leaders under 30.

Sandbox is an exclusive community that selects the most inspiring young achievers and innovators under 30 worldwide and connects them to each other. It offers them a trusted environment (online and offline) where they can build meaningful relationships, learn from each other and get access to resources that help them realize their next big idea. The network currently counts 450 members from 40 different countries, who are connected through an online platform and who meet in real life at monthly events happening in 20 hubs and on 4 continents.

Sandbox currently finances its activities by offering community-based consulting services to corporate clients. By working with selected members from the network, the company helps organizations to develop innovative solutions and identify new opportunities. Past clients include a major European city, Frankfurt airport, Volkswagen, and a global investment bank. From these diverse projects, Sandbox has built expertise in social media and in leadership development.

In the next two years, Sandbox will launch a series of strategic initiatives: organize a global Summit, build up an editorial team, provide mentorships with senior leaders, build an active alumni community and set up a seed fund that will invest in members’ projects.

Sandbox has a team of 10 and is headquartered in Zurich, with offices in Zurich and in New York. The founding team has a very diverse background and a track record of achievements:

- Antoine Verdon, 27, CEO, has a Master in Law and was elected at 20 years old as the youngest member ever of the Parliament in his home city, Lausanne.

- Nico Luchsinger, 28, Head of Business Development, has a degree in medieval history, organized Switzerland’s largest student party for several years and opened a bar in Zurich at age 17.

- Christian Busch, 26, Head of Community Development, is currently writing a PhD work on networks and social entrepreneurship at the London School of Economics

- Fabian Pfortmüller, 28, Head of Sandbox US, has worked for XING in Hamburg where he built an offline network from scratch for the social networking site and is currently finishing his studies at Columbia University in New York.

- Severin Jan Rüegger, 27, CFO, has a Master of Management from the London School of Economics and works from Singapore on Sandbox and two other start-ups he founded recently.

Centralway and Sandbox will develop synergies at different levels, ranging from inspiration and communication to concrete contribution to some members’ projects.

Testing software, a tool, or a website is an essential process to ensure high quality in the development process. Testing helps you get a correct, complete and securely functioning product. In general, the procedure during development is to run the product and find errors. Simple? Not at all.

The testing procedure is the key to guaranteeing the creation of a high quality product, and this procedure should be of high priority. Running the product several times and checking if it works, is not enough.

Extensive testing means having a detailed scheme and designed test cases. This effort should go into preparing the test scenarios as it goes into developing the product and preparing the specification documents. In my honest opinion, testing is the most important part of product development.

Many different tools and different techniques can be used to test a product. I will name two popular test design methods: black box and white box. The difference between black box testing, which looks at the product from an external view, and white box testing, which looks at it from an internal view, is that a black box tester is a developer who has no knowledge of the product’s source code, while a white box tester is someone who has participated in the development phase and has good knowledge of the source code.

For me, this “four-eye-principle” is crucial to the development of a high-quality product. The developer who works on the product all the time has a different view of the product than someone who is using it for the first time. The mix spots it out, in correspondence with accuracy, patience and a considered scheme.

AirPort Express is built for mobility, so you can create an instant wireless network at your hotel, job site, or wherever you need one.

Do you know one of these situations when you go in a hotel and you don‘t have free WiFi access in your room? Just plug your Airport Express into a Ethernet cable and you have free WiFi access everywhere in your room, you can even install a printer if you need one. And costs only 99$

A few weeks ago, the Centralway team went to Graubünden. After we settled down, in our hotel rooms, we tried to connect to the Internet with our iPads. We recognized that we got to pay for WiFi, luckily we took our Airport Express with us and connected it with the Ethernet cable. Airport Express allows to connect up to 10 users. Since we are only three, there is no problem everyone is connecting to one Airport Express.

We can only recommend it.
Airport Express

Venture Capital has always had a great influence upon the decisions of founders and entrepreneurs. The influence was also justified. If an investor invests money in entrepreneurs’ ideas, it risks losing its entire capital invested. It invests in the truest sense of the expression “venture capital”. In return for its capital investment, it receives shares in the company, rights of co-determination and the right to receive dividends. In almost all cases known to me, it also receives significant rights of co-determination concerning when and how it may sell its shares again and regarding the most important personnel decisions.

That was the deal. It worked, and produced many wonderful companies, new jobs and profits for the investors. However, the rules of the game are changing. They are in fact changing gradually, but constantly.

What has changed?

1. Less capital = less influence

Today much less capital is required to establish a company. The less capital that is necessary, the fewer shares there are, and thus the investors have correspondingly less influence. In many cases the entrepreneurs can also procure the necessary funding from their private circles – therefore they do not require any external investors at all.

2. Stupid money versus smart money

It is not enough only to invest money. What is needed is investors who understand the products, the customers and the market. No investment fund manager is needed to assist foursquare.com or seznam.cz. The traditional investor has no idea about the products. Such an investor does not even know how the product is created, does not know the customers, and does not understand how the product can be improved. Phrases such as “time to market”, “post money” or “added value” describe the activities with which a traditional investor is involved. Phrases, silly phrases.

What is required is investors who know the products and understand the customers: entrepreneurs who have a good idea what it is all about and can assist other companies, who can complete specific tasks. Business angels are a good place to start, however what they can do is limited.

Times are changing in favour of entrepreneurs, people who know what they are doing and investors with smart money. If you make mistakes, you will lose your money, and in fact your own money.

First of all I would like to mention that the terms Web 1.0, Web 2.0 are just terms created for marketing reasons. There is no explicit official definition of these terms. Nevertheless I would like to answer the question what Web 3.0 is and what Web 1.0 and Web 2.0 were.

The way I want to compare the web phases is by looking at the design, and how it changed over the course of time.

At the beginning of the web, the browser supply as well as the features were very poor. There was mainly mosaic/netscape and therefore only few possibilities how to customize a website, no css, no ajax, no flash, just far from awesome effects with < blink > and < marquee > HTML tags. Web 1.0 was mainly dominated by static pages, framesets and GIF Buttons.

By contrast, Web 2.0 offered a lot more possibilities to customize a website’s design and the amount of Browsers increased. Constantly growing css versions and the usage of ajax and flash made the websites to what is called Web 2.0 style – a lot of twinkle and scrollwork. But in most cases there was nothing, respectively not much behind it. A lot websites just wanted to catch the user with nice looking designs rather than with high quality content.

Now, what is Web 3.0 and what is the difference?
Web 3.0 is back to the basics. Web 3.0 is plain but good looking – it is not overloaded. High quality content is the primary focus. Web 3.0 is multi-device-compatible. It is reduced to the core – though the mobile bandwidth is increasing. Technologies like Ajax or HTML5 are used to give the user the most efficient usability and not the best looking design.

Web 3.0 is not introduced everywhere and in everyone’s head, yet. But it is just a question of time and I am looking forward to it, because then I will know again where I stand with it.

The Prague-based movie database fdb.cz has hired a new Project Manager, in order to deal with the expected continuation of growth. The 22 year old Mr. Radek Kubica, will prospectively take over the operative management and will support the three shareholders Pavel Matousek, Martin Matousek and Centralway in their work.

Radek Kubica comes up with a lot of good new ideas and will support the success of fdb.cz. The Centralway Team will meet Mr. Kubica at the beginning of September, in our Hangar in Zug (Switzerland), to discuss the next strategical Milestones.

The whole Centralway Team would like to wish Mr. Kubica all the best for his start at fdb.cz

This is a guest post from Dominik Balogh

The market is hungry for the next big thing. Obviously, nobody knows what’s the next big thing until already everybody knows it is. Investors bet on their instinct and do the trial and error business.

Let’s try to define what “the next big thing” could actually mean. A product which is:

• public
• for everybody who can use a piece of electronics with a network connection
• can scale extremely well right now
• can generate almost obnoxious revenue within 5 years
• can return 20+ times of the original amount invested

On-demand digital streaming, music, video, news with rich content, network TVs, YouTube, mobile devices, they are all a part of the next big thing. But in the jargon, even though their market is currently very large and fresh, it’s not “big enough” by the terms of our definition.

There’s no way you can turn on your TV or home stereo today, a display in a car or an app on a mobile device and enjoy any digital content by universal standards. Why?

What all of these businesses have in common is that they can’t scale well and fast enough in the current world’s establishment. They are tightly controlled or legally challenged by a very few, mostly very old fashioned vendors. If not by them, then by bureaucracy, lobbying, governments, currencies, country borders, restrictions, regulations, policies, standards and copyrights.

Yes, tons of money has been made already, but still just a pathetic amount compared to the true today’s potential. Committed players are fighting their way for the sake of advantage which they’ll own when the world changes, such as iTunes, Hulu, or even YouTube. All great services which altered the business, but it’s a slow industry transformation, not an instant game changer with a clear road ahead. Much of the credit goes to Steve Jobs, but even him and all of the young geniuses are forceless. It’s very similar with the new sources of energy. Until people’s hearts are not touched anymore by the sound of a 6 liter gasoline racing engine, until new kids are born, until some companies disappear — or until the world changes rapidly — it just won’t scale.

Neither social networks are the winners, because their original concept is not for everybody and because of the prejudice of older generations. A typical computer-aware grandmother may use Google and click on AdWords even without having an e-mail address, but the current social network concept is designed by young people for the young people. It’s a little beyond the possibilities of grandma’s thinking.

Social networks work because you can find people there, that’s the whole idea. If everybody’s account would be private and prone to search and nobody would use a photo (having a friend named John Smith, good luck finding him without a picture), there would be no reason to go searching for a non-existent, hidden friend. However providers work on user privacy preferences, they default them to a configuration which won’t close their business while hoping not too many people will change it. Even Eric Schmidt is concerned enough to consider suggesting current teenagers to change their name in the adulthood. Still, social networks analyze user data for targeting just as many other providers do, so if you’d like to maintain your privacy, you better not use the internet. All people will slowly adapt to the new definition of personal privacy just as we’ve adapted to everything. But however amazingly fast-growing social networks are, they are still too complicated and slow by the terms of our definition.

Maybe the next big thing is not a single product. It could be an era, more of a part of everything we are establishing today, but much more integrated, connected via APIs and standardized. Digital media, mass social networks, electronic wallets an IDs, cloud operating systems, location awareness, worldwide business directories, gathered people’s habits, linkings and preferences. Data and tools available to users anywhere based on what they prefer, what they’re doing and where they are with much less bureaucratic limitations. We’re on the edge of slow transformation of many industries into a set of smart services from multiple companies, with business methods beyond the current possibilities. Google has the best chances to lead thanks to their gathering & targeting business strategy which they’ve been pursuing since 2001.

But they are not the only one, and they can’t acquire the whole internet and the whole mobile market.

The blog post you are reading now is the first which is only available in English.

We gave this a lot of thought and considered the pros and cons during numerous discussions. This issue has been ongoing for quite a while and has been picked up time and time again.

The most important argument was the lack of flexibility when publishing new blog contributions. Our blog posts were primarily drawn up in the German language. Then they first had to be translated into two further languages. This delay meant that each blog could only be published two days later. However, in most cases, it is particularly speed and topicality which are an essential criteria for a successful blog.

Nearly all readers of our blog understand English and our subjects are virtually always geared towards an international readership.

We hope that we can keep all our readers and that by offering you a higher level of relevance we can also bring you visible advantages in the future.

Your Centralway Team

Centralway has already existed for 11 years, which is quite a long time in the world of internet.

For 11 years we’ve been investing exclusively into internet companies and into companies of excellent entrepreneurs.

For 11 years we’ve been operating independently, without any fund, bank or investor to back us up, using only our own money.

For 11 years we’ve been criticized, challenged and constantly told that what we are doing is wrong and that we cannot go on like that.

For 11 years, whenever we sold a company, we’ve been told: “We would have managed without you.”

For 11 years we’ve been told by investment bankers that we’d never been so successful without their services.

For 11 years we’ve been criticized by journalists for not being transparent enough and for not communicating more.

For 11 years we’ve been told by company founders, managers and developers that we don’t know the ropes therefore won’t be successful.

For 11 years we’ve been told that we’ve only been lucky and good at deceiving young naive entrepreneurs.

This is our message to all critics, wiseacres, complainers and softheads:

You cannot be only lucky for 11 years. There is nothing like 11 years of chance. And it’s silly to think that one doesn’t know what one has been doing for 11 years.

On 1 September 2010 we are starting another 11-year period. Maybe someone won’t like it again. There is only one answer to that:

You can go the right way, you can go the left way, but it exist only one Centralway.

Two months have passed since our last correspondence in this matter. We have been provided interesting feedback and we all have asked ourselves questions and discussed with others. In early July we spent several days in Engadin to reflect all our experience and impressions in our manifesto.

We have been living our manifesto over 10 years and yet we have never been actually aware of what exactly our policy contained. We simply lived it. Now the time has come to put our policy into words and make it transparent to us and our partners. Here is the final version:

1. The Best

Centralway only concentrates on fulfilling its mission of having interest in the world’s best web-based companies, further developing these companies and selling them at the best price.

2. Simplicity

“If you can’t explain it simply, you don’t understand it well enough.”, Albert Einstein.

This is exactly why there are no meetings, no controlling, no Excel spreadsheets, no PowerPoint presentations, no redundant deadlines, no confusing technical jargon, no long discussions, no humiliation and no pessimism.

3. Independence

Decisions as to in which companies we will have interest must be made on the basis of freedom. That is why no fund, no bank or no financial investor has any interest in Centralway.

4. Entrepreneurs Only

Centralway is run by entrepreneurs and it enters only companies that run by entrepreneurs.

5. We Eat What We Have Cooked

Every investment is carried out with our own money. If we fail to reach the goal, we lose our own money. That is the best precondition for making the right decisions.

6. No Operative Management

We do not interfere in the operative management of companies in which we are involved. Instead we focus only on the strategy, on our joint goal to build an excellently working company and then sell it at the best price possible.

7. Contracts

There are no complicated contracts and no small-print texts; each person that has a stake can make free decisions.

8. Speed

A good plan today is better than a perfect one tomorrow. The speed of accomplishing our goals is substantial to us.

Flipboard is completely changing the rules of the game. Perfect for Apple iPad, this application is free of charge and downloadable through the App Store.

Flipboard is a magazine of the age of social networks. It downloads all information from Twitter, Facebook, blogs, and other web pages. Renowned media such as New York Times are naturally also included. Using all these sources, it compiles the contents for your personal magazine with a highly appealing layout. In addition, it updates the contents in real time. That means that while you are reading the news and information in Flipboard and one of your Facebook friends sends you a message, the message immediately downloads to Flipboard.

The secret of its success lies in its layout, which brings a brand new experience to Internet users. While based on the classical layout of newspapers, it is greatly adapted to the options of the multi-touch iPad.

Flipboard presents the contents democratically. A favourite blog is displayed as appealingly as the latest article from New York Times. Techcrunch appears next to Wired and side by side to a specialized blog by Robert Scoble.

Flipboard poses a new challenge for the classic media. There is no reason to pay for magazines through App Store by Apple. Now it is simply Flipboard and good content that you can download for free from the Internet.

Wish we had participated in Flipboard, too

I am very pleased to announce to you today a successful exit of Centralway. Centralway has sold all its shares in BrainsToVentures AG for an attractive price. The buyer is BrainsToVentures AG itself, respectively the new shareholder.

I, as Centralway, was one of the founding partners. Together with the large Swiss bank UBS AG and Price Waterhouse Coopers (PWC), Business Angels and the executive, Florian Schweitzer, we made BrainsToVentures AG what it is today: the leading network of Business Angels in German-speaking countries and one of the most successful investment companies for young businesses.

We are proud that Centralway facilitated and allowed BrainsToVentures AG to achieve the following milestones:

• The first round of financing in 2000.
• The nomination of Joachim Schoss for Business Angel of the year in 2002.
• Mediation for Altium Capital to become exclusive partner (I still remember the scepticism on the part of Altium Capital ).
• Nomination of Alexander Grünwald as a member of the board of directors.

We wish Mr. Schweitzer and his entire team all the best for the future. And I am sure that we will hear plenty more positive things about BrainsToVentures. Mr. Schweitzer is an extraordinarily successful networker and a guarantee of success.

After nearly a year of successful collaboration with HyperMedia a.s., Centralway and the founders Petr Beneš and Jan Šmidák wish to announce that Centralway has sold its 34% share in HyperMedia a.s. The parties have agreed to keep the selling price confidential by making appropriate arrangements in a confidentiality statement.

Centralway was working with HyperMedia a.s. nearly one year and marked a new path for future expansion. It is a good example of how professional management (Petr Beneš and Jan Šmidák) can deliver successful and quick results. The rising upswing made the sale of the share in HyperMedia a.s. a perfect timing.

The kickoff meeting was held in Switzerland as early as two days after Centralway acquired a share in HyperMedia a.s. in 2009. Milestones for the further steps required were defined at this meeting, where emphasis was put on expansion. That was why Centralway bought the hyper.eu internet domain. We sold this domain to HyperMedia a.s.

The company is well prepared for the years to come and we are sure that the management will continue in doing a good job. Martin Saidler is to resign from the supervisory board of HyperMedia a.s. as a result of the sale of shares. David Dostal spent last two weeks in Prague to supervise this process and its successful completion.

Let us take this opportunity to thank Petr Beneš and Jan Šmidák for good and professional collaboration and we wish HyperMedia continuing success.

Holiday and vacation time has already begun in almost all of our key markets, so even here at Centralway, we are occasionally going to take a few days off to enjoy the sun and summer. We expect that the posts and activities on our blog will be a little less intensive for some time.

In general terms, almost all web projects in the northern hemisphere undergo the same seasonal cycle. In many projects, the period from January to mid-June is a period of strong growth. There is a decline from mid-June and stagnation until August. In mid-September, signs of growth reappear and the growth culminates in the autumn when everyone is back in the office again.

On behalf of everyone at Centralway: Enjoy your holiday and vacation!

A new forum was activated on centralway.com/forum two days ago. In this forum, we would like to provide our users with space to discuss everything related to investments in the Internet. These include, for example, questions and commentaries related to company shareholding, the sale of businesses or the issues of business strategic development. The forum is open to all topics. The Centralway team will take part in the discussions and will respond to the questions.

Why did we launch this forum? Every day, we receive both general and specialized questions, answers to which may be interesting for everyone. Moreover, we would like to enable the readers of our blog to create their own topics and learn about opinions of like-minded people.

Each topic can be responded to in line with a defined hierarchy. All site visitors can read the posts but in order to create topics or respond to questions you need to register or log in. Everything is really simple.

I would like to invite all readers of our blog to participate in our forum with their interesting contributions. I look forward to interesting and lively discussions.

I have been a proud owner of a new iPhone 4 for three days. Because it will not be marketed in Switzerland before the end of July, we had to buy it in the UK. My first impression: Fantastic!

The quality of the new display exceeded all my expectations. Reading longer texts on this small display is a real pleasure. Even the quality of the camera is exceptionally good. I will now test the new iPhone 4 and will share my impressions with you in a few days.

1. Welcome Page
The welcome page informs the users on what they can expect on the website. This information should be attractive enough to make the users to register. Its substantial reduction, which is the case, for instance, of Facebook opening web page, is dangerous, as the users are not given information regarding the advantages of their registration. Such an attitude can take only those who can largely rely on recommendation.

2. Registration
Registration of a new user should not be difficult with as little personal data required as possible. Users can make changes to their profile after registration. Buttons for registration and login should be situated in the top right hand corner.

3. Search
This point should have been put in the first place, as in my opinion it is of the utmost importance. The search box should be spotted immediately. Its functioning should be smooth. The presentation of the search results should enable the users to identify what and where they are looking for.

4. Forum
Forum makes an essential and significant part of each social media web site. Forum should be well-arranged and user friendly. The search according to the forum articles, users, tags or categories is of primary significance for unfolding.

5. Find Friends
Each social media web page should enable the users to find the people they know, or share interests with, quickly and easily. Finding “friends“ easily will be the momentum for the social web page development and its active usage by the users.

6. Navigation Menu
Navigation also plays an important part. I have seen navigation designed using impressive flash effects, but computers with flash deactivated showed none of that. This also relates to iPhone and iPad without flash support. Navigation, as the basic feature of each web site, should be intuitive, informing the users on their current location.

7. Interaction with Users
Chats, comments and private messages should be available for each user on each page of the social media web site. Complementary features, such as notice boards or status messages, are also widely used. Connection to Twitter, for instance, also increases the frequency of new contributions and keeps the profile updated.

8. User Profile
Users should be able to change some settings in their profiles. Apart from the security settings, users should also be given the opportunity to modify their profile according to their personal taste. Nevertheless, despite the opportunities of personal arrangement, using photographs, videos and pictures on the background, the overall design of the platform should be preserved.

The market of iPad accessories has exploded. Sure, the original Apple iPad Case, is maybe enough – and probably more efficient. But those who have their iPod as their “most beloved toy” will want to use accessories according to their wishes.

Here is a short list of my most favourite gadgets:

• www.etsy.com/shop/valentinashands
• www.etsy.com/shop/peoplecallmeliv
• www.versaudio.com
• www.clamcase.com
• www.scottevest.com/company/ipad.shtml
• www.etsy.com/shop/yummypocket
• www.substrata.net
• www.thinkgeek.com/stuff/41/iCade.shtml
• www.etsy.com/shop/BraveMoonman
• www.ohnodoom.com/ibap