Wednesday, December 28, 2005

Web 2.0 mashup matrix

I've found myself explaining "mashups" to my less technically inclined friends. This matrix is a good way to show the various mashup permutations. Hat tip to Scott Maxwell for pointing this out.

Tuesday, December 27, 2005

What does Vinod Khosla know about Web 2.0 that others don't?

At the recent 2005 Web 2.0 conference, John Heileman had a discussion with Vinod Khosla of Sun and Kleiner Perkins fame to get his perspective on Web 2.0. There were quite a few summaries (audio here) of the conversation but they all missed a brief passing reference to Mark Leslie (a rare CEO of a tech company that shepherded a company from $0 revenue to well over $1B during his Veritas stint – there’s probably fewer than 10 tech CEOs in history that sat in the CEO seat for that period of growth). Khosla knows Mark well and is undoubtedly applying a blend of his insights into so-called Web 2.0 dynamic with the principles that Leslie is espousing.

His quote was “My friend Mark Leslie, founder of Veritas Software, says that the more money you give a company to start with, the less likely it is to be successful. The more money the founders have, the more confident they get about their business plan, the less they experiment.” He goes on, “The right way to build a company is to experiment in lots of small ways, so that you have plenty of room to make mistakes and change strategies.” Mark has been working with Charles Holloway (one of the foremost academics in the field of entrepreneurial studies who has sat in the Kleiner Perkins endowed chair at Stanford for several years) over the last couple years on what they’ve referred to as the Enterprise Sales Learning Curve (ESLC). You can review an early draft of his whitepaper and a presentation he gave at an Altus Alliance CEO briefing. You should expect to see his paper published in the 1st half of 2006 – reading the draft will give you the essence and it has been very well received.

We have been fortunate to work with Mark as we’ve developed a practice around the ESLC and he has tremendous insights into selling into the enterprise which is something he had great success with while leading Veritas. One of the fundamental tenets of Leslie’s paper is that the risk in startups has shifted from primarily a technology to a go-to-market risk due to the fact that development tools have improved so dramatically. As anyone knows that’s been trying to sell into businesses know, the go-to-market approaches that work have shifted quite a bit over the years. Since Leslie’s paper focused primarily on traditional selling methods to enterprises, I thought it would be useful to analyze what may need to change in this new world (some are calling it Web 2.0 dynamic). [Note: Traditional enterprise selling will still apply in plenty of situations. The point of this is that in many cases there may be a better or complementary approach.] Leslie makes the point that having too much money and not experimenting enough can be inhibitors to a company’s growth. Fortunately, many of the approaches that are applicable in this new environment lend themselves to not spending inordinate amounts of money as well as choosing tactics that lend themselves to lots of experimentation. For example, when I ran marketing teams selling enterprise software in the 90’s, we’d lock and load on a campaign several months ahead of time that might include tradeshows, print advertising, a seminar series and a media tour. Once we fixed our plan, there was relatively little that changed during that particular campaign as we’d already made our commitments to tradeshows, media spending, etc. (most lessons learned were applied in the following year). In today’s environment, it’s much more feasible to be nimble with Internet-based marketing that might include advertising, webinars, and influencer outreach so that you can achieve the experimentation that Leslie and Khosla espouse. In that spirit of experimentation, we are putting into practice several of the practices outlined in the right hand column below.


The following table is a comparison of some of the traditional vs. “Web 2.0” sales & marketing approaches with some links to useful resources to execute upon this approach:

Traditional Enterprise Sales/Marketing

“Web 2.0” Enterprise Sales & Marketing

Marketing strategy

Product marketing: Focus groups

Have a “conversation” via blogs (book, blog) and aggressively use web usage analytics

Awareness generation: Print advertising, direct mail

Internet media advertising (search, email, blogs, etc.)

Awareness generation: Media tours, Press releases

Influence the influencers

Demand generation: Tradeshows, Seminars

Thought leadership webinars

Sales Strategy

Direct sales to Business/I.T. Decision Makers

End run traditional buying processes to get consumer/end user adoption first building internal credibility and grassroots support

Hire high-powered direct sales force

Tightly integrate a telesales team with web leads to qualify (and close) leads

Target Fortune 500 as first customer

Pursue SMB market before Enterprise

Pipeline management

Web lead funnel management

Most of items in the “traditional” column were difficult for a startup to pull off due to the resource requirement. The good news is that most the items in the Web 2.0 column are feasible for smaller enterprises as aptly described by Seth Godin in his “Small is the new big” post.

Additional insights that are complementary to this thinking are also worth looking at.

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Monday, December 26, 2005

New Year's resolutions for Googlers

Google has enough Monday morning quarterbacks as it is so I’ll leave the business advice to others (for now). I bring two perspectives for my advice to Googlers on their life outside of Google.

  1. I was fortunate to work at Microsoft during a similar period of time that Google is experiencing right now – tremendous revenue growth, explosive stock, round-the-clock work ethic and tremendous influence over the technology industry. As Mark Twain said “History may not repeat itself, but it rhymes”. Both companies have also been very effective at making it very, very easy to stay at work as long as possible. Microsoft pioneered some of these approaches but Google has taken them to a new level.
  2. I was unfortunate to have had 6 friends/co-workers die at a young age (in their 20’s & 30’s) during my tenure at Microsoft. This puts work into perspective very quickly especially having seen the full continuum of people dying without regret to those who died with the clich├ęd deathbed regret of wishing they’d spent more time with their family and friends. The person on the latter end of the continuum was a Microsoft senior executive. He was a rare combination of a highly successful MSFT exec, close friend of Steve and Bill and also a great person that everyone I met who came in contact with loved to be around. While all of these situations were very sad, his was the saddest and most impactful for me personally when it came to how I looked at work.

So as Googlers (and for that matter just about anyone working in the high-tech industry) reflect on 2005 and plan for 2006, I’ll share a few words of wisdom that have worked well for me…

  1. Get a life. Eventually you’ll regret not having any identity outside of Google but even before then, it’s good to talk to “real” people who don’t live and breathe the industry. Not only does it make you a more interesting person, it is easy to fall into the trap of designing everything for fellow employees that don’t reflect the rest of the world. “Offline” experiences can often be inspiration for something executed online so turn off your computer and get out there.
  2. Establish a strategy of selling your GOOG stock on a regular basis. It’s essentially dollar cost averaging in reverse. It’s hard to do when it seems like the stock can only climb. The way I looked at it at the time was I saw how IBM was in the most dominant position in the industry at one time and had much more lock-in and dominance than Microsoft ever had yet it’s stock eventually came back down to earth. When that coming back down to earth happens is tough to predict. This regular selling process gave me a dispassionate approach to the stock as it often performed at odds with what I was seeing internally. I took some money off the table yet had plenty of MSFT to continue to ride it up if it went that direction. A related point was finding someone like Brian Vowinkel who has been a trusted financial advisor working within a firm where their interests are aligned with mine (somewhat unusual for many so-called “financial experts”). GOOG obviously won’t always go up and these approaches served me very well.
  3. Don’t let others define what success is for you. It can and should be different for everyone yet it’s easy in a strong culture to adopt others’ view of success. Living life without regret was the biggest takeaway when the 1st of my 6 friends died. She was the youngest of the bunch yet she truly died without regret doing more in 26 years than most do in a lifetime. One facet of my personal definition of success was disconnecting what I did professionally from where I lived physically. To that point, my career decisions were based largely on moving up the corporate ladder which I’d had good success at being one of the youngest Product Unit Managers in the company. From that point forward, I made some career decisions that were head-scratchers for some people as they didn’t know my gameplan. I didn’t care and it ultimately served me well. I’m living in the mountains yet am as engaged as I’ve been with the tech community as always (thanks Internet!).
  4. Work late only if that’s your “in the zone” time. I had an earlier post sharing my Uncle Bill’s words of wisdom upon his retirement as a Consumer Package Goods executive #6 on his list was “It is not important that you come in early and work late. The important thing is WHY?” Mark Lucovsky is an ex-Microsoftie now at Google that seems to think that working at 3 or 4am is some measure of success/passion. I disagree. Whether you are a developer, athlete or business person, there are times when you are “in the zone”. When you look back at the past year, there are usually 3-5 things you did exceptionally well when you were “in the zone” and those were the things that really made a difference. For me, those usually take place between 5 and 8am. I’m sure 3 or 4am is that time for others but I doubt that’s the case for most people. Don’t be a lemming and get caught up in the machismo of showing how late you can work. It’s results at whatever time that matter.
  5. Learn to throw a change-up and knuckleball. In baseball, many young pitchers get into the major leagues with a killer fastball. Likewise, younger tech workers often try a similar approach where they just “throw” with as much energy as possible. Brute force can work for awhile. Unfortunately, like in baseball, they will usually flame-out or burnout. Learning some finesse is the key to a long, successful career in baseball or tech. I saw lots of carnage at Microsoft where some of these former “fastballers” ran out of gas and became worthless to their team and to society.
  6. Read up on Emotional Intelligence. IQ matters but so does the notion of “EQ”. Lack of EQ led to many of the challenges people at Microsoft had (not to mention the company as a whole).
  7. Live by Kimo’s rules. These aren’t especially work/tech oriented but there are plenty of good life tips.

What other non-work suggestions would you give to a Googler? Brad Feld had some suggestions here.

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Sunday, December 18, 2005

Those *(#& pop-ups are back

Is anyone else getting more and more pop-ups sneaking through your pop-up blocker? I mainly use Firefox and Im getting pop-ups from companies (vermin, actually) like zedo and cassale. Know of any Firefox plug-ins that does a better job of blocking pop-ups? Ive used some of the big 3s toolbars that supposedly block pop-ups and still am getting pop-ups where I didnt before.

Tips out selling to the big guys ("GYM")

25hoursaday focuses on building a company to sell to GYM (aka Google, Yahoo, Microsoft). While I think it’s better to focus on building a company to sell your product to customers (and the exit will take care of itself later), it’s not a bad idea to consider what the big guys will think of how you’ve built your company. His advice:

 

If you are building a Web startup with the intention of flipping it to one of the majors, only three things matter; technology/IP, users and the quality of your technical team. Repeatedly ask yourself: Would Microsoft want our users? Would Google want our technology? Would Yahoo! want our people? It's as simple as that.

 

Given that Microsoft isn’t perceived as sexy to work for as Yahoo and Google, I’d emphasize the people aspect with Microsoft. If you have a strong/small team, it almost doesn’t matter what the technology they are working on (i.e., it could be duplicative of something in development internally). This is particularly true in the Bay Area where competition to hire is fierce.

Thursday, December 15, 2005

NDAs -- asking is a death sentence

With a few minor exceptions, every VC I've queried won't sign an NDA early in the vetting process. As a general rule, I won't sign an NDA until a company is a client. Whether I've signed a piece of paper or not, I jealously guard the information that an entrepreneur shares with me. My integrity/reputation is my product and it's a small community so it would be bad business to do otherwise not to mention against my personal ethics.

Bill Snow did a good job of capturing the issues in this post. Here are a few highlights:
  • In the pantheon of entrepreneurial mistakes, the NDA is right up there with the infamous line, “these projections are conservative.” Simply put, if you hope to raise money from VCs, you increase your chances of success by eschewing the NDA request. Most (if not all) VCs will not sign the darn things.
  • An entrepreneur who asks a VC to sign an NDA is unwittingly exposing himself as a rank amateur. Simply uttering the phrase “will you sign an NDA” is a virtual death sentence. VCs know there is usually an inverse relationship between the voracity of the NDA request and the strength of the deal.
  • If your plan is based on an idea so tenuous that merely hearing what you do (or plan to do) will cause grievous harm to your plan, you don’t have a plan. You have a pipe dream.