Chase Market Velocity

Bruce C

2009-11-02T13:50:00.001-07:00

Intro text before embed code

Joseph J

2009-11-01T13:40:00.002-07:00

Test text before embed

When is the time right for Renaissance vs. Coin-operated Sales?

2008-09-19T06:21:00.001-06:00

I’m posting more frequently on Altus Alliance’s blog. Here’s a link to my latest post over there -- When is the time right for Renaissance vs. Coin-operated Sales?

Prospect Theory trumps "Economic Man"

2008-05-28T09:20:00.001-06:00

This post talks about multiple research examples that strongly indicate people choose guaranteed small benefit over a non-guaranteed but potentially large benefit. Interestingly, this only applies to decisions not based purely on the math and probabilities.

"This experiment, repeated again and again by many researchers, across ages, genders, cultures and even species, rocked economics, yielded the same result. Directly contradicting the traditional idea of "economic man”, Prospect Theory recognizes that people have subjective values for gains and losses. We have evolved a cognitive bias: a pair of heuristics. One, a sure gain is better than a chance at a greater gain, or "A bird in the hand is worth two in the bush." And two, a sure loss is worse than a chance at a greater loss, or "Run away and live to fight another day." Of course, these are not rigid rules. Only a fool would take a sure $100 over a 50 percent chance at $1,000,000. But all things being equal, we tend to be risk-adverse when it comes to gains and risk-seeking when it comes to losses.

I can see how this applies in some of the partnerships that I strike. For example, if I’m working on a revenue share deal I could offer a guaranteed payment or we could do a straight split (e.g., 50/50) of revenue that came in. Even though it may be the majority of the cases would result in a greater payment to the partner, I could see how they’d prefer that my company take on the margin risk. Let me make this more concrete. Let’s say I have a widget to sell that we can predict should fetch at least $100 and where the partner would be happy with $50 out of every unit sold. In reality, it may be that I can sell that widget for $120 some times and $75 other times. As long as I believed I could net north of $50 of margin per sale, I’d go with the flat fee to the partner and they’d probably be happier that way.

I know of a real world example in the travel industry. Most vacation property managers pay a set percentage of the rental fee they collect (separate from direct costs). There’s a property manager who runs one of the best property management firms out there who takes a different approach. They have worked out an arrangement where they pay a fixed per night fee to their property owners. It turns out that they are good at yield management so they are able to get a much better financial return by paying the fixed amount. Both parties are happy.

GM gives $1.5B jolt to online advertising

2008-03-26T07:17:00.000-06:00

From Media Buyer/Planner:

“GM, in what could signal a no-look-back shift to digital marketing, will dedicate half of its $3 billion budget to digital and one-to-one marketing in the next three years. As the country’s third largest advertiser, GM’s switch may be the online marketing shot heard round the automotive world.

The news is not good for traditional media and may be exacerbated by a directive from GM’s Brent Dewar, vp-field sales, service and parts in North America. Dewar told Ad Age late last year that the auto maker will try to persuade its regional dealer ad groups “to shift their focus to digital vs. spot TV” starting this spring after the dealer co-ops, which spend $500 million annually, are revamped.

Other car makers are also upping online buys; Hyundai will double its online spending in 2008 over 2007.

Auto dealers are increasingly shifting their spend to online, with a particular focus on customer ratings and reviews and online video. 59 percent of dealers say they plan to use video on their own websites within the next 12 months, up from the current 33 percent.”

One of the more unique Keiretsu Forum companies - Banshee Riverboards

2008-03-24T07:31:00.002-06:00

This company out of Boise is popularizing a new sport called riverboarding. Banshee Riverboards received much of their funding from Keiretsu Forum members. Check out the demos of their product below.

Google: The world's largest ad agency

2008-03-07T12:33:00.000-07:00

I wrote a series over 3 years ago for iMediaConnection.com where I explored the advertising market in 2010. One piece of this predicted that Google would be the largest ad agency by 2010. So far, it looks like most of what I wrote is playing out. Here’s a look back at that segment of the series.

In the third of three parts, Dave Chase of the Altus Alliance predicts that in five years Google will be the world's biggest ad agency.

Editor's Note: In part one of this short series, Dave Chase explored where interactive media and marketing will be in five years, and described the media consumption habits of a hypothetical married couple, Mike and Jill. Then, in part two, he discussed the backend technology that could serve ads to the couple.

Will Google be the biggest ad agency in the world by 2010?

In part one, I laid out a future of how internet-based advertising models will pervade the TV world. If you buy it, then changes will inevitably happen in the ad industry. I predict that Google will be the largest “ad agency” in the world by 2010.

Dramatic industry shifts usually don’t happen from obvious places. Ample evidence of that exists, whether you look at the music business, the encyclopedia business, the newspaper classified business, the retailing business or many others. Companies that too narrowly define their competition inevitably have their business cratered from unexpected places. Aggressive, growth-oriented companies -- Google and Wal-Mart are just two examples -- don’t care about pre-existing industry dividing lines. If it weren't them, some other organization would gladly eat away at incumbents’ businesses, even though the leaders of the change are attractive bogeymen for those under attack.

If you take a step back, the purpose of ads and search are to connect buyers with someone selling what buyers want (even if they don’t know they want it yet). In both cases, fees are collected from the people who have something to sell for connecting them with buyers of those items. No one is rushing to categorize Google as an ad agency -- “they’re in the search business.”

You don’t have to study Google very hard to realize they aren’t limiting themselves to the “search business,” which is increasingly hard to define in any case. It’s important to recognize that Google isn’t charging for search: their income comes from advertising. As the old saying goes, if it looks and quacks like a duck, it is a duck. If they were considered an ad agency, they’d already be in the top five with a much stronger trajectory than any of the top five agencies.

You may be saying, “Wait a minute, they are more like a media outlet than an ad agency” (which is largely true today), but withhold judgment for a moment and some interesting insights can be drawn. To begin with, they are already doing media planning if the business has a high volume of clicks and it’s highly likely they are working on ways to make that easier (and thus scale to smaller advertisers).

If I walked into most offices of the leaders of the largest ad agencies in the world today and stated that Google/Yahoo!/MSN are their competitors, at best I’d get a polite laugh. They may say that I don’t “get” the ad agency business. Having been on both sides of the challenger/incumbent equation, I can say unequivocally that not “getting it” is usually an advantage for the challenger. The challenger isn’t shackled by the current way of thinking or, perhaps more importantly, the current business model. Like virtually every other company (especially a public company), Google and “their competitors” are inspired by what will make them the largest sum of money. Today, Google’s revenues are advertising-based, but tomorrow they may have increasingly more characteristics associated with the agency business.

Comparing some of the assets that agencies have versus Google is instructive. I’ll put these in context of some of the criteria I used to evaluate the ad agencies that I worked with when I held large ad budgets.

1. Efficiency with my budget: When my team owned the relationship/budget with an agency, I counseled them to look for padding and inefficiencies as the model shifted from a commission-based model (which had its own issues) to a salary multiplier. The latter seemed like a fair approach, based upon the number of people on the account. Furthermore, it was hard to know how well the agency negotiated with media outlets to get the best CPMs. With Google’s Adwords, you bid on how much you are willing to pay for a click that can range from pennies to dollars depending on the term. Google has a great feature where if you bid $1.50 for a click and the next highest bidder is $0.75, they’ll adjust what they charge you to $0.76. This looks like a more efficient way of spending my ad dollars and infinitely more trackable.

2. Consumer insight/research: I’ve worked with some fabulous media buyers and account planners. Their ability to dive into various syndicated research to identify the media properties with the optimal demo/psycho-graphics often impressed me. However, when you combine the almost unbelievable volumes of click behavior -- across many thousands of websites -- it provides a robust picture of brand motivation and preferences. It’s an approach that virtually any cold-blooded capitalist selling stuff would appreciate, and it is unrivaled by other means of capturing actual buyer behavior.

3. Ability to reach my target buyers where they live: Google’s Adsense offering (i.e., syndication of their contextual search ads) has major implications and makes them look an awful lot like a media agency. Not only does Google serve up ads on their own high-traffic site, they are syndicating their ads to virtually every nook and cranny of the web. As an advertiser, it gives them an efficient way to reach into highly targeted sites that would be impossible to buy in a manual manner. Anecdotally, I’m seeing Google ads on all kinds of obscure and relatively low traffic sites that happen to be highly relevant to me professionally or personally.

4. Ability to service local, regional and international markets: This has at least two dimensions: First, can you run particular ads for people who live in particular geographies whether that is England, New England or Boston? Second, is it easy to localize the advertisements themselves? Particularly on the first point, it’s much easier to do this with Google than the machinations an agency has to go through to make it happen (e.g., working with dozens of different media outlets around the country/world). On the second point, it’s comparing apples and oranges since localization of text ads is easy compared to localization of ads that involve more than simple text. That said, they cover many languages and countries today, so it’s a straightforward process.

5. Focus on driving results vs. their ego: Since much of the execution of a campaign on Google is strictly driven by machines, there is no ego involved. From time to time, one runs up against this dynamic with agency creatives where they are more focused on winning awards than selling your product.

6. Creative work: This is an area where it would appear that agencies have a clear advantage if for no other reason than that the creative palette is limited with Google today. If you look at some of the trends outlined in part one -- combined with increased bandwidth and broadband penetration in the next five years -- it seems inevitable that the creative palette Google provides won’t be so limited. The advantage Google has in this scenario? Its cost to launch and test a new campaign is low, so creatives can refine their creative and copy while avoiding the high stakes and slow turnaround of typical campaigns of today. Such campaigns frequently get bogged down by approvals at the client level. This quick turnaround should shift creatives perspective from a) thinking of how limited their palette is to b) relishing the opportunity to get immediate feedback on campaign ideas that may be conceived of, executed and killed/expanded in less than a day.

7. Account service: This is an area where agencies should maintain a clear advantage for the foreseeable future, as people-oriented service is a core part of their value proposition. As Google and others gain an increasing share of their customers’ wallets, there will be an expectation of increased account service for large accounts. In a competitive market, Google will respond if Yahoo! or MSN try to offer better service. This factor can diminish the inherent advantage agencies have.

8. Media neutrality: Most agencies like to claim media-neutrality, but it’s virtually impossible to find in practice. The core obstacle is that the client’s budgets aren’t media neutral. There are often different teams, let alone different budgets for different media -- print, online, broadcast, etc. This makes it difficult for agencies to be media neutral. The philosophy behind Google’s technology is media neutral. It just so happens that it’s all executed on HTML web pages right now. Take the notion of delivering ads in the content you prefer to consume, on the device (PC, mobile device, etc.) you happen to be using at the moment and delivering the most relevant ad at the moment you consume it and extend it beyond online. It’s not hard to imagine this happening when your TV and radio have their own IP addresses along with your more traditional computing devices (this is already in process).

9. CRM: Marketers and agencies working on their behalf spend large sums of money to create and maintain an accurate customer database that helps paint a picture of their customers’ behaviors, likes and dislikes, demographics et cetera. It’s not unusual for a marketer to spend millions each year simply keeping their database up to date with basic information such as addresses. Meanwhile, Google’s customers do much of the maintenance work themselves as their cookies capture every web search, links you clicked on and when you did it. One area that Yahoo! and MSN have a clear advantage over Google is a much larger database of demographic information via their email/IM users (certainly one of the drivers for Google launching Gmail to much fanfare). Combine the demographic information with the surfing and searching behavior, and there isn’t an agency in the world that wouldn’t die to get their hands on that rich picture of their clients’ customers.

Conclusion

Is Google explicitly out to get the agencies’ business? Unlikely. It just so happens that when you look at the natural progression of their activities, it ends up dramatically impacting the agency business. The ironic thing is that Google is -- with complete sincerity -- probably spending significant sales and marketing resources to cultivate agency relationships. Like many other successful businesses, over time they will have more and more channel conflict where parties who were previously 100 percent complementary, and thus start to step on each other's toes. In the end, Google won’t look like an ad agency any more than eBay or Craigslist look like a newspaper classifieds business, but they will capture money from the same customers as the business that they are pilfering. It’s the agency leaders that should ask themselves what facets of Google’s business they need to develop or co-opt. Agency leaders would be wise to make sure they don’t have blinders on regarding their current business and their partners, or they are liable to be victims of an inevitable force.

Lipstick on a Pig

2008-02-01T16:58:00.000-07:00

My first experience working on a web-based media property was in 1995 at the dawn of the commercial Internet. I was one of the original members of the Sidewalk team that swelled to over 300 at one time. My original job was striking partnering deals with newspaper and other print partners which provided me a great education on the media business and print media, in particular. We genuinely wanted to strike favorable deals with them but most looked at Microsoft with great suspicion as Microsoft was reaching the height of its power so we couldn't expand as fast as we would have liked and contributing to an unfavorable financial picture. To the potential partners, they thought that we were putting lipstick on the Microsoft pig.

Despite the fact that I worked for the deepest pockets in the world (Microsoft/Bill Gates) and Bill had OK'ed that we'd go $500MM in the hole to go after the long-term prize of local ad $$, it was my first lesson that even deep pockets run short of patience. Lesson: The best way to build a long-term sustainable business isn't to build it banking on the ongoing largess of deep pockets. Rather, it's building it a step at a time building off of cashflow. With Sidewalk, we hemorrhaged money as planned. Even today, though it hasn't been around for years (Citysearch bought it; more on that later), I still have people tell me it was one of the best sites on the Internet. Sites like Seattle's Sidewalk were truly great websites. Unfortunately, they weren't great businesses due to their cost structure.

The following is the tale of the evolution of how the deep pockets start to cut off your "air supply" and how it relates to pigs and lipstick: I became the general manager of cities to ensure that Sidewalk got far more efficient in how we rolled out and ran Sidewalk city teams. My team consisted of a team rolling out cities far more efficiently (we cut the time and cost in half to get up & running) as well as the Publisher/GMs of each of the new cities. I had 1/3 to a 1/2 of the entire Sidewalk team under my purview and boy were we losing money. Rolling out cities less expensively wasn't enough. From corporate headquarters, the executive management team was indifferent as to which markets to remove or pare down. A city was either a source of losses or profits and the message was clear what to do about losses. To take pressure off, we tried to put Lipstick on the Pig to make Sidewalk look better internally. Thus, we made the difficult decisions to cut cities wholesale or reduce staff size. This despite the fact that Microsoft was more profitable and growing faster than virtually any company in history at that point in time. Unfortunately, they saw past the lipstick. Never forget that even deep pockets expect a strong return on investment and it's usually sooner rather than later.

Of course, it's hard to shrink your way to success. The Internet ad market was still years from taking off and it was time to cut the losses as far as senior management was concerned. What's next? "Investigate strategic options." That's corporate speak for either shutting down or selling off a business. Key Sidewalk leaders were tasked with putting "Lipstick on a Pig". In other words, try to make the business look at good as possible so we could salvage some money from a sale rather than simply shutting down the whole operation (and there was a short fuse). While everything was perfectly legal, you do all you can to try to boost revenues and reduce or shift costs so that the potential acquirer thinks it's a great business they are buying. All this is done while trying to keep the troops as in the dark as possible so they don't get de-focused and/or want to jump ship.

The ultimate example of putting Lipstick on the Pig is when it comes time to report to the industry and Wall Street what you have done. The deal was reported as a $240MM acquisition by Citysearch so it was perceived as a victory for Microsoft. The Citysearch guys were sharp guys so with a clever warrant security the Citysearch guys called the "weedwacker", they reduced the stated price by $150MM. In the end, the deal actually cost Citysearch less than $100MM yet Microsoft was able to save face and Citysearch eliminated its biggest competitive concern.

Businesses of all types small, medium and large are bought and sold here in the valley. If you are the acquirer, always be wary of Lipstick on a Pig. A business rarely, if ever, looks as good as it does on the day it is sold. Caveat emptor.

Book recommendation: Join the conversation

2007-12-10T21:27:00.001-07:00

A former colleague of mine (Joseph Jaffe) has published his 2nd book on what he calls “new marketing”. Joseph is often quoted in the business press and is a thought leader in the marketing field. His first book was titled “Life After the 30 second spot” commenting on what businesses should do now that the 40+ year old 30 second spot is dying out in effectiveness in the age of TiVo. The book was a top seller on Amazon — one of the top selling business books the year it was published.

The next “new marketing” book that’s been published reflects the explosion of social networks, empowered consumers and what has been called “conversational marketing”. His book “Join the Conversation” is applicable whether you are a business or a public official. The book has been as high as the #2 top selling business book since it was released. Recently, many a business has suffered by thinking they shouldn’t enter the fray and engage in the “conversation”. People no longer accept being ignored by businesses as they have in the past. Companies like Dell suffered mightily when they ignored the conversation (Google “Dell Hell” to see an example) and have subsequently fundamentally changed how they approach their customer base.

Here’s a blurb from the book cover…

Book Description
With the continued fragmentation of the media and proliferation of media options, the balance of power has shifted from the marketer to the individual. In Join the Conversation, Jaffe discusses the changing role of the consumer and how marketers must adapt by joining the rich, deep and meaningful conversation already in progress. This book reveals what marketers must do to become a welcome and invited part of the dialogue, and how to leverage and integrate the resulting partnership in ways that provide win-win situations for businesses, brands and lives.

From the Inside Flap

Throughout the history of advertising and marketing, communicating with consumers has been a one-way street. Marketers produced and disseminated messages and customers consumed them whether they liked them or not. Today, every person sees thousands of advertisements a day—and totally ignores the vast majority of them. Yet, companies still spend billions of dollars each year yelling at customers who don’t want to hear it.

In this follow-up to his bestselling book, Life After the 30-Second Spot, author Joseph Jaffe explains how marketers must adapt to the brave new world of the Internet, social media and networking, consumer-generated content, blogs, and podcasts by joining the rich, deep, and meaningful customer conversations already in progress.

Consumers today are active participants in the advertising process, not silent targets and sitting ducks for one-way communication. Forget about the medium being the message; today, consumers are both the medium and the message. The future is bright for organizations that can join the ongoing dialog and leverage their customer relationships to build win-win situations for businesses, brands, and individuals. Through the power of community, dialog, and partnership, marketers finally have the power to talk with consumers rather than at them.

Traditional marketing is a red flag smart consumers can see from a mile away; an outdated idea lurching toward them with the same predictable exhortations and tired come-ons. They’ve had enough, and it’s time to change the dynamic. When marketing is a conversation, marketers can get to know their consumers as individuals, not as silent members of a faceless demographic subsection. Join the Conversation uses real-world brands and companies, real case studies, and real conversations to reveal how to talk to customers—and how to get them talking about you.

It’s time for marketing and marketers to become more meaningful and authentic, or they will both become obsolete. Totally practical and brilliantly revolutionary, Join the Conversation reveals the future of marketing and how you and your company can march boldly into it.

Join the conversation today at www.jointheconversation.us or through Jaffe’s daily blog and podcast, Jaffe Juice (www.jaffejuice.com).

Love at First Site

2007-07-20T16:56:00.001-06:00

This was forwarded to me in an email so I don’t know the author or I’d give him credit. I think this a good story/lesson for positioning a company for funding.

Love at First Sight

Yesterday I joined my fifth board and my first for Crosslink.

Years ago I had just received a term sheet for Series A venture capital and went looking for a looking for a bank. My accounting firm suggested we consider a certain banker at Summit Bank (New Jersey). I came home that evening to my little rented house, called my friend Steve, and declared I had just had lunch with the perfect woman for me. We have been married for 21 years. When you know, you know.

My partner Gary Hromadko and I met with a small SaaS company about six weeks ago. (I will keep the specifics out, as they have not yet announced the funding.) Not knowing what to expect, we sat down and began to listen.

What unfolded was a crystalline and complete story. The whole package was so clear and compelling, I walked out of that meeting 90 minutes later with a sense of déjà vu. We had just met the perfect deal for us. When you know, you know.

So what was it that rang such an obvious and compelling chord? I can easily enumerate the points.

Greenfield Opportunity
SaaS is a platform shift in the delivery of software. Every bozo vc knows that by now. And we all know that existing product markets always get replicated on new platforms, resulting in new businesses built in the ashes of old ones. Saleforce.com is built in the ashes of Seibel. Netsuite is trying to build itself in the ashes of SAP or Quickbooks. This one was a SaaS version of a category that was multi-billions in annual enterprise software revenues, and there is no clear leader in the SaaS version of the category, yet.

Experience and Domain Knowledge
The founders had strong credentials (both business and academic) with a record of real achievement in exactly this product category. They knew who the customers would be, why they would buy, and why a SaaS version would be appealing. They also recruited strong, experienced marketing and sales executives whose experience and approach to the job were context-appropriate. The sales strategy is the right one for the business and the VP of Sales has deep experience with exactly this kind of sales process.

Clear and Simple Product and Roadmap
The product demo was short (10 minutes) and drove home all the key points. The key success factors were well established in the earlier part of the pitch, making it very easy to see how the product met those market requirements, and why the scheduled future releases amplified the core story and did not take the company in a new direction. The product can become a franchise.

We Came Prepared
We knew what we were looking for. As a firm, we have been developing a SaaS practice for some time. While we were looking at this company, Gary was finalizing our investment in OpSource, which was announced about two weeks ago. We also are investors in Omniture, which has blossomed into a franchise in SaaS web analytics, and several other smaller SaaS companies. I had come close to two other SaaS investments earlier in the year. So by the time we showed up, we had a clear idea of what quality looks like, how to value it, and how to assess it.

Our diligence confirmed our instincts. Not only did the team check out as we expected, the customers raved about the product. When we asked customers about switching, we uniformly heard the “from my cold, dead hands” response.

Why am telling you all this? It is not to puff up the Company. This is part of why I left the company specifics out of the story. The truth of this business is that it is often one of love at first sight, or never to be loved. It is rarely the case that the second or third impression is the one that charms. Probabilities asymptote to zero, not to one. Test yourselves against the first three points, because this is the simple set of criteria most investors use. Test your audience against the fourth. Are you talking to someone prepared to appreciate the opportunity you are presenting?

I think we went from first meeting to term sheet in about 10 days. It did take me a little longer than that to get married after that first lunch. She needed to do a lot more diligence than I did. When you know, you know

Curious what life as a startup founder is like?

2007-06-26T07:06:00.000-06:00

Marc Andreessen (founder of Netscape) nails it describing the good and the bad. Here's a taste of his post...

First, and most importantly, realize that a startup puts you on an emotional rollercoaster unlike anything you have ever experienced.

You will flip rapidly from a day in which you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again.

Over and over and over.

And I'm talking about what happens to stable entrepreneurs.

Sidewalk: Insider's view of why & how it was killed (aka sold) and why Steve Ballmer now regrets it

2007-03-22T09:11:00.003-06:00

I was one of the first dozen or so members of the Sidewalk team at Microsoft that swelled to over 300 at one time. Personally speaking, it was the best of times and the worst of times. In my dozen+ years at Microsoft, it went from being the strongest team I'd ever seen assembled at Microsoft to my first evidence of Microsoft being infected with politics and big company shenanigans. In the 12 years or so since Sidewalk's inception, I've yet to see an accurate story of what really happened with Sidewalk. The local newspapers who reported on it not only didn't have an inside view but they also had a clear agenda to cheer Sidewalk's demise (e.g., the Seattle Times would never even publish Sidewalk's name). The industry trades simply took the story that was spun by Microsoft's PR and didn't dig deeper. Even astute industry commentators like Jeff Jarvis, Tom Evslin (an ex-Microsoftie), Frank Barnako, Stowe Boyd, Dan Gilmor and Fred Wilson, who often comment on the local Internet scene, aren't aware of some of the sordid history of Sidewalk.

I hadn't thought much about Sidewalk since I left that team in late '97 after spending a couple years on the team. However, a few things have brought back those memories and I thought people might find it instructive or at least somewhat entertaining to hear the story and share some perspective on the application of those lessons in today's web environment. It also shows how hard it is to incubate a new business inside of a behemoth corporation given the lack of patience that is often exhibited.

The following is an excerpt from a recent Herald Tribune article:

In 1999, Microsoft sold Sidewalk, an online city guide service. It seemed a wayward foray outside Microsoft’s software business at the time. “But Sidewalk was really aimed at what we now call local search,” Mr. Ballmer says. “Sidewalk is one we should not have gotten out of.”

Sidewalk was purchased by Citysearch in 1999 which is now a part of Barry Diller’s empire (along with Expedia, also started by Microsoft...he tried to purchase other Microsoft assets but that's another story). I recently had the pleasure of meeting Charles Conn (founder of Citysearch). Coincidentally, we now live in the same town and are on a non-profit committee together. Though I’d never met Charles, I was very aware of who he was (one of my Sidewalk colleagues had been a McKinsey partner with him) and we always had respect for Citysearch as a strong competitor that had some innovative go-to-market approaches. After sitting down for a coffee with him and sharing some battle scars, I realized that as the acquirer of the business, he’d gotten spun a good story that didn’t mirror reality yet that story is what is broadly understood to be the “real” story about Sidewalk. The reality is quite different although Charles shed light on things from Citysearch's perspective which was enlightening.

I realize that describing what led to Sidewalk’s demise is a bit like a blind man describing an elephant. There are several perspectives but I had a pretty well rounded view not only from my own experience but that of several people in other parts of the organization that stuck around longer than me. I jumped off what I saw was a sinking ship when I got the opportunity to fulfill a career goal of being a general manager of a business at Microsoft (Encarta.com).

One of the impressive things about Microsoft is its patience and determination. However, this tends to apply to traditional technology businesses (e.g., Windows and the Server businesses for Microsoft took ~ 10 years to pay off) versus the customer side of the business or media businesses that it has yoyo’ed in and out of. If I had a nickel for every time I heard Ballmer, Gates et al say “we aren’t in the media business”, I’d be a very rich man. I always felt this was naïve or disingenuous and would say to others “if it looks like a duck and quacks like a duck, it’s a duck”. Ballmer was quoted in the Herald Tribune article as saying “One of the biggest mistakes I’ve made over time,” he acknowledges, “is not wanting to nurture innovations where I either didn’t get the business model or we didn’t have it.” I saw this in a previous role when I was one of the first two people in Microsoft doing vertical industry marketing. Ballmer would ask us, "why don’t you guys handle more than one industry per person" when we’d grown to all of eight industries (e.g., I started Microsoft’s healthcare business). We’d just shake our head when we knew our competition had anywhere from 20 to 300 times as many people tackling each industry as we did. Thankfully, Ballmer finally got it when he saw how much money we were bringing into the company with this approach (last I heard, the healthcare industry effort I started was ~$500M in annual revenue). Believe me, when Ballmer gets something watch out as he is wicked smart and relentless...it just takes awhile. The successor to that vertical industry marketing org now has 2,000+ people in it. Unfortunately, it was going to take Sidewalk a lot longer to bring in positive cash flow as it had large product development costs (and this was known from the get-go).

When the original “founders” of Sidewalk pitched their business plan to Gates & co, there was an expectation that we’d sink $500M before making a profit but that we were building for the long haul and that the $67B or so spent on local advertising was a prize worth going after. Unfortunately, a few factors transpired to prevent that vision/plan from being realized. At the same time, MSN was a complete cluster*&$# and was hemorrhaging money with some failed experiments such as Bob Bejan’s “shows” that were about 10 years ahead of their time and countless other wacky content plays such as “Microsoft Dogs”. Meanwhile Sidewalk was hemorrhaging money (as planned) and there were many other media/e-commerce plays that were driving the senior execs crazy particularly when some of the them presented conflicts with corporate customers. These customers threatened to stop buying Microsoft software if Microsoft didn’t kill or spin-off some businesses (e.g., a key reason Expedia was spun out as it was an irritant to major corporate customers such as United Airlines). Barry Diller , Charles Conn and others were savvy enough to realize there was some "throwing the baby out with the bathwater" effect when Microsoft was trying to get out of content oriented businesses (some it later had to duplicate investment in later such as in Entertainment, local search, etc.).

Around this same time, Microsoft had acquired a company named eShop for the technology that became Microsoft Merchant Server. eShop also had “eShop Plaza” that came along with the deal and became MSN Shopping which was part of the still-flawed model of “online malls”. Nonetheless, one of the founders of eShop was enamored with his “online mall” and wanted to fulfill his vision of being the predominant “online mall” on the web (to this day, MSN Shopping is a 2nd or 3rd tier shopping site that has had, at best, modest success). However, Microsoft had no intentions of staffing that in a way to win on the web. As I recall, for a long time, eShop had one employee and a contractor or two who heroically kept the thing going. Meanwhile, the technology guys (Will Poole and Arnold Blinn) were what the Merchant Server product team wanted so the business guy was put into a staff position working for John Neilson who oversaw Sidewalk, Expedia, Carpoint, and HomeAdvisor. Unfortunately, at a critical juncture in Sidewalk's history, its executive champion (John Neilson) was tragically struck down with non-Hodgkin's lymphoma. John was a phenomenally talented guy who was inspiring to work for and also happened to be good buddies with Bill Gates (e.g., in Bill's wedding party) and Steve Ballmer. There's no doubt he'd be one of the three Microsoft presidents now given his talent, passion and connections. On a personal note, the day I was finalizing my new role working for John in a role that spanned his four businesses happened to be the first day he was out "sick" (I later learned just how sick he was when he didn't come back).

John's illness came at a time when his dislike of content businesses such as Sidewalk was consistent with many senior execs such as Ballmer who were questioning why we were doing content. At the same time, there was a focus on cutting costs on content businesses and make the case that some of those resources should be redirected towards the online mall concept. The fact that Amazon.com was in Microsoft's backyard probably made the shopping angle that much more attractive vs. media businesses where Bill, Steve and others had no experience. It should also be noted that the online ad business hadn't matured to where it was clear you could make a boatload of money.

Sidewalk had a super strong group of city General Managers such as Kevin Eagan, Cella Irvine, Doug Heinrich, Chris Hearne, Anne Karalekas, Moya Gollaher and Brad Struss. They had all gotten past what was the toughest interview process I’d seen of the legendary Microsoft interview process. It was Microsoft’s heyday and it could basically get anyone it wanted to join the company. One of the key premises that Frank and the founding team of Sidewalk had was that Sidewalk was going to experiment like crazy and let these high-powered GMs have a lot of freedom to innovate. This led to a natural tension between Redmond and the cities fighting for who controlled what decisions (Redmond product people were used to having the final say on all product decisions). The new GM of the group was typical of many entrepreneurs I’ve worked with who by the sheer force of will, they succeed. Implicit in this is they have a group of people who rally behind them to pull it off. The new GM didn’t have this advantage at Sidewalk where you could get people to rally behind you as the city teams and many in Redmond were deeply skeptical of him and questioned his understanding of the local/media business where he had zero experience. This led to the Redmond vs. cities war to escalate.

Just prior to the GM taking over, one of the least pleasant things I had to do in my career was shutting down the Montreal Sidewalk office which Frank had decided to do. While it wasn’t pleasant, I 100% agreed with the business rationale. I was on point to ensure that it went smoothly from a human resources and PR perspective. It wasn’t a career highlight but I was told afterwards that it was the most successful “RIF” (reduction in force) that the company had gone through. The RIF’ed employees were treated well, there was barely a PR blip, etc. My reward? When the new GM took over, he was familiar with what I had done and basically offered what I viewed as making a deal that was at odds with my beliefs. I would take over management of all of the cities (I was managing half of them at the time) with the goal of progressively reducing the city teams to non-existence. In exchange, I would take over a substantial portion of the product team. It was the first time in my career where I had an explicit fork in the road where I could either be true to myself and what I believed made business sense (Ballmer's comments provide a measure of vindication on that front) or maximize the opportunity for promotion by being someone's hatchetman. To that point, getting rapid promotions was my primary career goal and it had worked very well for me. Ultimately, I politely declined the offer. The guy who took on the responsibility I declined became the GM of MSN Shopping. He’s a guy I like a lot but didn’t have the issues I had with killing off the city teams and was rewarded handsomely for bleeding the cities.

The new GM felt he had to reign in the cities and the pendulum swung from decentralization to centralization. Some of the city GM’s (e.g., Kevin Eagan was one of the original founders of Sidewalk and had ideas coming out his ears - I'm still surprised he hasn't started his own company) had creative ideas that were money-making ideas they’d teed up in their market, however most of those ideas were killed before they could even be tested. The byproduct was constrained revenue growth and innovation which made the case even more solid why Sidewalk should be eliminated. The case became even stronger when acquisition discussions with Citysearch were enthusiastically pursued . This would free up resources to redirect towards MSN Shopping and recoup some of the investment Microsoft had made in Sidewalk via the acquisition. To his credit, the corporate development team played their hand well as the Citysearch guys knew there were issues inside of Microsoft regarding Sidewalk but not the extent of those issues and had little idea that they didn’t have to buy Sidewalk to eliminate a competitor. The Sidewalk acquisition increased the attractiveness of Citysearch’s stock (Ticketmaster Citysearch went public December 8, 1998) and has gone on to success.

The stated purchase price for Sidewalk was $240M, but $150M of that was in a clever warrant security the Citysearch guys called the "weedwacker". This warrant was designed by BD's vice chairman, Victor Kaufman, and it had a strike price that decreased as the value of TMCS stock increased, potentially delivering huge value. But it expired unexercised when the bottom went out of the market (TMCS' stock declined to $14 at one point in the crash, well above their IPO price, but below the trigger point for the warrant). In the end they paid less than $100m for Sidewalk and once again Barry Diller et al saw the value of properties that Microsoft didn't.

Postscript: Several members of the original Sidewalk team went on to become successful CEOs outside of Microsoft while a few of them stayed at Microsoft. I worked with many great people during my Sidewalk tenure who have gone on to great success in and out of the work world. Google people like Michael Goff, Richard Tait, Frank Schott, Laura Bordewieck (later Rippy), Jan Even, Mike Gordon, Dan Fisher, David Harrington, Gayle Troberman, Peter Atkins, Cella Irvine, Peggy Brown, Bill Furlong, the aforementioned city GMs and many others and you’ll see that the caliber of the team was amazingly high. It’s too bad Ballmer didn’t have more patience for that team to realize its full potential. In fairness to Steve, he was sold a story that he bought that wasn’t the complete picture of Sidewalk, however he was very open to hearing that story. Microsoft’s Internet business would be in much better shape than it is today as that talent largely left the MSN arena or the company altogether.

As for me, I dipped my toes back into the local online space last year becoming an investor in SunValleyOnline.com (a local news and information site for the Sun Valley area resort community).To my knowledge, SunValleyOnline is one of the few local online properties anywhere in the country to be making money (e.g., Citysearch is now making a profit) and is applying many of the lessons (good and bad) from Sidewalk. For example, the web user of today is much more willing and able to contribute content to a site if the right tools are in place. If you check out a site like SunValleyOnline, you'll see that 3/4 of its content are provided by the community it serves. SunValleyOnline can also leverage off-the-shelf tools rather than have to build much of the technology on its own (it still has to have some proprietary tools but far from 100%). Whether it is leveraging blogging software (WordPress) or utilizing infrastructure of others (e.g., YouTube), it can bring new tools to market rapidly. Let me share one example of the power this has had in the greater Sun Valley area.

Blaine County is the county that Sun Valley is in. For 17 years, Blaine County had tried and failed to get a new jail built including 3 failed jail bond elections. A jail bond election took place earlier this month. Prior to the election, the Sheriff and County Commission Chairman were reaching out to the local media in an attempt to raise awareness of the issues regarding why a new jail was needed (the list was long and compelling). Traditionally, if you tried to win an election in Blaine County, there were the typical tactics (newspaper ads, letters to the editor in the newspaper, etc.). SunValleyOnline (SVO) suggested a different approach leveraging the tools of the citizen journalism movement. There were two tools in particular that were suggested to the sheriff and commissioner that they took advantage of.

1. Video. The sheriff and commissioner offered to give tours of the jail to any citizen who wanted as he knew that anyone who saw the conditions his people worked in and the liability exposure the county had would vote for the jail bond. Realizing that very few people voluntarily want to go into a jail, SVO suggested shooting a video tour and posting it on YouTube/SVO. In other words if people won't go to the jail, take the jail to the people. It was far from a Spielberg production but it got the point across.

2. Blog. Naturally, voters had lots of questions about the true need for the jail and there were some conspiracy theories about the jail (e.g., it was going to enrich the sheriff) that they wanted to explain. As a voter who was neutral on the vote, I had several questions so I offered to post the questions in my blog I had about the jail. This spurred a tremendous dialogue between citizens and the commissioner answering questions, responding to rumors, etc.

The ads the jail bond campaign purchased on SunValleyOnline simply pointed to the videos and blog.

The end result? The jail bond passed overwhelmingly with nearly 80% of the vote. The sheriff credited the video tour based on the large number of comments he got as he was out in the community. It was apparent from the comments on the blogs that people who'd previously been against the jail bond changed their vote as well. The cost of using the aforementioned tools was negligible yet it had a demonstrable effect on the community. These are the sorts of things that weren't feasible in the early days of Sidewalk.

I searched my hard-drive for some of the early Sidewalk documents (back when it was still code-named "Cityscape") and found the original business and product plans. It's interesting to see how the opportunity was described and what the product vision was. Had Microsoft stuck to the plan and let the talented team pursue the opportunity, things might be very different today. Here are a few excerpts...

"We intend to play a similarly trusted role as the yellow pages and newspapers do today in consumers’ lives, by being the first best to look for an answer or a purchase. By developing a loyal set of consumers, we will create the best online advertising vehicle for local merchants and national advertisers, and capture a portion of the $67 Billion local advertising opportunity."

"To reach the comprehensiveness described above we expect will take 6 years." The reality is the plug was pulled in essentially 2-3 years before the yellow pages/local search opportunity could be tapped and before user-generated content became mainstream and would have made the cities far more cost-efficient (something Citysearch figured out) not to mention being able to do what I'd originally been hired to do -- scale Sidewalk in more efficient ways a la TV networks/affiliates after gaining insights from the so-called "owned & operated stations".

Why VCs don't invest

2006-11-06T07:51:00.000-07:00

A former colleague of mine, Paladin Partners' Janis Machala. spoke at a recent event in Seattle and laid out the top ten reasons why VCs choose not to invest.

1.) Saying the company has no competition.

2.) Saying you will do an IPO or be bought in next year or two.

3.) Saying the financial numbers are conservative.

4.) Saying that this will be the last round of private capital needed.

5.) Arrogant entrepreneurs.

6.) The executive team doesn't have "skin in the game."

7.) No focus on milestones.

8.) Unreasonable valuations or terms.

I'm betting on Crayon like I bet on Jaffe 4 years ago

2006-10-26T16:24:00.000-06:00

Crayon is “a new marketing company” launched by Joseph Jaffe, Shel Holtz & Neville Hobson of For Immediate Release fame and C.C. Chapman. I’m proud to say that if I wasn’t Joe Jaffe’s first client, I was certainly his biggest in his first year when he left working for “the man” and hung out his own shingle. At the time, I was working in MSN as Managing Director of Industry Marketing and Relations. Joe was instrumental in working on a project we called “Interactive Marketing Best Practices”. At the time, the Internet ad market was still in the tank and those that were starting to understand the power of Internet-based marketing needed some guidance on how best to use the array of tools available. Joe did a terrific job of not only creating much of the content (despite the fact that he wasn’t initially the project leader) but also doing yeoman’s work to travel the country and deliver the content that was very well received. It was one of the efforts along with the Cross Media Optimization Studies led by MSN & Rex Briggs and the Universal Ad Package (i.e., ad size standards) also led by MSN (Yahoo was also a key driver) that were critical in turning around the Internet ad market.

Joe was ahead of his time then and he still is. While Joe is certainly a talker/thought-leader, having worked with him, he’s also a doer. For those companies smart enough to hire Joe and his team, I’m sure they’ll get value. I don’t know Shel, C.C. or Neville but I’m certain Joe would only surround himself with people of his caliber. Joe doesn’t suffer fools (or at least not for long). One of the nails in the coffin that solidified my leaving Microsoft was seeing how Microsoft had evolved from a company of ruthlessly focused strategists/doers to having more and more corporate suckups that were threatened by (or jealous of) people like Joe. One of the people I worked with at Microsoft had worked with Joe at one of his agencies where this guy worked on a more prestigious brand than Joe probably because he was an effective suckup there too. He had a chip on his shoulder about Joe as Joe was well on his way to becoming an industry thought leader while this guy had only honed his suckup skills during the time Joe was building his reputation in the industry. This guy had the fantasy that MSN had made Joe a thought leader. While I’m sure it didn’t hurt to give him visibility, Joe was going to be a thought leader sooner or later regardless of what MSN did.

The Crayon Manifesto sounds like Joe talking. If you are considering working with Crayon, it’s worth reading the manifesto a few times. I would give Joe only the highest recommendation professionally and personally. Here are a few excerpts from the manifesto.

1. We are shape shifters. Winning in today's ever changing and volatile landscape requires versatility, flexibility and the ability to morph on demand and as needed. We are a different kind of company that mashes-up a combination of consulting, agency and advisory services. We'll also do windows and serve tea if required.

2. We are not superior and we are not subservient; we have strong and defined points of view and we look for clients of similar ilk. We want to be challenged and we want to challenge you. We're not yes men or women and never will be. If you can't handle the friction, passion and intensity, we'll gladly refer you to another company.

5. If you're still with us at this stage, you're still far from the comfort zone of convention. We live and die by our ability to generate the kind of prolific thinking, original ideas, differentiated strategy and key insights that you need to be and stay competitive in this business. We also demand to be compensated accordingly. Performance-based pricing is not an option; it's a necessity.

7. Our culture is one which not only believes in risk-taking and experimentation, but embraces it as a vital part of our DNA. We would rather beg for forgiveness than ask for permission. Our team is individually and wholly empowered to make their own decisions and to take matters into their own hands. What doesn't kill us will make us stronger and you better.

8. We are biased in some matters and unbiased in others. Our master is the customer; our master is the truth; our master is change. We fully intend to bias against the status quo and represent the road not taken with 110% of our minds, bodies and spirits. If you need a compartment or label, then consider us media or communications biased and conversation or solution neutral.

-- You have enough yes-men telling you to tweak the status quo."
-- You can't take incremental steps and expect an exponential result

10. Talent (together with vision, culture and creativity) is ultimately what differentiates us from the shop next door. If you have new marketing blood pumping through your veins and have the kind of passion, intensity and originality that is waiting to explode upon impact, inquire within. There will never be a "no vacancy" sign hanging on our door. And we'll never downsize, rightsize, leftsize or upsize based on the flavor of the month or the direction the wind is blowing. If you're a square peg, we'll cut you a square hole. If the role isn't defined, we'll create one for you. It's that simple.

13. Following on from this, is the power and importance of direct and honest conversation and communication. e-mail sucks. It's ambiguous, lacks personality and encourages political shenanigans. We discourage "cc" and we outlaw "bcc" We try and call it like we see it, and if that means ruffling a few tail feathers along the way, so be it. If we can foster a culture of integrity, truthfulness and conviction, we believe it will naturally spillover to consumers and reflect accordingly with the brand.

Crayon is the first company to launch in Second Life. I have to admit that Second Life is something I don’t “get” yet. I’m sure I’m like others who don’t get it in that I have never been into video games and I don’t have enough time to do what I have passion for in my First Life let alone a Second Life. All the same, I think highly of John Zdanowski who recently took on the CFO role for Linden Labs (owner of Second Life) and if it’s something that Joe Jaffe takes seriously, it warrants attention. At some point, I’ll have to dig into it and learn more.

As an interesting side note, what a screw-up by Crayola to not “own” the word Crayon! This is the 2^nd company I know of using the “Crayon” brand name (the other is in stealth mode so I can’t describe what they do other than it is completely different than this Crayon).

5 screw-ups and Ten Rules from a high-flying startup CEO

2006-09-15T08:26:00.000-06:00

Liz Gannes recaps a talk on a high-flying startup whose CEO was remarkably candid in a recent speech. What’s particularly interesting is this same CEO wrote a much reach piece entitled Ten Rules for Web Startups (see excerpts below). Here’s the list of screw-ups…

Williams went through a tidy list of the top five Odeo screw-ups:

“Trying to build too much” – Odeo set out to be a podcasting company with no focus beyond that.
“Not building for people like ourselves” – For example, Williams doesn’t podcast himself, and he says as a result the company’s web-based recording tools were too simplistic.
“Not adjusting fast enough” – The company thought its comprehensive web-based strategy would win out over the competition, primarily Apple, in the long term. “It turns out long term is not soon enough for a startup if you’re trying to get a foothold.”
“Raising too much money too early” – Williams seeded the money with $70,000 of his own money, and after the TED excitement added another $100,000. After he tied up over a million in angel funding, a term sheet came through from Charles River Ventures at three times the angel round valuation. They took the money.
“Not listening to my gut” – “When you’ve got a bunch of money and you’ve hired a lot of people and you’re talking to your board and you’re talking to reporters, your gut can get drowned out.”

Ten Rules for Web Startups

The following are the ten rules with a couple of samples of his rules. Click here for the details behind each.

#1: Be Narrow

Focus on the smallest possible problem you could solve that would potentially be useful. Most companies start out trying to do too many things, which makes life difficult and turns you into a me-too. Focusing on a small niche has so many advantages: With much less work, you can be the best at what you do. Small things, like a microscopic world, almost always turn out to be bigger than you think when you zoom in. You can much more easily position and market yourself when more focused. And when it comes to partnering, or being acquired, there's less chance for conflict. This is all so logical and, yet, there's a resistance to focusing. I think it comes from a fear of being trivial. Just remember: If you get to be #1 in your category, but your category is too small, then you can broaden your scope—and you can do so with leverage.

#2: Be Different

#3: Be Casual

#4: Be Picky

#5: Be User-Centric

#6: Be Self-Centered

#7: Be Greedy

#8: Be Tiny

#9: Be Agile

You know that old saw about a plane flying from California to Hawaii being off course 99% of the time—but constantly correcting? The same is true of successful startups—except they may start out heading toward Alaska. Many dot-com bubble companies that died could have eventually been successful had they been able to adjust and change their plans instead of running as fast as they could until they burned out, based on their initial assumptions. Pyra was started to build a project-management app, not Blogger. Flickr's company was building a game. Ebay was going to sell auction software. Initial assumptions are almost always wrong. That's why the waterfall approach to building software is obsolete in favor agile techniques. The same philosophy should be applied to building a company.

#10: Be Balanced

#11 (bonus!): Be Wary

Top 5 Tools For Generating Sales Leads

2006-09-01T08:44:00.000-06:00

From a podcasting news site, this talks about the top 5 sales lead generators.

When asked, "Which offers are 'very effective' for generating high-quality leads?" marketers in all three areas studied - technology services firms, and business software and hardware - put Blog and the Podcast in the top five.

The information comes from Marketing Sherpa's annual survey of business technology marketing executives. About 1,900 responded to the survey.

Top 5 Tools For Generating Sales Leads

· 1. Free Trials -- Business software marketers ranked free trials extremely highly, with 54% calling trials very effective.

· 2. Webcast -- At 41% this was another favorite for software marketers, however technology services and related hardware firms also ranked webinars at 33% and 31% respectively.

· 3. White paper -- All business technology marketers rated white papers fairly evenly, giving white paper offers ratings ranging from 31-36% 'very effective.'

· 4. Blog -- 35% of software and ASP marketers rated their blog as very effective, as did 33% of technology services firms. However, just 19% of hardware companies felt that a corporate blog was effective. This may be because general business executives are more likely to read a blog, while IT staffers may not.

· 5. Podcast -- Last year the concept of a podcast was barely on the technology marketing map. By June 2006, 22% of software marketers who'd given a podcast called them 'very effective' lead generation tools. Perhaps IT professionals are more likely to be in an early adopter community that might listen to a podcast.

Source: Marketing Sherpa (PDF)

Venture 2.0

2006-08-24T06:45:00.000-06:00

In light of my recent post on what I see as the most creative solution to fill the funding gap between angels and VCs, Peter Rip’s post on Venture 2.0 is worth reading. In the first part, he does a preamble on Venture 1.0 that’s worth a read to better understand the current landscape. Here’s his intro to the series…

This the first in a series of posts on the idea of "Venture Capital 2.0." I thought it was appropriate to first set the stage of Venture Capital 1.0 as the point of contrast. This first post is obvious stuff to those of us who have been in the business for a while, but less so for the casual observer.

It will be interesting to see if he comments on the implications of fund sizes on the current landscape. In a nutshell, most Limited Partners (“LPs”) don’t want to invest less than $10M at a pop and don’t want to own more than 10% of any given fund. This makes the minimum fund size $100M. A fund can only manage so many deals at a time due to board commitments, etc. thus they typically need to invest $5-10M at a pop. That figure is no issue for some sectors but it is overkill or premature for others leading to unnecessary dilution for founders and current shareholders.

New venture investment model launched at Keiretsu Forum event in Sun Valley

2006-08-23T15:36:00.000-06:00

One of the main reasons I have been light on blogging of late is my input to a new fund model that has been formed by Oracle and Microsoft veteran, Doug Woodward. Among other accomplishments, he was a founder of Microsoft Consulting Services and has worked with a number of startups in CFO roles. His firm, SmartStarters, and his board have been behind what I think is one of the most creative approaches to filling the funding gap between angel investors and institutional investors. Read the article I’ve excerpted from SunValleyOnline below for more details on the fund as well as the event that I catalyzed the Keiretsu Forum to put together. The event pulled together some of the best deals within the Keiretsu Forum network to present to a group of investors who descended upon Sun Valley last month.

Like the famous Allen & Company event held in Sun Valley every July, the most interesting discussions and deal-making happen outside the formal program. Though the attendees at the Keiretsu Forum-sponsored event weren’t household names like Gates, Buffett, Murdoch and the Google Guys, there were movers and shakers in the entrepreneurial world from Seattle, Silicon Valley, Washington DC and Atlanta. One of the most interesting side conversations creating buzz was a new venture funding model that fills a growing funding gap between angel investors and venture capital.

The formal agenda operated like a typical angel investor event with a sprinkling of what makes the Keiretsu Forum unique. That is, they have a major focus on relationships and collegiality as well as philanthropy.

Randy Williams, the founder of the Keiretsu Forum (KF) exemplified this by sharing his passions (he must have read “Never Eat Alone”) and his vast rolodex. KF prides themselves on doing whatever it can to help the companies who go through their screening process. During the presentation given by Martin Hedley (CEO of Positron Systems), Randy jumped in with how a contact he had in New Mexico in the aerospace sector could help Positron since they focus on aerospace (Positron’s intellectual property came out of the Idaho National Laboratory and has the potential to revolutionize aircraft maintenance).

The philanthropic facet of the Sun Valley angel investor event was evident at a fireside chat given by the extraordinary couple Paul and Debbi Brainerd. Paul is a retired tech industry legend who founded Aldus. Aldus and Paul are credited with creating the desktop publishing industry with the landmark product PageMaker. Aldus was purchased by Adobe for several hundred million dollars in 1994 launching Paul into the philanthropy world where he’s had an enormous impact. Even before the rise of the Gates Foundation, Seattle has been recognized as the most dynamic place for philanthropic innovation. Paul and Debbi spoke about two of the organizations they have founded – IslandWood and Social Venture Partners.

After the fireside chat, the buzz along with the Brainerd chat was the aforementioned new venture model. Watchers of the capital markets for startups have observed that Venture firms have ‘receded’ to later stage deals due to risk aversion and size of fund. That is, most funds these have more than $100M in the fund leading to the funds needing to invest $5-10M per deal which is more than many companies need or want. This has led to a shortage of funds for earlier stage deals since VCs are moving to later stage deals (so called “expansion stage” deals) and angel investors are few and mostly on the sidelines after getting burned during the dotcom era. The paradox is that fundable deals require real progress in financial management, corporate operations, product marketing and especially sales yet young companies can’t afford the services of high quality financial, sales, and marketing professionals—as hires or as consultants.

"I've seen this time and again with the 50 odd startups we’ve worked with", stated Dave Chase, Managing Partner of venture consultancy Altus Alliance. "We see a great young company stymied by this funding gap. We have long endorsed a “go slow to go fast” philosophy that focused on effective revenue generation as a key part of enabling early stage companies to gain initial traction but even this takes the right type of talent to survive the days of the tough initial sales that a startup must achieve in order to survive. "

Doug Woodward, a veteran of Oracle, Ernst & Young and Microsoft, is the architect of the new model that he proposes is a solution to this via an “operating fund” that finances acquisition of the necessary talent for young companies. The fund provides “execution” methodologies to early-stage companies for key processes (i.e., equity and debt financing, accounting, sales management, product marketing, etc.) that enables young companies to mature rapidly thus reducing execution & market risks. The byproduct is it produces emerging companies that are far more ‘fundable’ and have much higher probability for success. Woodward is currently working with angel investors and institutional investors prior to rolling out the fund to prospective portfolio companies. Contact information for Woodward’s firm can be found on their website.

Take Care of the Big Rocks First

2006-08-20T14:01:00.000-06:00

This little story is applicable both for running a startup as well as taking some breaks…

A philosophy professor stood before his class and had some items in front of him.

When the class began, wordlessly he picked up a very large and empty mayonnaise jar and proceeded to fill it with rocks, rocks about 2" in diameter.

He then asked the students if the jar was full? They agreed that it was.

So the professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles, of course, rolled into the open areas between the rocks.

He then asked the students again if the jar was full. They agreed it was.

The professor picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else.

He then asked once more if the jar was full. The students responded with an unanimous - yes.

The professor then produced two cans of beer from under the table and proceeded to pour their entire contents into the jar - effectively filling the empty space between the sand. The students laughed.

"Now," said the professor, as the laughter subsided, "I want you to recognize that this jar represents your life. The rocks are the important things - your family, your partner, your health, and your children - Things that if everything else was lost and only they remained, your life would still be full.

The pebbles are the other things that matter, like your job, your house, and your car.

The sand is everything else. The small stuff."

"If you put the sand into the jar first," he continued, "there is no room for the pebbles or the rocks. The same goes for your life. If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you. Pay attention to the things that are critical to your happiness. Play with your children. Take time to get medical checkups. Take your partner out dancing. There will always be time to go to work, give a dinner party and fix the disposal.

"Take care of the rocks first, the things that really matter. Set your priorities. The rest is just sand."

One of the students raised her hand and inquired what the beer represented.

The professor smiled. "I'm glad you asked. It just goes to show you that no matter how full your life may seem, there's always room for a couple of beers."

Basis for Altus' methodology published in Harvard Business Review

2006-07-19T11:42:00.000-06:00

Regular readers of this blog know that we (Altus Alliance) have been working with Mark Leslie for 2 years putting into practice the framework that Mark and Chuck Holloway have been developing over the last few years that we anticipated would be ground-breaking for the tech startup world. Mark has previewed this framework with some select audiences in the venture community which has led to several people very positively about it. These have included VC’s such David Cowan, Ross Mayfield, Tim Oren, and Jason Ball. There was also a recent post by Ed Sim on “When to hire a VP of Sales” that espoused ideas strikingly similar to Leslie’s framework. One of the most popular posts on this blog has been “What does Vinod Khosla know about Web 2.0 that others don't?” that recapped my take on the applicability of Leslie’s framework in the Web 2.0 context. With the recent publication, we have drafted a news brief that we’re sending out to a few of our contacts that I’ve previewed below.

Venture Consultancy, Altus Alliance, delivers on the promise of the Sales Learning Curve – published in the Harvard Business Review this month.

For the last 3 years, over 30 companies have sought out a new method to grow their companies and challenge the traditional strategy of startups who are taught to raise as much money as possible, grow a sales force and “get big fast.” One of the core elements of the new approach is that the cheapest and most sustainable form of capital was revenue. Another, is that when you introduce new products, there’s an inevitable period of “bumping around in the dark” while you refine your product, marketing and sales strategy and execution where you want to avoid over-investing in sales resources. In other words, slow down the initial trajectory in order to speed up the path to scalable and profitable revenues. These guiding principles formed the basis of a venture consultancy (Altus Alliance) focused on helping early stage companies gain revenue traction in a manner that preserves and expands their limited cash reserves.

At the same time, in the Bay Area, the former CEO of Veritas (Mark Leslie who is a current Stanford Graduate School of Business professor) was formulating a ground-breaking framework published this month after years of development in the Harvard Business Review (HBR). This framework had a strikingly similar premise to what Altus was implementing with its clients in Seattle. Mark is a member of an extremely small cadre of entrepreneurs who have taken a company from zero revenue to well over $1Billion while sitting in the CEO seat. With billions of dollars of venture capital residing down the street from Stanford University on Sand Hill Road, Leslie and his Stanford colleague Charles Holloway (the Kleiner Perkins Caufield & Byers Professor of Management) have been attempting to answer a fundamental question, “why does it always take longer and cost more to build a high-tech company than anyone ever expects?” For all the intellect, experience and graduate degrees in the venture capital industry, the sad truth is that 80 percent of venture capital investments do not pan out.

The answer (at least a key one), according to Leslie and Holloway lies in the Sales Learning Curve laid out in the pages of the HBR which they hope will prove as powerful a construct in the high tech sector as the Manufacturing Learning Curve (MLC) was to the manufacturing sector at an earlier time. Today, manufacturers wouldn’t think of running their operation without tracking the MLC because of the dramatic improvements in productivity that it offers. Similarly, Leslie and Holloway believe the SLC holds the potential to change fundamentally how high tech companies are managed, and they believe that it will lead to more high tech companies reaching the promised land of “positive free cash flow.”

“Because new-product launches often take longer and cost more than expected, many promising offerings are prematurely aborted. Smart companies give themselves time and money enough to climb the sales learning curve before ramping up the sales force.” Harvard Business Review, July 2006

Leslie refers to the type of sales people you need at the early stages as “Renaissance Rep” as opposed to “Coin Operated Rep” that you want when you have a proven, repeatable sales process. Renaissance Reps have strong entrepreneurial and product management skills and also must be resourceful, able to develop their own sales models and collateral materials as needed. In addition to its SLC practice, Altus has set itself apart by offering its clients direct assistance as “renaissance reps”, closing initial deals, iterating and improving on the initial sales process and generating initial revenues.

In 2004, the principals of Altus Alliance and Mark Leslie had the opportunity to meet and found great commonality in their respective experiences. Mark’s SLC thought leadership provided a more formalized structure to the approach Altus had been using in its work with clients. Since that first meeting, Altus became the first firm to become practitioners of the SLC framework. This approach has been at the core of Altus’ approach (even before hearing of the SLC) and has led to numerous successes with its clients including four successful exits in the last year alone.

The following is an abstract of the Sales Learning Curve paper published in the Harvard Business Review that I highly recommend reading (you can get an earlier version on our website from when Mark presented at a CEO briefing we hosted):

The Sales Learning Curve by Mark Leslie, Charles A. Holloway
Harvard Business Review - July 2006 Issue Reprint # R0607J

When a company launches a new product into a new market, the temptation is to ramp up sales force capacity immediately to gain customers as quickly as possible. But hiring a full sales force too early just causes the firm to burn through cash and fail to meet revenue expectations. Before it can sell an innovative product efficiently, the entire organization needs to learn how customers will acquire and use it, a process the authors call the sales learning curve: The company--marketing, sales, product support, and product development--and its customers transfer knowledge and experience back and forth. As customers adopt the product, the firm modifies both the offering and the processes associated with making and selling it. The more a company learns about the sales process, the more efficient it becomes at selling, and the higher the sales yield. As the sales yield increases, the sales learning process unfolds in three distinct phases--initiation, transition, and execution. Each phase requires a different size--and kind--of sales force and represents a different stage in a company's production, marketing, and sales strategies. Adjusting those strategies as the firm progresses along the sales learning curve allows managers to plan resource allocation more accurately, set appropriate expectations, avoid disastrous cash shortfalls, and reduce both the time and money required to turn a profit.

Sun Valley Angel Investor event

2006-07-10T09:22:00.000-06:00

Yesterday, we wrapped up the angel investor event in Sun Valley orchestrated by the Keiretsu Forum. The weekend offered the attendees a chance to golf, hike, raft, bike, relax, etc. before heading home and making way for Gates, Buffett, Murdoch, the Google guys and the rest of perhaps the biggest collection of billionaires in the world at the Allen & Company conference that takes place each year in Sun Valley. Given the short notice of the event, it was well attended with angel investors coming in from Seattle, Boise, San Francisco, Denver, D.C., Atlanta and Sun Valley. They heard presentations from 3 companies in a wide range of arenas – Voxilla (operates in the VoIP space), Festival Media (trying to do what NASCAR did for stock car racing in the festivals business), and Positron (exclusive licensee of some killer Dept of Energy IP in what’s called “non destructive testing”). They all did a nice job presenting but I was most intrigued by Positron. If they can execute, they are going to be picked up by someone like GE.

Friday evening, I hosted a gathering at our place that was highlighted by a fireside chat with Debbi and Paul Brainerd. Paul is credited with creating the desktop publishing industry by founding Aldus which created the landmark PageMaker product. Aldus was purchased in the mid-90’s by Adobe for over a half billion dollars. Paul turned his attention towards philanthropy and became one of the key people who turned Seattle into a hotbed for philanthropic innovation along with a few others such as Scott Oki (longtime MSFT exec who started Microsoft’s international business), Jeff Brotman (co-founder of Costco) and of course Bill Gates. Paul and Debbi are amazing people who’ve done tremendous work with the Brainerd Foundation, Social Venture Partners, IslandWood and many other organizations. They spent most of their time talking about SVP and IslandWood – both stellar organizations I’ve had first-hand exposure to.

It was fun to see all of the relationships that were built throughout the few days people were in town. As I’d hoped, I thought there’d be benefit in cross-pollinating angel investors from around the country. There were already discussions about doing this more often as well as having collaboration from a few angel groups around the Northwest that are interested in joining forces with the Keiretsu Forum. For example, there is a great angel group in Boise that has many seasoned entrepreneurs and successful executives who’ve moved to the Boise area. One of their leaders (Phil Bradley – CFO of ProClarity which was recently purchased by Microsoft) attended the event and is the kind of seasoned entrepreneur enriching the startup community in Idaho which is still growing. He saw a number of synergies with the Keiretsu Forum that could benefit Idaho’s startup ecosystem.

Angel investors: How to write off a trip to Sun Valley

2006-06-04T19:59:00.000-06:00

The following article about an upcoming "Best of the Best" Angel investor confab was posted on SunValleyOnline.com:

“Angel investors” are a critical part of the funding ecosystem for young companies. Virtually every household name in the technology business (Google, Yahoo, Apple, etc.), for example, got off the ground due to angel investors. There are over 200 angel investment organizations throughout N. America. The largest of them all is called the Keiretsu Forum and has members ranging from the former head of Charles Schwab to numerous “serial entrepreneurs” who want to put their money to work in this exciting (and high risk) form of investing. Dave Chase, a Sun Valley-based tech industry veteran, SunValleyOnline blogger and Keiretsu Forum Seattle member conceived of the idea bringing the best angel investing opportunities from around the country to a forum in Sun Valley that the Keiretsu Forum leadership embraced. The event will take place just prior to the Allen & Company conference at the Sun Valley Lodge (July 6-9).

From the Keiretsu Forum’s release: “This July the Keiretsu Forum will host a special "Best of the Best" Keiretsu Forum weekend in Sun Valley, Idaho. Keiretsu Members and special guests will review presentations from the three "Best of the Best" portfolio prospects, enjoy an evening reception with a fireside chat with PC industry and venture philanthropy pioneer Paul Brainerd and a relaxing weekend of hiking, golf and guided fly fishing with fellow K4 Members from around the country.” The Keiretsu Forum is open to Accredited Investors. If you are an accredited investor interested in attending or joining the Keiretsu Forum, please contact SunValleyOnline (letters@sunvalleyonline.com) specifying your desire to receive an invitation.

If you are an angel investor, I hope you can join us in Sun Valley and learn more about some hot young companies and the Keiretsu Forum.

Moving Memorial Day tribute

2006-05-29T17:49:00.000-06:00

I read a moving Memorial Day tribute written by a friend of mine that I thought was worth sharing.

A United States Marine was laid to rest last week at the Veterans Cemetery in Boulder City, Nevada. He was an American hero. A World War II and Korean War veteran. He was a member of what Tom Brokaw calls the “Greatest Generation”. Private First Class, George Donald Lotz was a man I barely knew. This Marine was my father.

Read on for more.

The story gave me goose bumps. The stories of men like my friend's father are unimaginable. It’s hard to say anything more than a huge “Thank you” to them.

Something his father and vets like him may have found surprising was my experience when I lived in Japan as a kid (30+ years after the war). Countless times, older Japanese would walk up to me (seeing that I was an American) and simply say “thank you” which may have been the only English words they knew. At first I was confused why they were saying that to me until I asked some Japanese to explain. They were saying thank you to me as a representative of our country (albeit a 10 year old representative) for how we treated their country after a brutal war. Today, they are now among our best friends in the world due to how we treated them after victory. That was a part of what the men like my friend's dad fought for — demonstrating a humanity that many victors of past wars hadn’t shown.

Blog silence broken

2006-05-28T07:38:00.000-06:00

My apologies for going silent for a few weeks. My somewhat limited blogging time has been focused on a blog I have with a local site in Sun Valley (www.sunvalleyonline.com). I blog on both local topics (e.g., growth related issues facing much of the Rocky Mountain West) as well as “Main Street Marketing” related topics. It’s the latter topic that has the most applicability to this blog. While greater and greater percentages of marketing budgets are going to the Internet, there’s been relatively little change with what I’m calling Main Street Marketers. These are the companies that fill most community newspapers and Yellow Pages books. They include restaurant owners, local retailers, insurance agents, real estate brokers/agents, nurseries, contractors, and franchisees of national franchises (and many more). The latest figures I’ve seen have nearly 1/3 of all media consumption taking place online yet less than 1% of the ad budgets of Main Street Marketers’ budgets have shifted to online. From the time I worked on Sidewalk (now CitySearch) starting in ’95 to seeing MSN/Yahoo/Google strive to get local businesses to spend search marketing dollars, it’s been a tough nut to crack as the cost of sale is usually quite high to profitably serve that market. That said, a > 30:1 disparity remains tantalizing and it’s clear that the newspapers and yellow pages companies have the lock on those budgets for now. I’m immersing myself in these issues as I think there will be ample opportunity to correct the imbalance between consumption and spend.

As you’ll see if you read some of my posts, many of the issues I’m discussing are what were discussed with “Madison Avenue Marketers” that have huge budgets and tremendous resources to evaluate online. Main Street Marketers don’t have those kinds of resources. Typically the owner of the business is also the Chief Marketing Officer among the many hats they wear. They are often worrying about issues that are in their face (e.g., employee turnover, excess inventory, etc.) versus having the luxury to think strategically about the fundamental changes that have happened with their customers’ behavior. One quote I got from a very successful retailer was eye-opening. He said that he just advertised in the newspaper (cutting out radio & TV) and he didn’t want to complicate his life by taking on online advertising. He went on to say that you never know if advertising works anyway so why complicate things. I had some responses that changed his perspective (and game plan) but nonetheless it’s telling to see where Main Street Marketers’ heads are at. Periodically, I’ll share what I’m learning from talking with the small business owners that I’m getting to know by living in this small town. While there are still big $$ to tap with Madison Avenue Marketers that’s going to towards TV, etc., at least as large of untapped budgets are with Main Street Marketers.

Here’s a sampling of some of the posts I’ve had geared toward that audience…

Political Phone Spam’s effect on voters -- political candidates and municipalities are also significant buyers of local media so I’m hoping to shake up their thinking so they don’t waste money doing ineffective advertising

Are you part of the problem/solution for 5 million lbs of waste? -- I did some back of the envelope math on the amount of waste the local papers generate and why local businesses (most of who consider themselves environmentally aware) are contributing to the issue

Once every 50 year occurrence affecting valley businesses - learn more -- this recaps a session I was asked to give by the local chamber of commerce on Internet marketing

Event Sponsorship Risks & Best Practices -- I’ve been a proponent for a long time of the value of event sponsorship however it’s very easy to waste a bunch of money doing it. I outlined some best/worst practices in this mini-series.

How non-profits benefit from blogs -- the local papers get somewhere between $250,000 and $500,000 from local non-profits in a community of 20,000 people. I think it’s a tremendous waste of money that could be eliminated by blogging so I advocated for that in this post.

The story behind Microsoft opening up its IP

2006-04-27T06:30:00.000-06:00

With the formation of Wallop out of Microsoft Research, Microsoft's IP Licensing Group is again in the news. Read about it here, here and here. A year ago, Mary Jo Foley reported on the fact that Microsoft has established a new division charged with licensing Microsoft-Research-developed technologies to startups and venture capitalists. This is the next step started over a year ago. My former colleague Bryan Mistele based his new company (Inrix) on Microsoft Research's predictive traffic technology and received one of the largest seed rounds in Seattle in some time (interview here). I'm going to reach out to a friend in that department to learn more. Stay tuned...Here's a list of what they are making available so far.

David Kaefer is the Director of Business Development for Microsoft’s IP Licensing group. The Seattle area’s largest A round in the last year went to the first licensee of this new effort (Inrix) to more broadly license Microsoft’s broad base of under-utilized IP. It’s worth taking note when something as significant as that happens so thought it was worth sitting down for a chat with David. The technologies they are making available tend to be "pre commercial" in that they aren't quite ready for primetime in terms of a final product form in areas that are getting funding. They tend to be standalone products or at least a substantial feature of a bigger product.

Chase Market Velocity (CMV): How are you going to measure the success of the program?

David Kaefer (DK): Success of this program is indicated in many ways, but in the short term it is shown with every licensing agreement we sign. Because of the nature of these agreements, the ultimate success and benefits from this program will be borne out over the long term.

CMV: The first licensee (Inrix) was all ex-MS people? While I assume you don’t have to be an ex-MSFTie to license the technology, why would an ex-Sun person (as an example) consider licensing your IP?

DK: Inrix technically wasn’t a part of this IP Ventures program, but rather that agreement occurred as a result of the kinds of inquiries we received on a regular basis and is an example of some of the impetus for the creation of the IP Ventures program. This program is open to all comers, and we hope that it is interesting to all parties regardless of their former employer. The program offers rich, stand alone technology that is best utilized by a party who has the capability of taking it from the prototype phase into the production phase and ultimately to market. We want to talk with any interested party who has those capabilities.

CMV: What's a typical deal structure? Equity? Royalty? For how long?

DK: Each agreement is negotiated on an individual basis. We can accept cash or up front payments, but we recognize that many start ups need to conserve cash. Equity or royalties or any sort of creative combination of the two are what we expect to see on a regular basis in these agreements. The length of each agreement will also vary on an individual basis and will depend on the parties, the technology, the perceived market for the technology and other relevant factors.

CMV: You have 20 technologies listed on your site that are available. Why these 20? How many others will come out? Are you going to be focused in particular areas?

DK: We started with these twenty based on feed-back we received from the venture capitalist organizations we spoke with. They helped us identify the technologies that are most marketable and the ones that are receiving the most VC backing right now. We expect many others to be unveiled over time, but it’s impossible to predict exactly how many or when or even the particular technology focus of the innovations added to the IP Ventures program in the future.

CMV: What makes these technologies something MS wants to share vs. other R&D that isn't shared externally? Which do you think are most valuable of what they are licensing? Why?

DK: The main reason these technologies are being shared is that we see a market opportunity for them. They are not currently being used by Microsoft in the manner in which another company could use them. We think that all of the technologies available under this program are valuable.

CMV: What kind of assurances do your licensees get that the IP is defensible? If there's a dispute where a 3rd party claims infringement, how is that handled?

DK: Each agreement will be negotiated individually to the mutual satisfaction of the parties. There are many ways that the potential liabilities can be borne and distributed amongst the parties and each agreement will factor in the unique indemnities and assurances necessary for the parties involved.

CMV: Has any form of market validation or input taken place for these technologies? Do you know what markets are likely to be interested in the various technologies? Is there an objective person/team providing that validation?

DK: Right now, the primary form of market validation has been the input of the VC’s and entrepreneurs we have been talking with in the last few months. For example, we have had discussions with VC’s like 3i plc, Advanced Technology Ventures, MDV-Mohr, Davidow Ventures, OVP Venture Partners, and Insight Venture Partners. The true test will occur when the technology is released to the market, but we feel confident that the outsiders we’ve spoken to represent a broad cross-section of the market place with a sophisticated business sense about which technologies are best to pursue right now.

CMV: What's the process once someone sends a mail to the team expressing interest?

DK: The complete details about how to take advantage of this program are available at http://www.microsoftipventures.com.

CMV: With corporate VC investment on the rise, will MSFT ever be a financial backer of these companies in addition to providing IP?

DK: That is not how we envision our participation in these agreements but it isn’t something that we would necessary rule out.

CMV: How will the researchers who developed the technology be available to the startup?

DK: To operate this program successfully, we recognize the need for a high-touch approach. We intend to work with the licensee to provide them with what they need to implement this technology into their products. Access to Microsoft researchers may be important to transfer basic know-how about the products that isn’t well documented in some other form. Access to these researchers will be a consideration for a number of the deals.

CMV: How do you plan to reach out to the entrepreneurial and VC communities to make them aware of what has been developed?

DK: Our outreach has already begun. We have been meeting with VCs and entrepreneurs over the last few months. We have spoken to large groups of VC’s at the NAVC conference in New York last week and the VC summit in the Bay Area this week. Our IP Ventures team is going to Europe next week to continue the engagement we’ve begun with venture groups like 3i plc. Additionally, we’ve issued a press release and conducted many media briefings on this program roll-out.

CMV: Are there any upcoming events where people can learn more?

DK: To this point, we have done 1:1 meetings with VCs as well we are included in forums Microsoft puts on that target VCs. We have also had meetings with established companies looking for specific IP. What often happens is we share some of what we have and they indicate specific areas they are looking for. In some of those cases, we have technologies that are applicable.

CMV: Have you reached out to angel alliances or individual angel investors?

DK: We are experimenting with a variety of different groups to reach out to. While we have spoken with individual investors, it's an interesting idea that we'll consider.

CMV: Do you have any technologies applicable to the emerging Smart Energy arena?

DK: The technology behind Inrix is focused on "machine learning" and has been applied in areas ranging from anti-spam to traffic (Inrix) where there are repetitive and predictable outcomes. It's entirely possible that the same technology could be applied into Smart Energy. In addition, a Utility could use a technology that we call "Zone Zoom" that would allow a utility to drill down on problem areas on the grid. We have also done work in battery cell technologies.

technorati tags: microsoft, ip, licensing, research, socialnetworking, bayventures, karljacob

New West Network and SunValleyOnline become partners

2006-04-21T08:18:00.000-06:00

The New West Network (NWN) is a well-backed enterprise focused on covering the changes in the Rocky Mountain West which is region transforming from an agriculture and extraction based economy to a more mixed economy with significant high tech and tourism industries (typically one of their top 3-4 industries economically). New West found that the traditional media in the communities throughout the Rocky Mountain West weren’t adequately covering this transformation. NWN and SunValleyOnline.com (SVO) recently established a relationship where SVO is an affiliate of NWN since they complement each other.

Roughly a year ago I began informally advising the owner of the SVO business. It’s a local site focused not surprisingly on Sun Valley, Idaho. He started it 2 years ago and it has grown into a major presence in the Sun Valley and surrounding area. I have had interest and involvement in local online businesses since I managed half of the Sidewalk (later purchased by Barry Diller’s CitySearch business) cities. [Sidewalk is a whole other story I may blog about at one point that gives a window into big and engineering-driven company politics.] Virtually all of the big Internet players (Google, Yahoo, Microsoft, IAC and AOL) covet the large pool of local ad dollars that are typically captured by monopoly newspapers and yellow pages. To date, the only real success the big guys have had is capturing local advertisers via Search that is most likely affecting yellow pages spend.

The thing that has made the dollars that especially the newspapers have captured attractive for the big guys is the ever growing disparity between media consumption and media spend and the audience loss newspapers have suffered. Consider the following:

Overall population: 4.7x usage to spend for Internet while 0.3x for Newspapers + Magazines
Youth population: 11.3x usage to spend imbalance for Internet while 0.4x for Newspapers + Magazines (usage weighted towards magazines)
The average age of a newspaper reader is ~60 – an age group that has typically passed their peak spending years and have already made decisions on what brands they are loyal to
Adults 18-54 have the Internet as their #1 media choice (45.6%) vs. newspapers (3.2%)
Free classifieds such as Craigslist and Google Base are eating away at the most profitable portion of newspapers business

While much has been written about newspapers demise, they are still quite profitable especially in small markets. In fact, the Wall Street Journal recently wrote about the success of one of Lee Enterprise’s newspapers in Bismarck, North Dakota. Lee is an Iowa-based owner of newspapers (mainly in small towns) with nearly $900M in annual revenues. Coincidentally, Lee has a newspaper in the Sun Valley area. Doing “back-of-the-envelope” math, one finds that a site like SVO has anywhere from 1/15^th to 1/40^th the amount of revenue that the local newspapers have yet they have an audience is as big or bigger than their newspaper counterparts.

Since the online local ad market is of ever-increasing focus by the big and emerging Internet players, I expect I will blog periodically on what I’m observing in this local community (Sun Valley) as it ought to be a microcosm of what’s happening on a broader level. Understanding the inherent strengths and weaknesses of both the Internet players as well as the local newspapers and yellow pages will be instructive for other arenas. There are many reasons why small businesses which make up the bulk of newspaper advertising spend in a market like this are only spending 1% of their budgets online yet their customers are spending more than 30% of their time consuming Internet media. The real question is when the consumption vs. spend gap will close as it has done on a national basis even though that disparity is still large.

technorati tags: NewWest, SunValley, Idaho, Rockies,localadvertising

The 6 most valuable letters of all time

2006-04-09T19:47:00.000-06:00

Fred Wilson recently commented on whether technical innovation or business model innovation was more powerful for a startup. He cites examples of both being drivers. I'd argue that business model innovation is more durable. Mark Leslie (a rare CEO who took a tech company from $0 to over $1B in sales) has commented on the fact that execution risk for most startups has shifted from technology to go-to-market as development tools have gotten so much better. Consequently, technical innovation has become much easier to replicate. One only has to look at a couple of the most sustained successes in tech over the last few decades to see how busines model innovation has been very durable -- IBM and Microsoft. Having competitive (though not always the best) products was clearly important but not sufficient to drive their long-term success. For IBM, it has been their world class sales & marketing machine that allowed them to weather their darkest days yet still have over $60B in revenue. With Microsoft, they've had two monster successes that boiled down to 6 letters encapsulating their business models that each changed the rules of the game in their market space and proved to be very durable.

Windows -- The 6 critical letters were O-E-M and I-S-V. There's little doubt that OEM'ing Windows to hardware companies rather than taking the path to maximize short-term profits as Apple did in the 80's and 90's by controlling both the OS and the hardware was instrumental in their success. Secondly, their investment in and success with ISV relations dwarfed any of their competitors. The byproduct was many customers had no choice but to go with Windows as that was the only platform that their applications ran on top of. While Microsoft certainly has taken a beating for the issues that come along with a platform that has infinite combinations of software and hardware vs. a limited set with the Mac, they have happily taking that beating as they ran to the bank with trainloads of cash.

Office -- It boils down to 6 letters again -- b-u-n-d-l-e. Initially they just did "marketecture" (initially there was no integration between Word, Excel & Powerpoint) by slapping three products in the same box for a combined much lower price than buying WordPerfect, Lotus 123 and Harvard Graphics. Over time, the products became more integrated but they changed the discussion within I.T. shops from individual productivity apps to having an Office suite. Their competitors were slow to move and then got severe indigestion while acquiring companies to compete with office. There were 6 other letters that were also critical in Office's success -- S-e-l-e-c-t (another business model innovation). Select was the name of their volume licensing program with enterprises that made Office very difficult to unseat.

Each of those 6 letters for Windows and Office have probably generated more combined profits than any other product over their lifespan in the computer industry.

technorati tags: FredWilson, MarkLeslie, IBM, Microsoft, businessmodel, innovation, Windows, Office, Select, bundle

Tips on Working with Microsoft

2006-04-04T20:59:00.000-06:00

Jim Lejeal, CEO and Cofounder of Oxlo Systems Inc. has been a partner of Microsoft's in a few different companies. He has some great tips on how to work successfully with Microsoft. Having worked on various partner programs at Microsoft, it was terrific to see companies who leveraged the heck out of Microsoft, but it was also frustrating to see others spin their wheels.

technorati tags: Microsoft, partnering

Segmentation's benefits

2006-03-28T17:10:00.000-07:00

While a simplistic view of segmentation could be viewed as “selfish” as stated in Seth Godin's blog entry on segmentation, there’s much more to segmentation than simply efficient targeting schemes. As Seth states, “You do it by creating something worth talking about!” In order to do that, you need to understand what makes customers tick even if they can’t articulate it themselves. If you look at the benefits of market segmentation (paraphrased from a Segmentation presentation given by Mohan Sawhney – a noted Kellogg prof), many of these don’t strike me as selfish. Rather, they provide a framework to understand customers and then reach them while avoiding what Professor Sawhney calls “wastage”. Said another way, it’s avoiding pestering people with marketing that isn’t something they’d be interested in – that doesn’t sound selfish to me.

• Customer focus: Customers have different needs and priorities, so you cannot please everybody with the same offering. Segmentation allows firms to be more costumer-focused by responding differently to different customers

• Profitability: Not all customers are equally valuable. Segmentation allows firms to focus their resources and marketing programs to identify, attract, develop and retain the most valuable customers.

• Competition: Segmentation helps firms to identify customers that are most “vulnerable” to competition and customers that are most “winnable” from competition.

• Differentiation: Segmented offerings are more differentiated and therefore less commoditized; the basis for comparison shifts away from price to value.

• Productivity: Segmentation reduces “wastage” in marketing communications spending by allowing the right messages to be sent through the right channels to the right customers at the right time.

For the early stage businesses I've worked with and observed, segmentation can be an effective tool to avoid wasting precious resources trying to serve a market that doesn't value their offering.

An Economics lesson for the computer industry

2006-03-28T06:56:00.000-07:00

Joel Spolsky lays out a nice economics lesson on micro economics for the hardware and software industry, and the accompanying implications that are sometimes ignored by the likes of Sun to their demise. One of the key concepts he discusses is the criticality of understanding your products "complementers" and what complementer pricing can do to your own product's pricing. Well worth reading this "oldy but goody".

Demo tips from DEMO

2006-03-23T14:43:00.000-07:00

Periodically, you'll have opportunities to demo your product in front of influential customers, partners or investors. David Hornik has some useful tips based on his observations from the well-known DEMO event.

A new tactic against Advermin

2006-03-22T20:59:00.000-07:00

John Cook reports on an effort to thwart 180Solutions that sounds like a similar approach to what I suggested back in January to "out" what I called "advermin". I don't know about whether 180Solutions tactics are clean today but any organization (whether they are the advertiser or the enabler) that undermines the health of the overall online ad market deserves being shamed IMHO.

technorati tags: advermin, adware, spyware, advertising

Combining productivity and staying fit

2006-03-22T06:23:00.000-07:00

Two things I'm fanatic about are productivity and working out. I try to squeeze every ounce of productivity out of my work day and I rarely miss a day of working out. If I haven't worked out, chances are I'm on the proverbial death bed with the flu. When I worked in the typical corporate environment, I had a gym membership. One of my little productivity habits was printing out non-urgent emails and articles that I'd read while on a machine where I could read while I worked out. Since my "gym" is now the pic you see on the right, I had to make some adjustments since it's impossible to read while running, snowshoeing, skiing, mt. biking or climbing.

There are two ways I've solved that issue. One thing I do to organize my week is write down "think" items. These are items where I don't need to be at my desk. In fact, being at my desk can be an impediment to clear thinking. Those think items go with me on my mountain adventures along with a voice recorder if/when I have a nugget I don't want to forget. As I've said many times, most great ideas come don't come while you are inside a conference room or office. The other productivity enhancement is listening to podcasts. One of my criteria for the MP3 player I bought was to also have a voice recorder so I can also capture thoughts while I'm out and about. My current podcast subscriptions include Joseph Jaffe's Across the Sound, Adam Curry's The Daily Source Code, iMediaConnection's podcasts, and various podcasts from NPR and Business Week.

Brad Feld has taken this productivity bent to a whole new level with his Tredputer. The thought of jumping on a conference call while I'm on a hike or while I'm on a trainer bike has definitely crossed my mind but I'm generally at too high of a heartrate to be able to do it without irritating the others with panting. For now, I'm happy with my approach to productivity.

Penny-wise, pound foolish

2006-03-21T07:16:00.000-07:00

One of these days, I'm going to come with my Top 10 list of ways emerging businesses are Penny-wise, Pound-Foolish. While there are plenty of counter-examples such as RightNow's bootstrapping story and the Inc. magazine story of my friend Dave Morgan (founder of Real Media & Tacoda), too often I see organizations tout how great they are at being frugal by sharing symbolic gestures like desks built out of doors (last I checked, I could get a desk at IKEA for roughly the same price as a door) while wasting real money in other areas. The most common mistake is over-hiring sales people too early in the process which is often coupled with over-spending in marketing. Mark Leslie's Sales Learning Curve framework outlines this in great detail using his composite company example -- Nano Optical Customer Adaptive Software (NOCASH). His whitepaper and presentation are posted here from his CEO Briefing that Altus Alliance hosted.

Sucking down more important than sucking up

2006-03-21T05:30:00.000-07:00

Tips from Guy Kawasaki remind me of #11 on my list of Uncle Bill's words of wisdom he shared upon his retirement after a successful 46 year career as a "new products" guy.

#11 Never trust a person who is Dr. Jekyll to those above him and Mr./Ms. Hyde to those under him. Click here for the rest of Uncle Bill's list.

The one from Guy's list I believe in the most is...
8. Rack up the karmic points. I believe that there's a karmic scoreboard in the sky. It keeps track of how many points you've earned and how many you've used. Therefore, when you have the opportunity to help others, do so--and do so with glee. You'll build up points, and someday your kindness will be returned to you. However, understand that you need to accrue these points before you need them--you cannot go negative.

Company politics bog down Market Velocity attainment

2006-03-20T08:57:00.000-07:00

I was reminded of the negative impact politics can have on gaining market traction (if people are focused internally, they limit their opportunity to learn from and sell to customers, partners, etc.). Why does it seem that company politics are more common in "BigCos" and how do you avoid it whether you are in a BigCo vs. LittleCo? When my partners and I were chatting with Mark Leslie (ex-Veritas CEO), he shared some insights on how he kept politics largely out of Veritas even as it grew dramatically in size. His view is that people trying to control access to information is usually the seedcorn of company politics. He combated that by having extremely open communications (short of violating SEC rules) with his employees. Even when it's bad news, sharing information builds trust in management. With the rise of blogs and the like, we are living in an ever more transparent world (though there are plenty of holdouts :)). Lack of transparency, I'm convinced, will become an impediment to hiring quality people.

What comes around goes around

2006-03-17T06:10:00.000-07:00

This Washingon Post article highlights the congressional Republican rebellion against President Bush. There are plenty of other cliches to apply here including "don't burn bridges", "Never trust a person who is Dr. Jekyll to those above him and Mr./Ms. Hyde to those under him", etc. Whether you are a Bush supporter or not, these are lessons you can apply to business. That is, when you are in a position of power, it can be easy to be arrogant or abusive and you can get away with it...for awhile. I've seen it personally and heard of many examples ranging from Apple to Microsoft to Yahoo/AOL (during the dotcom heyday) to most recently Google. Since I never worked on the so-called monopoly businesses at Microsoft (i.e., Windows and Office), I would be appalled when I'd hear some stories of what people in those businesses would say or do. Unfortunately for Microsoft, a lot of that came to light during the DOJ case. Likewise, these things usually trickle out years later when the perceived bully loses some of their power and it's payback time.

I'm a globalist which is one of the reasons I've had concerns about the approach we have in U.S. Foreign Policy/"Diplomacy". I'm 100% sure there are countless under-the-radar examples where U.S. companies are at greater disadvantage than they've ever been to compete in the global market. It's "death by a thousand paper-cuts" that is introducing friction for American companies in an incredibly competitive global market. I'm convinced we will hear about these more in the years to come. I'll end with yet another cliche -- those that don't learn from history are doomed to repeat it.

Early bird rewards

2006-03-15T11:05:00.000-07:00

Being an early bird has made me unusual in the tech industry. The majority of the people I've worked with are night owls but my productivity level goes in half after 6pm so I just accept my body clock. Normally, my habit of waking up between 4 and 5 am allows me to get caught up on email, perhaps post a blog, etc. but all work and no play isn't something I espouse especially when there's been a foot of new snow overnight. So this morning, by the time most of you were getting to your desk, I'd climbed 3,000+ feet and skied down and was back at my desk (not to mention listened to several NPR, Adam Curry, Joseph Jaffe and iMedia podcasts). It was a classic bluebird day with clear skies and fresh powder/tracks all done by 8:30. Hard not to have a smile on your face.

Book Review: Wisdom of Crowds

2006-03-14T06:07:00.000-07:00

I liked this book so much I wrote a book review originally published on iMedia in the Fall of 2005. iMedia is the “Ad Age” of Internet marketing so it was written with a marketer’s point of view. You can get the book here. Though I read and reviewed this about a year and a half ago, the notion of “collective intelligence” has risen in prominence quite a bit since then so thought it was worth sharing again.

If you look beneath the surface of some successful companies, you'll see they employ strategies espoused in James Surowiecki's book. A great example is a company run by my friend Ian Morris -- the CEO of HouseValues. There's much more than meets the eye that drives their success. The full title of the book is "The Wisdom of Crowds: Why the Many Are Smarter than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations," by James Surowiecki.

Surowiecki aims to be the next New Yorker contributor to have a mass appeal book, ala Malcolm Gladwell. He clearly wants to position this book as the next "The Tipping Point" -- combining cognitive science and other disciplines into a book addressing business, politics, society and economies. The book’s relevance to marketing may not be as obvious as The Tipping Point, although there are examples from our industry. As Surowiecki states, “Google is built on the wisdom of crowds. The core of the system is the PageRank algorithm -- a calculating method -- that attempts to let all the Web pages on the Internet decide which pages are most relevant to a particular search.” He goes on to say “With most things, the average is mediocrity. With decision making, it's often excellence. The idea of the wisdom of crowds isn't that a group will always give you the right answer but that on average it will consistently come up with a better answer than any individual could provide.”

While the stakes in marketing may not be as high as space shuttle missions or stock markets (two of Surowiecki's other examples), there are lessons in this book that marketers could apply in a variety of ways. Whether you're making business strategy decisions or developing a marketing campaign, many of us have seen the ill effects of "groupthink" versus bringing together diverse groups within an effective framework. Fortunately, the Internet can enable the elements of a "wise crowd."

This book made me think about how collective wisdom could affect decisions such as ad campaign development (creative decisions, media buying, etc.), product development decisions, industry standards (surely there's a way to move things forward more rapidly) and many other decisions made within your company or across teams representing clients, agencies and technology providers. From my own experience working with technology companies targeting the marketing community, I can see many ways to apply principles in this book to product development, sales and marketing.

Corporations and industry bodies have generally been unwilling to improve their decision making by tapping the collective wisdom of their employees and members. Those who can harness the potential for wisdom that exists within crowds of people will have the world as their oyster.

Perhaps the most significant point for readers isn’t the perspective Surowiecki provides to the inward-facing, organizational structure/behavior perspective, but rather the outward-facing: how marketers can better understand their customers -- how they think, why they think that way, and how their ability to communicate with each other (rather than just with customer service and technical support) raises their collective IQ.

It could be said that the wisest crowd out there is the billions-big horde of Internet users, who consistently use the Web in smart ways that neither technologists nor marketers would have dreamt up. The companies and marketers who grasp the implications of this will in turn develop products and services more in tune with their customers’ needs, as well as have the accompanying Web sites and marketing campaigns to harness these insights.

While our society often trusts experts and distrusts the wisdom of the masses, Surowiecki argues that "under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them." He uses a variety of examples ranging from simple challenges such as a crowd guessing the weight of an ox to incredibly complex: another crowd located a lost submarine where the best approximation was 20 miles wide and thousands of feet deep. It was eventually found 200 yards from where the group estimated it would be. This despite the fact that no one knew why the sub sank, no one had any idea how fast it was traveling or how steeply it fell to the ocean floor. Other compelling examples include how SARS was solved, and a method for predicting election outcomes with great accuracy.

The author outlines four elements required to have a wise crowd:

Diversity of opinion: Each person should have private information even if it's just an eccentric interpretation of the known facts.
Independence: People's opinions aren't determined by the opinions of those around them.
Decentralization: People are able to specialize and draw on local knowledge.
Aggregation: Some mechanism exists for turning private judgments into a collective decision.

He also cites examples of groups where these elements are missing with sometimes disastrous consequences. Small groups can make very bad decisions because influence is more direct and immediate and small-group judgments tend to be more volatile and extreme. Large groups missing the four elements can also have disastrous results.

One significant example that Surowiecki describes concerns the Space Shuttle Columbia's Mission Management Team (MMT). The team violated nearly every rule of good group decision making. As Surowiecki outlined, “the team's discussions were simultaneously too structured and not structured enough. They were too structured because most of the discussions -- not just about the debris strike, but about everything -- consisted of the MMT leader asking a question and someone else answering it. They were not structured enough because no effort was made to ask other team members to comment on particular questions. This is almost always a mistake, because it means that decisions are made based on a very limited supply of analysis and information.”

One of the consistent findings from decades of small group research is that group deliberations are more successful when they have a clear agenda and when leaders take an active role in making sure everyone gets a chance to speak. In small groups, diversity of opinion is the single best guarantee that the group will reap benefits from face-to-face discussion.

Conversely, in a stock market bubble all the conditions that make groups intelligent -- independence, diversity, private judgment -- disappear. Whether it was the dot-com bust or the run-up of bowling stocks 40 years ago, stock markets have the potential to lose key elements that make them generally effective. As we are on the 75th anniversary of the 1929 stock crash, we need to remain conscious of the limits of the risks when all the elements of a wise crowd are absent.

The following are additional ideas from this useful book that are salient to the four elements of “wise crowds” -- Diversity, Independence, Decentralization and Aggregation:

Diversity of opinion and background

When there is a lot of uncertainty, such as in the early days of an industry where the winners and losers haven't been sorted out, it's key to have a system that encourages, and funds, speculative ideas, even though they may have only slim possibilities of success. Even more important is diversity -- not in the sociological sense, but rather in a conceptual and cognitive sense. What makes a system successful is its ability to generate lots of losers, recognize them as such and then kill them off. Sometimes the messiest approach is the wisest.
Diversity helps because it adds perspectives that would otherwise be absent and because it takes away, or at least weakens, some of the destructive characteristics of group decision making.
We know that the crowds that make the best collective judgments are crowds where there's a wide range of opinions and diverse sources of information, where people's biases can cancel themselves out, rather than reinforcing each other. Individual irrationality can add up to collective rationality.
Decision markets are well suited to companies because they circumvent the problems that obstruct the flow of information at too many firms: political infighting, sycophancy, and a confusion of status with knowledge. The anonymity of the markets and the fact that they yield a relatively clear solution, while giving individuals an unmistakable incentive to uncover and act on good information, means their potential value is genuinely hard to overestimate.
Studies have found that groups of smart and not-so-smart people almost always do better in decision making than a group just of smart people. The development of knowledge may depend on maintaining an influx of the naïve and ignorant, because competitive victory does not reliably go to the properly educated. My take-away: Teams I've worked on always benefit from the fresh perspective of a newcomer.
Homogenous groups are great at doing what they do well, but they become progressively less able to investigate alternatives. It also fosters the palpable pressures toward conformity that groups often bring to bear on their members.
Diversity contributes not just by adding different perspectives to the group but also by making it easier for individuals to say what they really think.

Independence

Paradoxically, the best way for a group to be smart is for each person in it to think and act as independently as possible.
Independence doesn’t mean isolation but it does mean relative freedom from the influence of others.
Independence is critical for two reasons 1) it keeps mistakes that people make from becoming correlated; 2) independent individuals are more likely to have new information rather than the same old data everyone is familiar with.
If you want to improve an organization's or economy's decision making, one of the best things you can do is make sure, as much as possible, that decisions are made simultaneously rather than one after another.

Decentralization

What do we mean by “decentralization?” Power does not reside in one central location, and many of the important decisions are made by individuals based on their own local and specific knowledge, rather than by an omniscient or farseeing planner.
Decentralization’s greatest strength is that it encourages independence and specialization on the one hand, while still allowing people to coordinate their activities and solve difficult problems on the other.
A decentralized system can only produce genuinely intelligent results if there's a means of aggregating the information of everyone in the system.

Aggregation

Groups generally need rules to maintain order and coherence, and when those elements are missing or malfunctioning the result is trouble. Groups benefit from talking to and listening to each other, but, paradoxically, too much communication can make the group as a whole less intelligent.

Cold calls replaced by free software??

2006-03-12T17:01:00.000-07:00

Jonathan Schwartz (Sun’s President) has a provocative post suggesting that free software will replace cold calls. I can see this working in some categories and am all for reducing cold calls that aren’t the most productive use of time for either the caller or callee. For categories where this won’t work or isn’t sufficient, I’ve suggested some more effective tactics than the traditional methods of acquiring customers.

What a 6 months! Dalai Lama & Vienna Boys Choir

2006-03-11T21:23:00.000-07:00

It's an interesting coincidence that exactly 6 months apart on 2 days associated with sadness (September 11th and March 11th) that I'd attend two uplifting events with the Dalai Lama (on 9/11) and tonight the Vienna Boys Choir. When I shared my Dalai Lama experience, I mentioned how people thought moving to Sun Valley meant less access to cultural events. I've found the opposite to be true. I decided yesterday I wanted to go to this when I saw it on www.sunvalleyonline.com and tickets were still available. This would never have been the case in Seattle or any other big city. So in the last year, I've seen a Nobel Peace Prize winner, one of the foremost violinists in the world and perhaps the most famous choir in the world for a combined total of $20. This area has an extraordinary ability to draw world class talent across the arts and athletics and I feel fortunate to be able to expose my kids to it.

technorati tags: sunvalley, dalailama, life2.0

Web 2.0 naysayers & lessons learned

2006-03-10T10:35:00.000-07:00

Tim Oren and Peter Rip have very reasoned commentary on the hype surrounding so-called Web 2.0 companies. That doesn’t mean there aren’t lessons to be learned from some of the go-to-market strategies associated with Web 2.0 companies that can be applied to a variety of software businesses.

technorati tags: web2.0, web_2.0, web20enterprise

What comes around, goes around (for the good)

2006-03-10T08:52:00.000-07:00

New VC blogger Matthew McCall has a great post entitled A Glass of Milk that captures my view of karma. Welcome Matthew! I look forward to reading more.

Apple-apore - If Apple were a country

2006-03-08T17:38:00.000-07:00

I’ve been tempted on several occasions to buy an Apple product. My wife used to work there and I have a relative who works there so I have some personal connection to the company but I never make the move. It’s not because they don’t have nice products with great industrial design, etc. I finally realized why I don’t make the leap. It’s because the way they treat their customers, employees and the industry reminds me of my experience visiting Singapore. At first, it can be very appealing when you visit Singapore. It’s very clean, well-run, etc. but there’s the level of control that they dictate to their citizens that runs counter to my desire for independence and can be very stifling. Likewise, Apple/Jobs can be very controlling and vindictive. There is the well publicized move to ban any Wiley books (see Wikipedia article for more) since they published an unauthorized biography and then the time they sued a blogger. I also have read accounts of their DRM that has scared me away from iTunes/iPod. I also don’t like how they force iTunes on you when you download the QuickTime viewer. Finally, in an age of transparency, they operate as a closed society with only their emperor (Jobs) allowed to speak. Thus far, I’m willing to deal with some of the headaches associated with the Wild West that comes with the PC world as opposed to living in “Apple-apore”.

technorati tags: apple, singapore

Live to Work or Work to Live

2006-03-05T21:08:00.000-07:00

Rich Karlgaard is the Publisher of Forbes magazine. He wrote a book entitled Life 2.0 – How People Across America Are Transforming Their Lives by Finding the Where of Their Happiness. I’ve only read excerpts from the book but it seems to capture the decision that an increasing number of people have made including me. That is, choosing where to live and then figuring out what profession best fits with your talents. As I mentioned in my New Year’s Resolutions for Googlers, I’ve been brutally reminded of the old adage “life is short”. Part of choosing to live a life without regret is going for it whether it comes to fulfilling a dream of living in the mountains or leaving the stability of a big corporate environment.

I met Lance Trebesch recently and I think we both realized we’re kindred spirits. One of my take-aways from our chat was we were in agreement that we Work to Live, not Live to Work. Don’t get me wrong, we’re both passionate about our work but it comes down to what defines you. Is it your family, your friendships, your recreational interests or what you do at work? For me, I’d like to think it’s a combination of those things rather than what I have observed with many – i.e., work defines their identity. I’ve met many people over the last few years who made a similar decision to me where they’ve chosen where they wanted to live first and then figured out how they’d make it work professionally. Most of us are working as much as we did when we lived in the Bay Area/Seattle/New York but we have 1-2 hours per day back in our lives that get spent with our families and recreation since we don’t have gnarly commutes.

Successful companies like RightNow Technologies have turned their location (Bozeman, MT) into a competitive advantage. I find it amusing how many of my tech industry colleagues will state in one breath how technology has collapsed distances yet in the next have skepticism about people such as myself who’ve chosen to work “remote” (whatever that means these days). People have implied or explicitly stated they can’t imagine how you could be serious about your career while working outside one of the traditional tech hubs. Are they luddites or just jealous J?

technorati tags: web2.0, web_2.0, rightnow, forbes, life2.0

Podcast-oriented Angel investment

2006-03-03T11:24:00.000-07:00

As a result of spending some time in the Podcast world (e.g., my presentation and interview with the leader of a Kleiner Perkins funded company Ron Bloom – Podshow’s CEO who co-founded Podshow with Adam Curry), I’m starting to see some very interesting early stage podcasting oriented companies. We’re barely in the 1^st inning of a long ballgame so I’m convinced there are many opportunities out there that complement some of the companies you may have already heard of such as Podshow. If you know someone interested in making seed stage investments in podcasting-oriented companies, let me know. I’m happy to connect you with them (they are in stealth mode so I can’t mention their names yet).

technorati tags: podcast, angels, angelinvesting, podshow, podcasting

The Truth about your life in sales - 10 tips for Sales

2006-02-26T06:50:00.000-07:00

If my friend Doug Weaver had a blog, it would be at the top of my RSS Reader reading list. It’s rare when I chat with Doug that I don’t pick up some nugget of wisdom. His longer thoughts are great too and you can get them by signing up to his “The Drift” newsletter. Doug’s focus is sales development for online advertising and marketing organizations and his client list has some of the strongest sales organizations which is no coincidence. In a recent newsletter, he has 10 tips that are well worth reading. Though his focus is online ad sales, most of these are broadly applicable especially since we’re all in Sales regardless of our titles if we’re working with young businesses trying to gain market traction.

The Truth about your life in sales.

The opposite of yes isn’t no. The opposite of yes is anything except yes. Buyers just don’t say no. To quote Guy Kawasaki, “there’s just no upside to communicating a negative decision.” If you haven’t heard yes; if you haven’t gotten true commitment – and you’re always sure when you do – then you’ve been turned down and you’ve got more work to do. Save hope for things like Middle East peace. It has no place in your forecasting.

Fast is good, but good is better. All your digital appliances and constant connectivity are conspiring to make you look stupid. Just because you can respond instantly to every collection of bits that hit your e-mail or crackberry doesn’t mean you should. Some of the smartest things I ever said are things I never said. A minute or one extra reading can make all the difference in the outcome of a deal, the survival of a relationship, your career.

Stop asking “great questions” and start being interested. A sales meeting isn’t the invasion of Normandy. Stop overthinking and overplanning the conversation. Human beings want to be heard and understood. They want to be appreciated and to feel interesting and wise. The very best salespeople are those who bring a warm curiosity to the meeting. They delight in learning and they listen to understand.

Wherever you are, be there. Sales is a great job, but it can be pretty consuming. When you’re doing it, give it your all. But when you’re not supposed to be doing it – like, say, when you’re with your kids or visiting your aging parents – then let it alone. You don’t lose the spouse and kids because you travel or work long hours; you lose them because even when you’re there you’re not really there. We look back at the 1960s and bemoan a generation of executives who lived at work. Are we the generation who never unplugged?

Clients aren’t monogamous. They don’t even get married. If you’re waiting for a moment when you’ll achieve permanence in a customer relationship, you’re baying at the moon. Your life is going to be more like the one Adam Sandler experienced in “50 First Dates.” Assume you’ve got to keep proving yourself and making them fall in love with you all over again, every single day.

If you’re not different, you’re done. Never forget that every customer has seen hundreds of predictable salespeople and thousands of lame PowerPoint slides before you walk in the door. If you can be only one thing, for God’s sake be unique. Think about the things that a “salesperson” would ordinarily do at a given moment… and then do just the opposite. If you’re not unique, it won’t matter how good you are because you’ll never really be heard anyway.

Trajectory is more important than mass. All those statistics you’ve collected about the size of your audience and your share of the market don’t mean much. Nobody wants to know how much the car weighs; they want to know where it’s going. This is where real vision and leadership matter in a sales organization. If you can’t tell a good story about where your company is going, ask your leadership. If they don’t know, then you’ve got bigger problems than your next sale.

Achievement is terrific, but joy is lasting. Sure, make your numbers. But don’t think that numerical success alone will sustain you. Look at the ten most “successful” people you know and you’ll find that they’re all constantly finding little sources of joy. A great business friendship. A terrific meeting. Mentoring somebody. When your kids grow up they may not know or remember much about the details of your career. But they’ll remember whether you loved your work or not.

Stop fixing your weaknesses. Bad management is like bad education. It’s all about bringing up that “C” on the report card. If you hate getting up in front of a room of 20 people and think you suck at it, you probably do. Build on your strengths instead. Help your manager understand the things that you’re really good at and ask her to help you plan your success based on them. That’s what great managers do. And don’t you deserve a great manager?

There is no number ten. When you’ve said enough, stop. Quit while you’re ahead.

technorati tags: sales, adsales, advertising

Citizens of the Year - my parents

2006-02-24T06:45:00.000-07:00

One of the joys of being a parent is having moments when you are proud of your kids. Most of the time we don’t have as much visibility in the other generational direction – i.e., knowing enough about what your parents are doing to be proud of them (beyond how they raised you). I’m very fortunate to have parents that are as good as it gets from how they raised us to how they contribute to their community. I could go on and on about that but the one area I will focus on is their role as community leaders/volunteers. Their local community (Edmonds, Washington just north of Seattle) recognized them as their Citizens of the Year. Their example has influenced many people including myself to spend significant time working with non-profits which has been very fulfilling. It turns out that a lot of the skills, experience and contacts that are useful for business are very beneficial to non-profits. Some of the organizations that I’ve helped out with include Social Venture Partners (winner of Fast Company’s Social Innovators Award), United Way of King County (the most innovative, successful and awarded United Way in the country) and Climate Solutions (an economic development organization focused on addressing climate change through the development of clean/smart energy businesses). The old cliché “you get more out than you put in” has certainly applied for me. If you haven’t done so, I’d find the non-profits in your area of passion and find out how you can help them. You won’t regret it.

Here’s the article on my parents from the Edmonds Beacon…

By AL HOOPER

The Beacon

Vern Chase. Barbara Chase. Or if you will, Vern and Barbara Chase.

Individually or collectively, Vern and Barbara Chase are who you go to if you want something done.

And for their unstinting efforts to make Edmonds a better place, Vern and Barbara have been named 2006 Citizen(s) Of The Year.

The 13^th annual contest, sponsored by the Sno-King Kiwanis Club of Edmonds and Edmonds Senior Kiwanis in conjunction with the Edmonds Beacon, culminated with the introduction of the winners at Thursday’s chamber of commerce meeting.

“Surprised? I’ll say we’re surprised,” says Barbara Chase, 70. “There are a lot of really wonderful people in Edmonds who are very responsive to any project that benefits our community.”

Vern Chase, 72, a mainstay of the Rotary Club of Edmonds, is particularly proud of his organization’s achievements on behalf of the YWCA Pathways For Women. Trinity House at the Pathways shelter came about through a working partnership between Edmonds Rotary and travel icon Rick Steves.

“We’re just a small Rotary but we manage big deeds,” Vern says.

So do he and Barbara. The selection committee, composed of members of the sponsoring Kiwanis clubs, faced a formidable task when 34 nominations rolled in.

In the end it came down to Vern Chase, a retired port marketing executive, and Barbara Chase, retired now after 19 years in the demanding role of special education teacher.

Did somebody say retired? A mere figure of speech.

Barbara is deeply involved in local clubs and projects: Floretum Garden Club (she became a Master Gardener in 2003 and helps conduct clinics at the Edmonds Summer Market each summer); Edmonds Library board and Cascade Community Singers; Edmonds In Bloom (she recruits judges for the annual contest from the Master Gardeners), the Holy Rosary Church speech program (she’s a judge) … and counting.

“I think it’s important for groups to work together on different projects,” she says.

Vern, meanwhile, serves on the board and executive committee of the YMCA, and supports the YWCA through his work for Pathways For Women. He is past president of Edmonds Rotary, a member of the chamber of commerce’s Economic Development Committee … and counting.

Vern and Barbara also share some missions. They played important roles with the Washington Tea Party, an ad hoc group that helped rebuff a proposed King County sewage treatment plant in Edmonds.

“Aside from sheer time and effort,” says their nominator for Citizen Of The Year, “Vern and Barbara have marvelous leadership skills.”

And here’s the kicker:

The Chases have lived in Edmonds a mere six years. As Portland residents, they reconnoitered the Puget Sound area on various trips. Then they moved here and, in Barbara’s words, “jumped right in.”

“It’s Vern’s fault,” she says of their total immersion in local causes. “He’s extremely organized. It helps us get a lot done.”

Not that they wouldn’t have things to keep them busy domestically – three kids and six grandkids make for a full plate under any circumstances.

No matter. They already have their next project in mind: more and better walking paths in Edmonds.

Think it’s a longshot?

Then you don’t know Vern and Barbara Chase …

Advisory Capital: Alternative to Venture Capital

2006-02-22T11:51:00.000-07:00

Stowe Boyd has articulated an alternative or complement to venture capital that essentially describes Altus Alliance’s business model. We see a gap between what angel investors and venture capitalists offer in the market. To date, we’ve referred to ourselves as “venture consultants” as do others such as Jeff Clavier. We let people know that we go the “sweat equity” route vs. writing checks as VC’s do. He suggests calling what we collectively do “Advisory Consultants” and even proposes an Advisory Capital Code of Ethics heavy on disclosure, openness, and transparency. One challenge I see is that there are lots of wannabees and in-between-jobs consultants claiming to do what we do who might be willing to sign up for the Code of Ethics but don’t deliver on the items laid out in Stowe’s post. From a startups standpoint, at least with VCs, they’ve had to raise capital and had some degree of vetting done by their limiteds. We’d need to go beyond a code of ethics to separate the wheat from the chaff – something akin to an eBay reputation rating though having enough scale would be tough. In absence of that, we let our track record be the foundation for our reputation though our success-based business model is what ends up being most compelling. He wraps up his post suggesting there may be a blending of advisory and investment capital whereby smaller amounts of capital would be invested. We are well down the road on developing a framework along these lines. If you are interested in providing us feedback on what we’ve developed, let me know as we’re in the process of vetting it with entrepreneurs.

Here’s another (Jeff Jarvis’) take:

As VCs find themselves unable to throw big buckets o’ money at ever-smaller, nimbler, quicker startups, it becomes impossible for them to manage their real assets: time, distraction, and knowledge. I think that this provides opportunities for strategic investors who have more than money to offer and also for smart, independent people (such as bloggers, Boyd suggests) who can offer advice, connections, and questions. The challenge is to make this more than a show advisory board but a real relationship and a longer-term commitment for both than old-style consulting (thanks to payoffs in long-term equity). I’ve started down that path with a few companies myself.

Tags: web20enterprise, web2.0; ,advisory+capital , venture+capital

Web 2.0 and the Enterprise panel recap

2006-02-20T07:00:00.000-07:00

There’s been relatively little discussion on Web 2.0 and the Enterprise which is why I wrote What does Vinod Khosla know about Web 2.0 that others don't? that addressed this topic. Jeff Clavier moderated a panel “Web 2.0 and the Enterprise” with three noted bloggers Jeff Nolan, Charlene Li and Ross Mayfield. Zoli Erdos blogged the event so it has the greatest amount of detail.

Tags: web20enterprise, web2.0

Mistakes and missed opportunities: Conference speaking opportunities - 6 Tips for Vendor presenters

2006-02-17T11:59:00.000-07:00

Save This Article for the Next Time You Give a Presentation

Unfortunately, I’ve seen countless mistakes and missed opportunities made by vendors who are given the privilege of presenting at a conference. I consider speaking opportunities to fall under the PR umbrella. I’m a strong believer in the value of PR (not advertising) for young businesses especially those selling to other businesses. PR is much more than issuing press releases despite what you observe. Some of the more effective PR tactics include blogging, speaker placement, bylined articles as well as traditional tactics of press releases, media tours, video/audio news releases, etc. The first mistake startups make is not focusing on getting speaking engagements. Just about every market niche has numerous speaking opportunities that can not only help raise awareness of a company but have ancillary benefits such as employee recruiting and creating a perception of industry leadership that will lead to future speaking opportunities, being quoted in the press, etc. Unfortunately, a good strategy poorly executed can have a negative impact. I recently attended the iMedia Brand Summit and saw both best and worst practices in action. Here are some of the best/worst practices I observed:

1. Avoid a sales pitch. One of my favorite book titles is Clues for the Clueless. I’m blown away how many clueless company execs make the mistake of turning their presentation into a pitch. Potential buyers can obviously hear a sales pitch anytime so they don’t take time away from their busy schedules to come to an event (and pay in many cases) to hear sales pitches. They are many, many ways to avoid the sales pitch by demonstrating an understanding of their challenges, the direction of a technology/market, etc. without having to get into pitching their own product. The byproduct is scorched earth for companies that do get it as they face resistance from conference organizers who’ve been burned. Most conference organizers are happy to provide feedback in advance of a conference. One thing I’ve observed is some companies think they aren’t pitching when they really are. One way this happens is the exec delegates the presentation/speech development to an underling who wants to make the exec happy by including glowing praise of their own company so the presentation is geared towards the exec rather than the audience. An exec should take ownership when they get the opportunity to present in front of dozens or even hundreds of people and ensure they aren’t just making a pitch.

2. Know your audience (duh). This includes knowing the knowledge level of the audience so you don’t patronize them or go over their head. When using examples or sharing stories, what is appropriate for one audience may offend another. If you are trying to sell yourself to a person/company, offending/insulting them isn’t the path to success. That said, humor is a great way of keeping the audience’s attention. For example, a conservative company like P&G exploring a new ad medium might find case studies with salacious images or raw language disconcerting. Unless that represents what the medium is all about, there are usually other examples that can show impact without causing them concern.

3. Put yourself in the audience’s shoes. What obstacles will they have to carry your ideas back to their organizations? If you turn them into believers, make them effective advocates by giving them tools they can carry forward. Making it explicit is even better (e.g., 3 things to tell your CMO).

4. Make the conference organizer’s life easy. Pulling off a conference well is a major accomplishment. The organizers have a ton of details to keep track of. Constantly having to badger a speaker to meet deadlines is a pain. Voltaire has one of my favorite quotes – “Common sense isn’t all that common”. Why would a conference organizer want to invite someone back that has been a pain in the rear to deal with? There are a few people who are worth the grief but don’t flatter yourself to think you are one of them unless your name is Steve Jobs.

5. Make it easy to for the sneezers (influential people who spread “ideas” such as new products, services or theories - Seth Godin’s Unleashing the Ideavirus book goes into great depth on this) and Connectors, Mavens, and Salesmen that Malcolm Gladwell discussed in The Tipping Point to share your insights/leadership to multiply the impact. Most conferences post presentations given at the conference. I’ve never understood why a company that will give a public presentation (typically blogged and videotaped these days) won’t share their presentation after the fact particularly when there are ways to write-protect files. If the company’s viability is threatened by a presentation that is shared, I’d question their ability to survive in general. That’s not much of a competitive barrier. A simple thing like listing your email address at the end asking for feedback and letting them know you will send them the presentation is effective.

6. Build up and Follow-through. A company can do a lot to raise the visibility of an execs presentation before and after the event. Too often, they think of it as a discrete event as opposed to something they can get great leverage out of. This includes highlighting the speech to customers and prospects in ongoing communications, timing the writing of bylined articles around the event, and being aggressive about gathering feedback on the presentation so that they can be better the next time around. It’s also nice to thank the conference organizers for the opportunity.

Naturally, there are other important things such as being coached on giving public presentations but the list above gives you a good start.

technorati tags: presentations, powerpoint, speaking, imedia

Most popular posts from the last year

2006-02-16T07:20:00.000-07:00

I was looking over my traffic reports recently. It was interesting to see which of my posts were most popular.

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

2. 2010 Predictions happen sooner than expected

3. Start small to go big -- the old model is being flipped on its head

4. Excellent series on deal terms, board compensation, etc.

5. Go Slow to Go Fast -- lessons on how to ramp a start-up

6. Review of the “Wisdom of Crowds” book

7. New Year’s Resolutions for Googlers

8. The story behind Microsoft opening up its IP

9. Interactive Marketing Traction -- Agency view from Dave Smith of Mediasmith

10. Uncle Bill’s Words of Wisdom and Kimo’s Rules

Behind the scenes at the Torino Olympics

2006-02-16T06:39:00.000-07:00

One of my clients has a local site SunValleyOnline.com (a potential lab of Web 2.o services) that launched blogs in the Fall. They have been well received (even stirring up some controversy in the local elections in November). One of the locals in Sun Valley happens to be one of the top 1-2 experts in the World for the Ice Dancing discipline of Figure Skating (my wife is a figure skating fanatic so I know a scary amount about skating for someone who doesn't skate). He is blogging from Torino. His first post is up with more on the way. These pics are a sample of his behind the scenes reports on the blog. One is of the NBC Today Show set while the other is a Dutch skating fanatic (note the skate on his helmet). My wife and I are admitted Olympics junkies -- it's just about the only TV we watch and are even renting a DVR for the Olympics further confirming my belief that traditional 30-second spots are dead.
tag: olympics

How do I evaluate companies we invest in? 6 M's

2006-02-15T14:57:00.000-07:00

Like a traditional VC, Altus has to make decisions on what companies it decides to invest its time in. Investment capital is VC’s finite asset while time is our finite asset. I’m often asked “how do you decide what companies you work with?” I thought I’d share my rationale with the readers of this blog. It’s a mnemonic – 6 M’s – that I’ve summarized below.

Market – Is the market opportunity the company is pursuing big enough to support several companies?
Momentum – Does the market and company have momentum in terms of the market growing, the company gaining traction either in product development or better yet market adoption?
Model – Does the company have a compelling business model to capitalize on the opportunity?
Moat – Is the company’s strategy defensible as any interesting market opportunity is going to see many competitors?
Management – This is a huge. I believe in betting on the jockey (vs. the horse). This doesn’t mean the company’s management has to have had several exits. In fact, there’s a long list of 1^st time entrepreneurs with massive successes (Bill Gates, Steve Jobs, Sergey Brin, Rich Barton…). Quite frankly, we add the most value to 1^st time entrepreneurs since we’ve been through many of the challenges a 1^st time entrepreneur will face and as long as they are coachable, they will benefit from our experience. One of the other critical things for me is my own policy of refusing to work with jerks/egomaniacs. Though I will miss opportunities (e.g., I would have passed on Larry Ellison), I simply don’t want/need the grief of working with that type of person and more often than not, they are going to have a tough time keeping a top team around them. As successful as Oracle has been, I wonder how much more successful they would have been had they been able to retain senior execs as well as Microsoft.
Money – Since we typically start working with a company post-angel and pre-institutional funding, they need to have enough runway to be able to get the plane off the ground. If they are constantly chasing their funding tail, it’s hard to build much of a company.

We always enjoy chatting with leaders of companies that have a strong handle on the 6 M’s yet have some gaps to fill that sync with our focus (i.e., helping a company gain market traction via business development, sales and marketing).

Zillow - Feature, Product or Company?

2006-02-15T07:57:00.000-07:00

One of the things that I evaluate when looking at investing time with a company is whether I perceive it to be a feature, product or company. For example, Apple’s iLife is a product made up of several features such as the Speech Enhancer in Garage Band which is a feature. When the totality of a company’s IP consists of a feature is going to have different growth/revenue/exit potential than a company that has a core product with other products in the pipeline. Thus the winning strategy is going to be quite different from one company to another.

In the case of Zillow, there was a lot of hype about the company due to the caliber of its founders (e.g., Rich Barton). Anyone who has had the kind of success Rich has had, has a free pass when it comes to raising money the next go-round. The old adage is bet on the jockey not the horse (side note: interesting to see that it works better in venture capital than horse racing). It will be interesting to see what Zillow does with the $32 million they raised as you’d have to think they’d do much more than a simple home value estimator. Why? As readers of this blog know, I worked on HomeAdvisor Technologies Inc. (HTI) that was to be the next business to spin out of Microsoft after Expedia (unlike Expedia we missed the window to have the public markets fund it to profitability when the market crashed). One of the more popular features of the consumer site was a home value estimator. By virtue of HTI’s loan platform business (later sold to Freddie Mac), we had a relationship with Freddie Mac (as well as Chase and GMAC-RFC which were investors in HTI) so we had access to great data that Zillow is having to acquire. The estimates were accurate enough that in many cases Freddie Mac only required a “drive by appraisal” (i.e., the lender would just have someone drive by the house to ensure there weren’t any glaring issues) for its lending requirements. In other words, it was at least as accurate as what Zillow is doing now.

The advantage Zillow has today vs. what HTI had are significant so they may be able to turn this feature into a company.

The Internet ad market is much more developed so there are better ways to monetize this sort of feature.
HTI was still a part of Microsoft so it was greatly hampered in what it could do (thus one of the major reasons Rich was able to argue why Expedia should be spun out – that’s a whole other topic on how big/established companies have a tough time expanding their reach into new vertical markets).
Consumers have continued to rapidly change their behavior in the last 5 years and are more open to self-directed web services and a la carte home buying/selling services.

That said, I’ll remain dubious of their prospects until I see more. Finding out what your house is worth isn’t a sticky feature (consumers typically buy a new home every 7 years) so it requires a great monetization machine such as what HouseValues has done. My prediction is that traditional advertising alone won’t sustain their model. Rather, they will have to find a way to take a cut of the commission (35% of the commission has been typical of a referral fee that organizations like Cendant Mobility receive from agents/brokers). From that standpoint, Zillow is better off if the commission rate stays high. The other item tech industry people shouldn’t forget is that a real estate purchase is a far more emotional purchase than something like airplane tickets and is particularly daunting for new home buyers. It’s typically the largest purchase they’ll ever make so working with a Realtor is a form of insurance (i.e., it’s only worth it when things go wrong which isn’t rare). I like John Cook’s analogy of Paul Bunyan and Zillow that compares the efficacy of a human-derived value vs. a machine-derived value though Realtors are really doing both since they have lots of data they draw upon combined with their on-the-ground expertise. For more on consumer reaction, you can get Zillow’s spin on their blog written by Lloyd Frink (another high caliber ex Microsoft and Expedia leader).

tags:zillow, web2.0

Interview with PodShow CEO Ron Bloom

2006-02-07T15:36:00.000-07:00

Update: The presentation referenced below just happened. As promised, I tagged articles, data, best practices and podcasts I reviewed in preparation for the discussion with Ron Bloom. We didn't end up having much time for questions so I will post the questions/answers we didn't get to when Ron responds to those questions. If you have any you'd like asked, please comment below. Ron indicated his team is in the middle of a launch so it may be a few weeks before we see responses.

Every February, iMedia puts on what many people feel is the go-to event for decision makers in the online advertising world. They consistently have top notch speakers in a venue that lends itself to casual interaction between all facets of the online ad industry (brand marketers, publishers, ad agencies, ad networks, technology suppliers, research firms, etc.). I was honored to be asked by Rebecca Weeks to give an update on podcasting and interview Ron Bloom. Ron is one of the most prominent names in the business side of the podcasting phenomena as he co-founded PodShow (he's their CEO) with Adam Curry who has been one of the key players in the podcasting arena. Together they raised $9M lead by the top tier venture -- Kleiner Perkins -- so big things are expected of them.

In the spirit of the blogosphere, I'd like to get your input on what questions you'd like me to ask Ron. After the event, iMedia always posts the presentations as well as a recap of the speech so you'll have a chance to see the recap plus I'll share my perspective. Prior to the event, I'll be tagging (http://del.icio.us/tag/iMediaPodcastPresentation) various articles and interviews that I feel are relevant to the discussion with Ron. These include some past interviews with Ron. My goal is to cover some new ground.

I'd like to reach out not only to key commentators who discuss podcasting such as Charlene Li, Fred Wilson, Joseph Jaffe (podcaster & podcasting commentator), Robert Scoble, Seth Godin and Steve Rubel but also the many folks that I know at ad agencies, brands, the ANA, technology companies, etc. Ron Bloom is certainly one of the key players shaping the business side of podcasting. What questions do you have for him that haven’t been answered? The audience will be marketers so naturally the bent will be towards to implications of podcasting for marketers. Here are a few initial thoughts of what’s on my mind. What’s on yours? Please add your comments or post your thoughts on your own blog with a trackback.

Having introduced new ad types into the mix, I know that research/metrics is always important to getting broad scale adoption so I’ll ask him about what’s been done and what the remaining gaps are and how they’ll be filled.
Who, in the marketing community, is doing the best job of utilizing the medium and its strengths since too often marketers just want to bring over what worked in some other medium and assume it will work.
On a related note, what are some best practices of advertising in and around podcasts? We know that the bane of radio advertisers is radio presets. What would make someone listening to a podcast not just skip through a traditional sounding audio ad?
If blogs are any indication, the so-called Long Tail will have as big an effect on podcasting. How far down the tail will PodShow go and why? How much will the “big boys” drive initial adoption of podcasting vs. the podcasts on the Long Tail?
PodShow has launched what they are calling the PodSafe Music Network (PSN) to address rights issues preventing more music from entering the podcasting arena. Should marketers care about PSN? Why?
If I’m a marketer with $5M to spend on podvertising, can I do it efficiently and measure results in a way that’s integrated with the rest of my ad buys?

I’ll add more over time and eventually filter these down to which topics bubble up to be of greatest interest.

tags: podcast, podcasts

Outing advertising vermin ("advermin")

2006-02-07T07:56:00.000-07:00

Dictionary definition of Vermin:

Various small animals or insects, such as rats or cockroaches, that are destructive, annoying, or injurious to health.
1. A person considered loathsome or highly offensive.
2. Such people considered as a group.

My definition of "Advertising Vermin" -- aka advermin: Various small ad servers and cockroach like advertisers who circumvent pop-up blockers to offensively interfere with a Internet user's experience thereby demeaning the Internet as a legitimate advertising medium in the eyes of consumers. Ex: tribalfusion, classmates.com

I have always detested companies that use pop-ups/unders and vowed to never do business with them but it's gotten worse. Vermin like TribalFusion and Zedo not only serve pop-ups, they have found a way to circumvent pop-up blockers running on both Firefox and IE from a variety of companies such as Google and Microsoft. I believe in the "New Media Deal" ideas put forth by Matt Blumberg. By no means am I anti-advertising. Quite the contrary as I've been a big supporter.

I hope others can help my little battle to make the vermin who serve and pay for these ads suffer in the market. I've created a del.icio.us tag "advermin" where I'm tagging any company that serves or runs ads. Sexual predators have been thwarted by various registries that let people know about them. Perhaps this tag/registry will thwart the Internet Advertising Predators who are damaging the landscape for legitimate advertisers. If you have the experience I've had, tag the perpetrator with the advermin tag. I've started the registry with the following:

Pop-up Servers: TribalFusion, Zedo, Casalemedia, Fastclick
Advertisers: Classmates, yourgiftcards.com (promoting Chilis Restaurant, Ruby Tuesday & Red Lobster coupons and a Visa Gift Card -- if I was a brand steward for any of those, I'd get them to stop as the ads look like they are coming from those companies), screensavers.com, everyfreegift.com

As fate would have it, I've been a paying customer of the first advertisers I've listed so it's not an idle threat to take my business elsewhere. While the readership of my blog is modest, I know plenty of thought/opinion-leaders like Joseph Jaffe, Fred Wilson, Brad Feld, Jeff Clavier, Seth Godin, Michael Arrington, Matt McAlister, Matt Heinz, Jeff Jarvis, Steve Rubel and others desire to have a healthy Internet-based advertising market and don't want to waters polluted by vermin. They can certainly amplify the message. I also wonder where Bob Liodice of the Association of National Advertisers feels about this trend.

Race week - Boulder Mountain Tour

2006-01-31T05:44:00.000-07:00

It’s funny the mixed feelings I have leading up to a race that I’m going to compete in. This week is the Boulder Mountain Tour north of Sun Valley, Idaho bringing in 1000 people from all over the country for the 2^nd largest Nordic skiing race in the country. It’s a 32 kilometer race (~20 miles) so it’s considered a “Nordic marathon” albeit one on the short end (many are 50k). On the one hand, I’m as fit as I’ve been in awhile – no excuses with the trails out my backdoor and having nearly 2 hours back per day in my life without a commute. I only miss a handful of days a year working out as a result. I was surprised when I was randomly selected at a meeting for a body fat test and it was only 5%. On the other hand, I also find myself thinking that I’m not very fit with the accompanying excuses – work/family limits the duration of my workouts, my skill level (big factor) in Nordic is mediocre, I missed a week of training 2 weeks ago due to a knee injury, etc. Also, when you live in a place like Sun Valley, there are some super fit people who are nearly fulltime athletes and I simply don’t have the time/desire to put that commitment into it. There are guys in their 50’s and 60’s that would kick the butt of 99.9% of those under 30 not to mention the 20 & 30 something skiers in the race.

Barring extreme cold (see this interesting article on Nordic skiers getting asthma from racing in extreme cold) or injury, I’m going to be out there Saturday. It’s a fun, well run event with lots of great people to ski with. Check out some of the pics to get a feel for the race – the scenery is fantastic. Last year was fun despite my 4 crashes – the course was icy in spots since there hadn’t been fresh snow in weeks. We may have the opposite problem this year with a soft course due to all the snow we’ve been getting. I went out yesterday on part of the course and it was definitely soft/slow.

Update: The excerpt below from an article on the race captures how challenging the race ended up being. The picture above (courtesy of the Wood River Journal) gives you some feel for the amount of snow coming down and the mayhem created at the finish line.

It was a worst-case scenario—heavy snow starting 30 minutes before the race start at Senate Meadows near Galena Lodge, and continuing for nearly the entire two-and-a-half hours that it took to get 782 racers across the finish near the SNRA headquarters.

Chief of Race Rick Kapala said, "It was a really, really tough race, hard for the average competitor. It was tough for the lead racers, too. We had a lot of reports of stepping on skis and banging poles. The snow made it impossible to pass because you got bogged down in soft snow. It was also impossible to ski in front."

Though my time was worse this year (the winners were even slowed by 15-20 minutes), I managed to move up about 160 places which I was pleased with given the conditions (it was extremely tough to pass). I also felt fresh at the end unlike last year. I've never skied in worse conditions in terms of visibility and saw many crashes as people veered off the course or tried to pass and buried their ski tips in the snow banks.

Podcasting momentum -- it's personal this time

2006-01-30T17:00:00.000-07:00

I finally joined the MP3/iPod revolution. I've been listening to podcasts for some time but like 80% of the podcasting audience, I've listened to them via my PC. There have been two main reasons why I've held off.

Since I don't have a commute (a common time to listen to podcasts), the other logical time to listen is while I'm working out which I do every day. I guess you could say that I've been a purist not wanting something to blunt the suffering I do when I'm working out -- some kind of odd remnant of being a middle distance runner where the runner who is willing to suffer the most often wins.
Apparently I have sensitive ears as I've never been fond of little earbuds in my ears. I'm willing to trade one pain for another now that I'll be lulled into a podcast stuper during my workouts :)

Two items kept me from buying an iPod.

I don’t care for Apple’s corporate practices such as how they sue bloggers, keep their audio formats proprietary, etc.
I found a MP3 player that is perfectly adequate for my needs including having the ability to record messages (at 1/3 the price). This is handy when I’m working out as I often have ideas I don’t want to forget while I’m out on the trail. My last voice recorder mysteriously disappeared (having a 2 year old in the house makes this a somewhat frequent occurrence).

On a more macro level, market growth figures for podcasting are interesting to track. Here are some figures in the Bridge Ratings:

5 out of 300 have downloaded a podcast
20% of those people listen weekly
The average user downloads 6 podcasts and spends 4 hours listening per month
Only 20% use the MP3 format to listen
By 2010 a median estimate is that 60 million people will be downloaders of podcasts

(Hat tip to RSS Applied for pointing out these stats)

Google and Microsoft - Lessons why you never say never

2006-01-30T06:30:00.000-07:00

Mike Langberg of Knight-Ridder has a good piece describing how Google is increasingly having to eat its "Don't be Evil" words. At a young age, my parents often told me "never say never". I've certainly learned that as a parent but it's also applicable in the business world where there are few absolutes in a dynamic market. Early in the days of focusing on vertical markets at Microsoft, some of my counterparts would say "Microsoft will never do vertical applications" in response to questions about how IBM and others who'd been "partners" had turned around and competed with them. Though it was hard to imagine when we were such a tiny group that Microsoft would ever do vertical applications, I'd resist the temptation to say that as there's little I hate more than having to eat my words. Instead, I'd give partners a few insights into how Microsoft thinks. In this case, it was the fact that Microsoft's DNA is to only do things that can be sold in millions (or at least 100's of thousands) units. That does indeed eliminate most vertical applications but there are some exceptions as the later acquisitions of Great Plains (and others) show.

Benefits and best practices for marketer podcasts

2006-01-29T16:54:00.000-07:00

As I mentioned in an earlier post, I’m co-presenting with Ron Bloom (CEO of PodShow) at the upcoming iMedia Brand Summit that starts next weekend. I’ve been tagging various relevant articles, podcasts, etc. and have invited others to do the same. One of the items that I have tagged is a whitepaper from Podblaze. While I’ll be addressing podcasting more from the vantage point of podcasts as an ad medium, it’s also good to know how podcasts that you create yourself can be helpful for your business. Not unlike websites, many marketers will both have their own podcasts as well as advertise on podcasts (e.g., to drive listeners to your podcasts).

10 Benefits to Adding Podcasting to Your Marketing Mix. There are also additional benefits that may apply to your specific product, brand, service, or niche that may not be listed here.

An additional communication tool for your business.
Increased online visibility to your target market.
Increased internet visibility from the search engines.
Increased internet visibility & traffic from the RSS, Blog & podcasting directories. What You Don’t Know About Podcasting Could Hurt Your Business: How to Leverage & Benefit from this New Media Technology.
Communication medium is more powerful than text. This means increased potential results for your marketing message.
Improved level of perceived expertise from your target market.
Value added offerings to your target market that are only available in audio format.
Increased mind share from your target audience. People listen to podcasts while doing other tasks online. They can also take you messaging with them on their portable media player such as an iPod.
More frequent touch points and more frequent “top of mind” participation from your target audience.
Increased perception of your product, service, brand or value in customers minds.

Podcasting Best Practices: The following best practices should be applied to your podcast to achieve maximum effectiveness:

Know your audience/target market.
Be organized in the messaging that is to be delivered
Have notes & an outline to keep the show on topic
Edit show appropriately for both content, quality and length
Deliver valuable, informative, engaging and entertaining content to your listeners that they can’t get from any other media.
Ensure good quality audio by using proper recording hardware and software
Provide show notes for listeners to review content of the show before and while they listen to the podcast
Use proper tagging of Meta data so that you podcast can be found and organized easily by podcasting software and directories.
Ensure that the RSS feed for the podcast is valid and in compliance with the 2.0 standard. Additional functionality is required if you want the podcast to be apple iTunes friendly.
Submit your podcast to the popular directories so that your podcast can reach a greater audience.
Ping the major podcasting, RSS and Blog directories after each podcast to ensure that your podcasts are updated.
Have the proper web server technology that can handle delivering the content quickly and be able to handle the server bandwidth issues. Don’t underestimate the importance of this critical point.
Have an experienced podcasting consultant design, map, and oversee the entire process to ensure success the first time. This will ensure that you will achieve maximum market impact with this new media format. Your audience will not be forgiving of a poorly executed podcast strategy.

Few great ideas happen inside a conference room

2006-01-29T09:56:00.000-07:00

In my career, I’ve seen very few great ideas come out of a conference room setting. Everyone seems to accept that inspiration comes from other places so why is it that most offsites are in bland conference rooms, hotel meeting rooms, etc.? Earlier this week, we tried to practice what we preach by having our firm’s leadership team come to Sun Valley for a mix of work/fun. Thankfully we all enjoy skiing/riding fresh powder. Here’s a pic from when we were heading out on a typical Sun Valley bluebird day.

Business Plan writing tips

2006-01-27T06:17:00.000-07:00

Nearly every business needs to write a business plan whether they are raising money or for their own strategic planning purposes. I’ve begun tagging some compendiums of tips via Del.icio.us that you can check out here. If you are interested in being notified of new articles I tag, add this RSS feed to your RSS reader.

Option value

2006-01-20T12:18:00.000-07:00

Fred Wilson has another good post – this one on option value. I’ve highlighted a couple excerpts below…

Option value means the potential for a gain. If you own 20% of a company, you own 20% of the current value plus 20% of the potential upside. It's the latter that I am calling option value.

So the next time you buy or sell early stage stock, think less about the current value of what you are buying, because there honestly isn't much value in an early stage company, and think more about the potential value creation, the odds of success, and the time frame it would take to get there, and value what you are buying or selling as an option. You may be surprised at the results of that analysis.

Brand T&E -- what's good for the Ritz is good for you

2006-01-20T06:38:00.000-07:00

Joseph Jaffe proffers the notion of Brand T&E lifting the idea from sales where a good sales person fully utilizes their travel & entertainment allocation to build/maintain loyal customer relationships. The Brand T&E notion makes a ton of sense whether you are a consumer or business brand. It’s easy to go hunting for new customers when in fact your loyalists can often have an even greater impact than you can due to their perceived objectivity. Worth a read…

2010 predictions starting to happen sooner than expected

2006-01-16T12:52:00.000-07:00

[Originally posted in May 2006] A little while back, I had this post about 2010 predictions for the Interactive Marketing industry. Much to my surprise, one element of the predictions is already kicking in (i.e., online ad models transferring to other mediums). Boston Globe makes the first move. Considering they are a part of the NY Times family, I'm sure it won't be the last move you see from the NY Times Company.

Update: Google buys a radio advertising firm

Lab for Web 2.0 publishers?

2006-01-03T18:20:00.000-07:00

I have a friend that has a nice business focused on a local market – Sun Valley,Idaho (yes, the famous ski resort). With the plethora of Web 2.0 services coming out, it struck me that some of those Web 2.0 might want to showcase their services on a site that gets disproportionate visibility to the size of its local market since it’s by far the #1 site for Sun Valley and is visited by both visitors and residents. The visitors are a virtual who’s who of the VC and corporate world (not to mention Hollywood). I’m certain they’d be open to testing some things out whether it was an end-user service or a back-end technology. Perhaps one of the companies that Michael Arrington has highlighted on TechCrunch. If you know a company that would like to highlight their service on a local information site, let me know (see my profile for my contact info). As an added bonus, they can write off a trip to Sun Valley since it will be business. With the dumps of snow Sun Valley has been getting this winter, that isn’t a bad thing. Here’s a pic from near the top of the mountain on a typical day.

tag: web2.0

Web 2.0 mashup matrix

2005-12-28T07:19:00.000-07:00

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.

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

2005-12-27T12:04:00.000-07:00

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 1^st 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.

Adam Bosworth’s presentation (launches a presentation window with audio) on Intelligent Reaction vs. traditional method of product development.
Greg Gianforte book called: "Bootstrapping Your Business: Start and Grow a Successful Company With Almost No Money" that he summarizes here.
VC blogs by Fred Wilson, Brad Feld, Jeff Clavier, Ed Sim (coincidentally, he just had a related post) and Bill Burnham that have many useful insights for entrepreneurs.
Blogs focused on the topic of Corporate Blogging (and more) from Steve Rubel, Shel Israel and Robert Scoble
Michael Arrington does a nice job of keeping up to date on new Web 2.0 offerings
See my blogroll for others -- http://www.bloglines.com/public/chasedave
Other bloggers who’ve commented on the Enterprise Sales Learning Curve include Ross Mayfield,Steve Rucinski, David Cowan, Torsten Jacobi, Damon Darlin, Ken Dyck, Pelle Braendgaard, Dave Bayless, Venky Ganesan, and Tim Oren.

tags: web2.0, saleslearningcurve

New Year's resolutions for Googlers

2005-12-26T10:43:00.000-07:00

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.

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.
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 clichéd 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…

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.
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.
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 1^st 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!).
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.
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.
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).
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.

tag: google

Those *(#& pop-ups are back

2005-12-18T20:11:00.000-07:00

Is anyone else getting more and more pop-ups sneaking through your pop-up blocker? I mainly use Firefox and I’m 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? I’ve used some of the big 3’s toolbars that supposedly block pop-ups and still am getting pop-ups where I didn’t before.