Web 2.0 mashup matrix

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

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

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

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

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

1. I was fortunate to work at Microsoft during a similar period of time that Google is experiencing right now – tremendous revenue growth, explosive stock, round-the-clock work ethic and tremendous influence over the technology industry. As Mark Twain said “History may not repeat itself, but it rhymes”. Both companies have also been very effective at making it very, very easy to stay at work as long as possible. Microsoft pioneered some of these approaches but Google has taken them to a new level.
2. I was unfortunate to have had 6 friends/co-workers die at a young age (in their 20’s & 30’s) during my tenure at Microsoft. This puts work into perspective very quickly especially having seen the full continuum of people dying without regret to those who died with the 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…

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

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

tag: google

Those *(#& pop-ups are back

Is anyone else getting more and more pop-ups sneaking through your pop-up blocker? I mainly use Firefox and 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.

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

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

 

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

 

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

NDAs -- asking is a death sentence

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

Bill Snow did a good job of capturing the issues in this post. Here are a few highlights:

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

Back in the saddle -- Entrepreneur feedback wanted on new funding model

My apologies for going "radio-silent" (side note: I don't need to be told by the bloggers that I read that "posting will be light" so I didn't think you needed to be told ahead of time -- my thinking is that would just waste your time and you can survive just fine without my blog posts).

The combination of being super busy with client work while getting ready for a Kauain vacation was enough to keep my plate full but we (Altus Alliance) have been evaluating whether there's an evolution of our model that further addresses the apparent gap between typical angel funding and institutional funding. Though VCs sometimes get demonized, there are plenty of situations where their funding/value-add are the right mix but there are also plenty of situations where there isn't a fit for any number of reasons. The most common is the growing minimum size investment that most VCs have to put to work. Paul Graham outlines this in his "VC Squeeze" post along with other useful observations about the challenges VCs face. The short version is that most VC funds these days need to be at least $100M since their investors ("limited partners") don't want to invest less than $10M and don't want to own more than 10% of a fund. Given that VCs don't have unlimited resources, they can't do 50-400 $250k-2M investments or they'll be stretched way too thin. The resulting issue is that many companies don't need the size of investment that VCs want to make - particularly the kind highlighted at the Web 2.0 conference and discussed in the VC panel.

We believe that there is a new model that can address this gap/opportunity as a result of a budding alliance we have to a complementary firm that has done much of the heavy lifting to getting this innovative approach to this point. Since I buy into the notion that the Entrepreneur is our Customer, we're now at the point in the process where the concept is baked enough to get some feedback from entrepreneurs. We're reasonably confident of the receptivity that investors in this model and follow-on investors (if required) will have. It's all moot if it doesn't make sense from the entrepreneurs' standpoint. If you are an entrepreneur who'd be willing to provide us feedback, I'd love to chat with you and find out whether this thing has legs or not. If it does, I'll share more of the details on this blog. [My contact/email is posted on my blog]

For those of you interested in knowing more about Kauai, here's my quick take...

• My first trip to Kauai. Having visited all the other big Hawaiian islands, I'd say Kauai is my favorite. If you read the profile on my blog, you know I'm an active guy so sitting on the beach isn't my idea of fun and though I enjoy the game, I don't consider golf to be exercise since it's free of adrenaline rushes and/or doesn't make my lungs burn. If/when I have limitless time, golf will come back into my mix but it takes too dang long for the payback at this point in my life.
  
• In a word, it's beautiful. I've been fortunate to have visited 30+ countries on 5 continents and would say that Kauai has some of the most beautiful terrain I've seen anywhere.
• The rain factor is overblown (note: I subscribe to the belief that there's no such thing as bad weather just bad clothes so take my comments in that spirit). There's virtually always some part of the island (and it's not that big) that is dry if that's what you are looking for.
• Bring your hiking shoes. We were constrained by little kids and no one to look after them so our hiking was limited. We got a small taste and will come back for more when the kids are a bit older.
  

Bloggers & the PR cycle

Getting PR coverage for startup businesses is increasingly difficult. Steve Rubel shares words of wisdom on How Not to Pitch Bloggers. He also includes related links such as How to Pitch Bloggers and a concept borrowed from eBay applied into the News Curve covered in an article entitled How to Pitch Into The Long Tail News Curve. It can also be helpful to know how to find influential blogs that reach your target audience.

This relates to an earlier post of mine on how PR (not Ads) build brands. Wasting money on ads would be in my Top 10 list of how startups waste precious cash.

Electronic Medical Information heating up

As I noted in an earlier post, I bought into the notion that Fred Wilson had originally laid out about the opportunities in healthcare related information. Seattle-based Nexcura is one example of this phenomena and it wasn't lost on Thomson who recently acquired this profitable company.

Book recommendation: Life after the 30 second spot

I've been meaning to write a review of Joseph Jaffe's new book entitled Life After the 30-second spot but Dave Morgan beat me to the punch. His review is in iMedia's Book Club. Thanks for saving me time, Dave!

If I was in my old role of championing interactive advertising (e.g., on the board of the IAB, Chairman of the CMO council, etc.), I would encourage every online sales organization to have their sales people hand deliver the book to key decision makers at major brands and agencies. There aren't many better tools to shake up their thinking than this book.

Like his presentations, Joseph is always entertaining, thought-provoking and chock-a-block full of ideas that can be put into practice. Joseph was on fire in this book. He even presents his 10-step plan for members of the 30-secondaholics anonymous.

Joseph has been popping up all over sharing his insights related to his book.

• ABC World News This Morning (Windows Media File)
• Newsweek audio clips here and here.
  
• iMedia video interview currently on their homepage
  

He also has a fun spoof of the TV upfront here.

RSS isn't the web anymore than the web is print

I hadn't really thought of it this way until Fred Wilson made his point. Just as the monetization vehicles (ad types, metrics, proof of efficacy, etc.) for the Web were limited 10 years ago when the commercial Web was in its early days, RSS is in the same boat. I'm not aware of any huge successes directly monetizing RSS but I'm certain that many entrepreneurs are feverishly trying to figure that out.

The right fit with your investors

Scott Maxwell has a good set of criteria to judge the fit with a prospective VC. Worth a read if you are on the cusp of taking outside money.

BigCo fishing expeditions

Since most exits are acquisitions, not IPOs, one has to seriously consider overtures from BigCos. That said, some companies use fishing expeditions to learn more about your business with no serious intention of ever making a legitimate offer. Ed Sim lays out a set of questions you should ask BigCo as well as ask yourself that is a useful list. Having been on the BigCo side of this equation, I can tell you that the fishing expedition often isn't intentional. One set of people inside BigCo might be completely serious about their overtures but get blocked by some other person/team in BigCo. This is more likely to happen at BigCo if they don't have a structured process for acquisitions. Thus, one additional question I'd ask BigCo is "how does BigCo's acquisition process ensure that there is internal buy-in before getting into deep discussions with SmallCo?"

2010 Google Predictions for Marketing industry

In this article, I had some fun with playing out the natural progression of the convergence of Internet-based ad technologies with TV advertising. I was also purposely provocative about what Google's drive for growth will mean for the ad agency business. Agency execs ignore this potential at their peril. A few agencies I know already get this while others are fighting yesterday's battles. Joseph Jaffe has an ongoing theme in his blog "Fixing the Ad Agency Mess" that addresses additional issues challenging agencies.

Update to 2/05 post: Saul Hansell of the NY Times wrote an article over the weekend that is receiving a lot of reaction in the blogosphere. For example, John Battelle (author of Search). Perhaps these predictions will happen sooner than I expected.

tag: google

The 3 Stages of Truth

Many highly successful new ventures had to go against the grain to achieve their success so this quote from Arthur Schopenhauer (German Philosopher) is appropriate for what most entrepreneurs have to deal with.

3 Stages of Truth

First, it is ridiculed

Second, it is violently opposed

Finally, it is accepted as self-evident

Two Stage ventures and the ESLC?

In part due to the lack of funding in the post-bubble days, my partners and I have seen a number of companies take a very lean & mean approach to their development process. They have then engaged a firm like Altus Alliance to take a similarly lean & mean approach to initial go-to-market entry. Tim Oren's has written his take on an approach along these lines that he characterizes as a "Two Stage Venture" where stage one is run extremely lean and stage two is when venture funding may make sense. One of the likely byproducts is a company that gets a better valuation than if they went for more funding earlier in the process.

PR (not ads) drive brand building

Time and again, I've seen early stage businesses waste precious resources on ad campaigns that have little impact. The problem is usually timing and technique. Brand (as opposed to direct response) ads usually have little impact unless they are built on a foundation of previous PR efforts. Well-regarded "ad expert" Al Ries published a book that details this insight in "The Fall of Advertising and the rise of PR" (see book summary below). There are nearly an infinite number of ad techniques. One example of direct response advertising is Search Marketing. While it's well-documented the success that Google and Overture are having, it's less known how many small technology firms have effectively used Search Marketing. Search marketing best practices and insights can be culled from sites such as iMedia's -- http://www.imediaconnection.com/search/index.asp. So much has been written about Search Marketing that I won't belabor it in this post.

Let me give you a brief example of PR -- I know of a firm that develops an object-oriented open source database that is building its early success on PR. Among other techniques, they have hired an influential blogger in that space who has relationships with many in the open source world. His credibility and access is establishing the firm as a player with this pure "PR" approach.

I've pulled some excerpts from the website "The Fall of Advertising and the rise of PR" linked to above.

"It's the end of the era of advertising domination. Today, great brands are built with PR.

Using in-depth case histories of successful PR campaigns coupled with those of unsuccessful advertising campaigns, The Fall of Advertising provides valuable ideas for marketers—all the while demonstrating why:

• Advertising lacks credibility, the crucial ingredient in brand building, and how only PR can supply that credibility;
• The big bang approach advocated by advertising people should be abandoned in favor of a slow build-up by PR;
• Advertising should only be used to maintain brands once they have been established through publicity.
  

In the high-technology field, Oracle, Cisco and SAP became multi-billion dollar companies (and multi-billion dollar brands) with almost no advertising.

We’re beginning to see research that supports the superiority of PR over advertising to launch a brand. A new study of 91 new product launches shows highly successful products are more likely to use PR-related activities than less successful ones.

Commissioned by Schneider & Associates in collaboration with Boston University’s Communications Research Center and Susan Fournier, an associate professor of marketing at Harvard Business School, the study is believed to be the first of its kind. We learned that the role of PR, while underutilized, was extremely significant when leveraged,” said the study."

Being a contrarian can pay off

Fred Wilson has another good VC Cliche of the Week -- The Lady Doth Protest Too Much. His post highlights the value of a contrarian view in products that may upset someone else's apple cart. It's well accepted conventional wisdom amongst entrepreneurs and investors that having a contrarian often is the path to big returns but it can be hard when people you trust/respect have an opposite view.

Microsoft feeling your pain

The Microsoft UK team put together a creative video on how they are striving to feel their customers' pain (video). When I say pain, I do mean pain. Pretty humorous...

On a more serious note, if you are a Microsoft watcher, keep an eye on Microsoft UK. My feeling was that they had the same smarts, work ethic and critical mass as the U.S. subsidiary/Redmond HQ but were relatively unfettered to do some innovative things that were increasingly getting bogged down by corporate bureaucracy in Redmond. Consequently, their successes often rolled back into Redmond often via UK team members moving to Redmond.

Uncle Bill’s Words of Wisdom

My Uncle Bill is one of the funnier people I know. He also happened to be a very successful Consumer Products executive usually playing the "new products" role. Upon his retirement, he shared a few of his words of wisdom...

1. Honesty is not only the best policy; it is rare enough today to make you pleasantly conspicuous.
2. The expedient thing and the right thing are seldom the same thing.
3. The best way to get credit is to try to give it away.
4. You cannot sink someone else’s end of the boat and still keep your own afloat.
5. If you get a kick out of your job, others will get a kick out of working with you.
6. It is not important that you come in early and work late. The important thing is WHY?
7. No one should knock research that has ever been helped by a road map.
8. Chicken Little acted before her research was complete. The competition ate her up.
9. A New Products person who can’t take a lot of punches had better win in the first round.
10. A man/woman of stature has no need of status.
11. Never trust a person who is Dr. Jekyll to those above him and Mr./Ms. Hyde to those under him.
12. You learn more from your defeats than from your victories.
13. Few people are successful unless a lot of other people want them to be.
14. Folks who think they must always speak the truth overlook another good choice...silence!

Hugh Macleod has a somewhat related list of how to be creative but is another list of guidelines to live by. Yet another I picked up off the bottom of a cook table on a rafting trip.