Company politics bog down Market Velocity attainment

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

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

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

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??

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

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

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)

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

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

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

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

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.

1. 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.

2. 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.

3. 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.

4. 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?

5. 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.

6. 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.

7. 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.

8. 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.

9. 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?

10. 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

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

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

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

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

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

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

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.

1. Market – Is the market opportunity the company is pursuing big enough to support several companies?
2. 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?
3. Model – Does the company have a compelling business model to capitalize on the opportunity?
4. Moat – Is the company’s strategy defensible as any interesting market opportunity is going to see many competitors?
5. 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.
6. 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?

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.

1. The Internet ad market is much more developed so there are better ways to monetize this sort of feature.
2. 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).
3. 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