As a soccer fan, I just wish the New England Revolution were as good as the Sox and the Pats…
I spent the last few days in Deer Valley, UT at the annual Polaris Venture Partners Digital Media Summit or PVPDMS08 as we casually refer to it (right). It’s a great event where the CEOs of our digital media companies mix with industry heavies, both successful startup entrepreneur types and the folks with multi-billion dollar budgets. A few days of focused round table discussions, good food and fun physical activities are the best way to build relationships. It’s one of the many ways the Polaris network helps our entrepreneurs.
The weather this year was both great and marginal. Deer Valley got about 55-60” of snow in four days. The powder made the skiers happy. Those of us who don’t do the downhill thing went snowmobiling. We had a good time although snowfall killed the visibility as you can see on the pic. On the flip side, getting to dinners with the road closings was a challenge and today a few attendees narrowly escaped an avalanche at Deer Valley Resort.
We covered many important topics: from how to build organizations in digital media startups and scale infrastructure, to new content & advertising models, to monetization of UGC and other forms of social media, etc. Many of the comments were insightful due to the diversity of backgrounds and perspectives around the table. I have a few good follow-on topics for blogging that I hope to organize and post in the next few weeks.
On Friday the group was abuzz following the news of the Microsoft offer to buy Yahoo. Several of the attendees had stayed up overnight and were prepping for board calls and press interviews. Microsoft does best when someone is breathing down its neck. I hope the same is true for Google.
In a startup environment favoring fast, relatively cheap exits instead of building sizeable companies, it is always interesting to look at the choices startup founders and CEOs make when they have the option to sell the company or build it forward. It is a bit of a Rorschach test–telling much more about the individuals than about the situation.
As the entrepreneurs who I’ve talked to on the subject will attest, I’m hardly a person who’d talk against a business model that generates, say, $5-10M of value/year. If you keep your team small, manage your burn and take small investments (if any), selling a company for $15M after three years is not a bad deal if you and a co-founder have 30+% of equity in the business. Then, you can do it again. It’s fun. You have control of your destiny inside the company. You get to work with your friends. It’s good money if you set your aim right. I have friends who are on their third startup using this model and loving it. I have advised many founders to bootstrap and go with this model as opposed to seek VC or sometimes even angel funding.
At the same time, founders sometimes wish their good ideas had more impact, that their innovation touched and delighted more customers. They also acknowledge that being small means you often have little to no influence over the market you are in. You have little leverage. You go where the current takes you. You sink or swim based on your tenacity and agility.
Balancing control/ownership/agility with growth/leverage/impact is one of the hardest tasks of an entrepreneur. There may be a right or wrong answer for a company but there is no right or wrong answer for a person. We should not judge those who decide to stay small, even though they may have a big opportunity in front of them. Personally, I wish them the best of luck and hope that they will be successful and will want to build a bigger company the next time around. On the flip side, it is important to recognize that choosing the longer, harder path in an environment where quick exits are possible is a gutsy move worth raising a glass to.
My dear friend Brian Shin, founder/CEO of Visible Measures recently had to make this choice. I’ve known Brian for more than a decade. We worked together at Allaire and I’ve been an advisor to several of his companies. Visible Measures is an online video analytics company, the only one of its kind. VMC was doing well and, according to the rumor mill, it had suitors willing to pay a price that would have put many millions in Brian’s bank account. Since this is Brian’s third startup, it would have been easy for him to take the deal and go work on his fourth one. Instead, he chose to build a big company. This was a smart move because VMC’s business model enables network effects (how many different Nielsen-type services does one need for video?). Yesterday, at DEMO the company announced the release of its next-generation platform, the acquisition of Vidmeter and a sizeable financing. So, cheers, my friend, and best of luck as you build out this business.
Tangent: Coming full circle to the subject of Rorschach tests, my wife found a fantastic book called My Last Supper. Famous chefs are interviewed about what meal they would like to have before they die. This is the ultimate psychology test for a chef.
I’m starting to believe that developers of very small applications (widgets, applets, plug-ins, etc.) are not taking software quality seriously. The fact that their own codebase is small doesn’t mean that they have fewer defects per line of code. Further, often their “mini-apps” live inside large, complex software products with complex interaction behaviors. The simple apps may not get exercised simply at all.
The quality of mini-apps is becoming a big problem because there are simply so many of them. The categories I have in mind specifically are:
For example, recently I’ve come to the opinion that Outlook add-ins are uniformly buggy. It used to be that Plaxo and LinkedIn would routinely fight over objects and crash Outlook. My solution was to put them on a separate Outlook instance running inside a virtual machine. I use them when I need to but I don’t let them run all the time. My email processing performance improved noticeably. The virtual machine trick is something I do a lot for non-essential apps and especially mini-apps. For example, I blog using Windows Live Writer, both because it is built by friends and because it is the best blogging editor out there. However, it only comes with the IE toolbar whose many extensions are not the most robust out there.
Recently, I had a problem with Kaspersky’s anti-virus mail add-in and Nobex Contacts kept causing access violations on shutdown. Yesterday, I discovered that the source of a rather peculiar email behavior was a bug in the Getting Things Done add-in I was using to help me adopt Inbox Zero. I’ve since removed it from my system.
Why can’t folks write better Outlook add-ins? I’m curious to try Xobni but not if they haven’t invested seriously in QA.
Sun buying MySQL is truly a mixed blessing. Sun has the resources to invest to make MySQL a “real” database and knows a lot about what enterprises would want to see in it. On the other hand, Sun has had a less-than-stellar track record with software. Once upon a time, back when I was at Allaire, we celebrated every time Sun bought a competitor. Hopefully, Jonathan Schwartz, who is a software guy at heart, has pushed enough change through the organization to make the acquisition successful. Alternatively, this may be his way of bringing a critical mass of fresh perspective to Sun.
One of the key areas Sun should focus on is DBA outreach. There is a scarcity of DBAs who have solid operational experience with mission-critical MySQL deployments.
More importantly for me, this is a signal there there are startup businesses to be built around open-source DB infrastructure.
After some research following the comments I received about email management, I decided to implement Inbox Zero, which is based on David Allen‘s Getting Things Done.
The first step was to start with success. I created a folder called old_mail and moved my entire inbox there. Now my inbox was empty and I was ready for Inbox Zero. I blocked time in my calendar to go through old unread messages.
The second step was to reduce the flow to my inbox. I created a ~holding folder and added rules that moved lower priority mail from mailing lists, etc. there. I already had some rules but now I ratcheted up their selectivity. I also decided that when I see non-solicited email I will immediately unsubscribe (which is not easy since I have multiple email addresses) and, just in case, mark it as junk.
The third step was to get some help efficiently implementing GTD so I downloaded the evaluation copy of the GTD Outlook add-in. The main benefit of the add-in is that it extends Outlook tasks with projects and contexts (@Call, @Computer, @Home, etc.). It can also manage delegation with reminders and a few other things. My biggest annoyance is the UI, which leaves much to be desired in terms of productivity, especially in the case of picking a calendar spot to defer a task to. Also, filing items in folders is rather slow.
So far so good. Inbox Zero is definitely better than what I was using before but I wish I had better software tools inside Outlook for it.
Does Google already have too much power online? Or it is that investors perceive this to the the case? Personally, I doubt that markets would have reacted as violently if GOOG wasn’t involved.
Motley Fool makes a daring suggestion:
If Microsoft or Yahoo want a shot at Google AdSense – a market that is nearly as big as all of Yahoo! and twice the size of MSN’s top-line output – they will need to put the dagger between their teeth and treat an ad network as a loss leader. Even if it means offering 100 percent – or even more – for a limited time, AdSense will only get bigger without opposition.
I found Afrigadget through a short write-up in Fortune. The site can be an inspiration for many, but especially the garage-type entrepreneurs who haven’t made money before. It’s about engineers, entrepreneurs and inventors in Africa who create cool & useful things using uncool and in many cases scrap parts, as in the case of the homemade helicopter below whose heart is a Honda Civic engine.
Warning: when I browse to Afrigadget, Symantec Anti-Virus reports that the site tries to download malware called Downloader. It is successfully blocked/deleted. This could be a false positive or someone could have indeed hacked the site and positioned some malware there. Comments from security gurus and people using other anti-virus tools are welcome.
Xconomy did a good write up on Veracode. Matt’s point below is spot on: the only way to address the application security problem is (a) through technology as opposed to people and (b) through easy-to-adopt SaaS solutions as opposed to on-site software that requires cultural change.
With 60 employees to go with its $20 million, Veracode has “nice momentum going into 2008,” [CEO Matt] Moynahan says. “A company could hire a consultant to manually review their code, but we are a faster path to the same destination, especially if they have some application they don’t want to send off-site,” he says. The company even makes suggestions about how to fix code with proven vulnerabilities. Says Moynahan, “We’re trying to bring security to the masses.”
A while back I wrote a post called Millions of Consumers, Millions of Channels about the upcoming shift to social advertising and social commerce. My simple observation is that we are moving to a world where every one of us can easily become a distribution channel. The shift from thousands of distribution channels to millions of distribution channels is something brands are going to need a lot of help with.
Over the holidays, one of the comments to the post struck me as needing to be raised to the top level. It comes from Vladimir Dimitroff, a London-based friend of mine with a long career in figuring out how to best develop customer and stakeholder relationships. Below is the full text of his comment.
Great post! In a drill-down, you can add to your thinking the multiple dimensions of consumer participation (isn’t it time we stop calling them consumers?
– Consumer as communication channel: viral in its purest form just carries over a many to many channel an essentially one to many message from a business to its audience.
– Consumer as message author: recommendations and referrals are where the ‘consumer’ is already an ‘employee’ of the business, effectively working for the Marketing department and generating the message in addition to carrying it.
– Consumer as a transaction participant: where the business has found a mechanism to engage the consumer in more than just passing a message, in ‘closing the sale’ (one more hat for our poor ’sumer – now he also works in the Sales department), processes orders and (why not) takes PayPal payments.
– Consumer as co-creator of the product: from participation in product design R&D with feedback, ideas and recommendations, to UGC, particularly where the ‘product’ is the message he spreads. Two more jobs: in the R&D and in the Production department of our business.
– Finally, consumer as Investor: already an insider of our business, he confidently buys our stock (and recommends that, too). Clever companies find ways to engage them even better in the share ownership through dedicated schemes. (I think I coined the ‘investomer‘ word back in ‘98-99, but can’t be sure, I see evidence of usage at about the same time elsewhere).
This convergence of stakeholder roles is perhaps the most significant aspect of the ‘2.0′ phenomenon and the radically new business and economy thinking. Companies whose visionary management are able to view the world in this way will become leaders in their field and set examples for the entire global economy.
Needless to say, the most interesting ‘things’ to watch in the startup and venture space are business models that harness one or more (the more the merrier) of the above modes and roles.
