Archives for 2006

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Growing Faster than TechCrunch – Thank You, Netvibes

Posted on June 1, 2006 ·

Don’t worry, dear reader, TechCrunch is still doing OK – their Feedburner subscription base grew almost 100% overnight.  But it pales in comparison to my 2.5million % growth rate … yes, I went from 200 or so to 51k.   Jeff Clavier did quite well, too, at 56k, but hey Jeff, I am catching up!

OK, now that I had my coffee and am awake (?),  let’s look at what really happened. 

The culprit is clearly Netvibes – or to be precise, I don’t know if the error is on the Netvibes or Feedburner side, but clearly the Netvibes numbers are solely responsible for the inflated stats.  The “fluff factor” is not a multiplier, they simply appear to have added a base of 50K or so to all statistics.

Hm… perhaps it’s not a glitch, it’s a “feature”, since NetVibes just installed an upgrade.  Hey Netvibes (or Feedburner?), I hope I get a “finder’s fee” for pointing this out: when you fix this, could you please leave my base at… say at a tiny 10K bonus level… I promise I won’t tell.

Related posts:

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Filed Under: Blogging, Humor ·
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SaaS for Very Small Businesses – Show Me the Money

Posted on May 31, 2006 ·

Recently, in  SME / SMB Have Become Obsolete Acronyms I discussed how now, that business software and services have become affordably available to small businesses, the SMB term has become inadequate to describe this market, especially from the software industry’s point of view.  Simply because the needs of a $100M company, which SAP and Oracle consider a “small” business are not even comparable to a 6-10 person company – traditionally referred to as SOHO, while recently a new term is popping up: VSB – very small business, the absolute “S” part of SMB.

Innovators in the software business are increasingly focusing on this segment. The result of this change is that “Enterprise Software” is no longer the luxury of large corporations. This might sound like a shocking statement, since “Enterprise Software” typically means the world of SAP and Oracle, and the traditional heavyweight, expensive, pay-huge-license-fees-upfront, then try-to-implement-forever model that does not work anymore.

But there is another definition that is largely being overlooked: 
Software that allows a company to conduct it’s everyday business, supporting most of the core, fairly standard business processes any company performs repeatedly. 

With this definition, Enterprise Software has a whole new, largely unpenetrated market to enter: that of small businesses.   Such business functionality has traditionally been beyond reach for a typical small business, for two major reasons:

  • Cost (license, hardware, implementation, maintenance ..etc)
  • Lack of IT resources (integrating applications, designing processes, dealing with multiple vendors ..etc)

SaaS  is the right answer for both, since it allows the SMB user to start using the functionality without an upfront investment, does not require implementation, upgrades, maintenance, worrying about backups and security ..etc.  

Of course several Open Source packages are available completely free, which is a perfect solution for the cost problem, but frankly most of these packages are by geeks for geeks; i.e. you really have to be quite IT-savy to implement, integrate, upgrade them, and as we stated most small businesses simply do not have that type of resource. 

Stefan Topfer, Winweb‘s Founder and CEO started an excellent mini-series on Saas Benefits  detailing a lot of technical, delivery, usage aspects – now I am going to look at the changed economics from the other side, the software vendors’ point of view.

If SMB’s could not in the past afford Enterprise Software, the same held true for the Software Industry: they could not afford SMB’s, since there was just no way to profitable reach millions of small businesses.   The cost of customer acquisition vs. the very low license fees made it an uneconomical model, whether via direct or channel sales. A common “dirty secret” of the industry is that about 80% of a an enterprise software company’s cost is Sales and Marketing.  There’s a lot of “fat” in that sales process that needs to be cut out.

Once again, technology comes to the rescue: the Internet, and largely Search Engine Marketing changes everything.  Joe Kraus, Founder of JotSpot and previously Excite sums it up:
“ Ten years ago to reach the market, we had to do expensive distribution deals. We advertised on television and radio and print. We spent a crap-load of money. There’s an old adage in television advertising “I know half my money is wasted. Trouble is, I don’t know what half”.  That was us.  It’s an obvious statement to say that search engine marketing changes everything. But the real revolution is the ability to affordably reach small markets. You can know what works and what doesn’t. And, search not only allows niche marketing, it’s global popularity allows mass marketing as well (if you can buy enough keywords). “

Another benefit of SEM (search engine marketing)  is that while traditional advertising can pick the right demographic groups, it cannot pick the right time, only a fraction of the target audience is in “change mode”, looking for  a solution.  That’s the beauty of Search Engine Marketing: obviously if you are searching, you have a problem and are looking for a solution, which is half a win from the vendor’s point of view.

Small Business Trends published a survey on “Selling to Small Businesses”, which supports the increasing importance of SEM: “A full 73% of vendors attract small business customers through search engine results”

Joe has another excellent article worth reading; especially the last two bullet-points are relevant to our discussion here.

What we’re seeing is that the SaaS model changes not only the technology and the delivery of software to customers, but the marketing and sales process, too, which is perhaps where most of the excess “fat” can be cut from.  Software companies can now directly and affordably reach millions of small customers. The entire marketing,  sales, delivery, implementation, support, upgrade process is seamless, highly standardized, conducted via the Net, teleconferencing, Webex-like sharing in new low-cost ways.

So how do software companies make money on small businesses?   Ziff Davis  has the answer:  “Products for the long tail and SMB market, where 72 million businesses spend $5k or less each year, are a much easier play”  Wow, I don’t know where those numbers come from, but if I were a SME-focused software vendor, I’d certainly like them … there’s a goldmine out there. 

AMI Partners confirm:  U.S. SMBs to Spend $2.2 Billion on Software in 2006

(This article, with minor changes is cross-posted at The SME Blog, where I am a guest blogger)

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Filed Under: Business, Enterprise Software, SaaS, SMB / SME, Software ·
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SVASE VC Breakfast with Diamondhead Ventures – Almost Sold Out

Posted on May 29, 2006 ·

The next  SVASE  VC Breakfast Club meeting is on Thursday, June 1st in Menlo Park – the VC Mecca, Sand Hill Road.  As usual, it’s an informal round-table where up to 10 entrepreneurs get to deliver a pitch, then answer questions and get critiqued by a VC Partner. We’ve had VC’s from Draper Fisher, Hummer Winblad, Kleiner Perkins, Mayfield, Mohr Davidow, Emergence Capital …etc.

Thursday’s featured VC is Raman Khanna, Founding Managing Director, Diamondhead Ventures. The Zvents post  has all the info and a map, and if you plan to attend,  hurry to register   – at the time I’m writing this there are 3 seats left of the 10 maximum.

These sessions are an incredible opportunity for Entrepreneurs, most of whom would probably have a hard time getting through the door to  VC Partners.   Since I’ve been through quite a few of these sessions, both as Entrepreneur and Moderator, let me share a few thoughts:

  • It’s a pressure-free environment, with no Powerpoint presentations, Business Plans…etc,  just casual conversation, but it does not mean you should come unprepared!
  • Bring an Executive Summary, some VC’s like it, others don’t.
  • Follow a structure, don’t just talk freely about what you would like to do, or even worse, spend all your time describing the problem, without addressing what your solution is.
  • Don’t forget “small things” like the Team, Product, Market..etc.
  • It would not hurt to mention how much you are looking for, and how you would use the funds…
  • Write down and practice your pitch, and prepare to deliver a compelling story in 3 minutes.  You will have about 5, but believe me, whatever your practice time was, when you are on the spot, you will likely take twice as long to deliver your story.  The second half of your time-slot is Q&A with the VC.
  • Last, but not least, please be on time!  I am not kidding… some of you know why I even have to  bring this up.

See you on Thursday! Zbutton

Update (5/30):  Here’s a participating Entrepreneur’s feedback about a previous event.

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Filed Under: Bay Area, Business, Social Networking, Startups ·
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Turning Cow Manure into Horsepower

Posted on May 29, 2006 ·

This is not BS .. rather CS     A University group created the world’s first car powered by cow-manure. 

“Every cow can produce enough manure in a day to make a car go about 15 miles. If you take 20 cows, you get 300 miles of gas in your car.”

The downside: “There are not enough cows in the United States to power every vehicle”  Oh, and there’s no mentioning of the .. hm… frangrance.   (Full article and video at ABC News)

Update (5/31): This is the real “Quick Fix for the Gas Addicts”

Update (6/1): Apparently for some, this car “smells”, so they put their bet – and money on electric cars: Tesla Motors, new electric sportscar company, raises $40M from Google guys, others

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Filed Under: Misc ·
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Hidden Comment Spam

Posted on May 28, 2006 ·

Here’s another innocent-looking comment I received today, to an old post (first suspicious sign!):

Re: M-listers and Down-linkers
by Anonymous on Sun 28 May 2006 02:33 PM PDT  
Cool…Very useful article, thanks!

WTF?  Typically these meaningless, generic comments indicate spam, but in this case the commenter remained anonymous, and there is no link back to any site, so who benefits?

Blogware’s email comment-notification helped: for some reason it messes up html comments, so this is what I received:

Poster’s IP Address: 80.37.131.49
Article URL: https://www.zoliblog.com/blog/_archives/2006/3/1/1791102.html
Author: Anonymous
Title: Re: M-listers and Down-linkers

Body:
Cool…Very useful article, thanks!<div style=”position: absolute; top: -1000px; left: -1000px; visibility: hidden;“> Please don’t delete my comments! Maximum 7 such comments at your blog! More info download register today to earn up to $100 playing poker online…  etc.. then of course linking to the online poker site.

How tricky…

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Filed Under: Blogging ·
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End Cable Monopoly

Posted on May 28, 2006 ·

Are you sick of being squeezed by your cable company?  There’s nothing you can do as long as they have a monopoly.

If you are in California, check here’s where you can take action

.

Filed Under: Bay Area, Business, Politics ·
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Girlfriend 6.0 vs. Wife 1.0 – Sequel to Technical Support: Upgrade Nightmares

Posted on May 26, 2006 ·

This gem from Good Morning Silicon Valley is the sequel to Technical Support: Upgrade Nightmares (hat tip: Mike Cannon-Brookes)

Last year a friend of mine upgraded from GirlFriend 6.0 to Wife 1.0 and found that it’s a memory hog leaving very little system resources available for other applications. He is now noticing that Wife 1.0 is also spawning Child Processes which are further consuming valuable resources. No mention of this particular phenomena was included in the product brochure or the documentation, though other users have informed him that this is to be expected due to the nature of the application.

Filed Under: Humor ·
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Web 2.0 in the Enterprise – Round …n.. (I can’t keep track)

Posted on May 26, 2006 ·

Stowe Boyd picks up where Ben Metcalfe left off in Web 2.0 doesn’t work in the mothership, but… essentially recommending that Web 2.0 is best introduced in the Enterprise “in a satellite operation at arms length from the rest of your operation”

While this is often the easy solution, I think a case can be made for the seamless mashup of process- and workflow-centric enterprise applications and the more creative, unstructured, collaborative tools like wikis.  Case in point is JotSpot’s integration with Salesforce.com based on the Appexhange. Granted their target is not the largest of enterprises, but another example I heard of at SAP’s annual conference is the SAP Help Desk wiki by  Socialtext targeting the entire SAP ecosystem.  In any case, I agree that spontaneous, project-focused use is how wikis will become adopted in the Enterprise, but at the same time I believe they should be a logical extension of any Enterprise system – SAP, Salesforce.com are starting to recognize, and I think the day when we’ll have both top-down (enterprise sale as part of the large package) and bottom-up (departmental initiative) penetration is not that far.

But then Stowe goes one step further, and this is where the trouble starts:

“…the larger question — whether the enterprise would be more agile, more adaptive, and more of a survivor is it could somehow break away from the need for slow-to-change applications that span the needs of many departments, beholden to many but satisfying none — has not really been addressed by Ben or the others I am interviewing on the on ramp to CTC 2006….
My gut says yes. Enterprises would be better off if their IT departments could move to small, low cost, web-based apps that satisfy local needs — a project group, one campus in Denver, the marketing department in Japan — without having to subordinate local needs to corporate controls. The benefits of enterprise standardization are measured in the IT budget, but the true costs are distributed thoughout the enterprise: less collaboration in the research team leads to slower innovation, a less-thatn-intuitive UI for the sale staff in France leads to lowered sale numbers, and a heavyweight finance solution that slows down invoicing costs serious bank in collection time.”

Oh, boy. When we’re talking about large multinational corporations, as Stowe does in his example, the primary benefit of standardization and integration is NOT measured in the IT budget. The key benefit is competitiveness, simply being able to conduct business.  Here’s a case study from my “previous life” when I was implementing SAP systems in exactly these types of companies: The Client, a major test and measurement equipment manufacturer had no real-time visibility of their available-to-promise inventory throughout their own plants accross the US and several countries in Asia and Europe.  It typically took them 3 weeks to be able to promise a delivery date to customers. Needless to stay they started to lose business. After the SAP implementation customers could receive the promised delivery date in real-time. For this company the implementation of the standard system was not an option, or driven by IT savings, it was the only way to stay in business.

As a matter of fact, prior to standardizing on SAP the individual plants operated exactly according to Stowe’s ideal model: each doing whatever they wanted, picking their own systems that simply did not talk to each other.

Web 2.0, collaboration is great, it has it’s place in the Enterprise, but so do those “ugly complex” transactional systems.  Don’t try to run your supply chain on a wiki

Update , more than three years later: Would You Manage CRM with a Wiki?

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Filed Under: Business, Collaboration, Enterprise Software, ERP / CRM, Software · Tagged: , , , , , , , , , , , ,
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Zoho – the “Safer Office”

Posted on May 26, 2006 ·

(Updated)
It’s somewhat ironic that in the very days I’ve just written about Duet, the joint SAP-Microsoft product, I am seriously thinking of escaping from Microsoft-prison, and switching to the most promising WebOffice (Office 2.0) suite. Perhaps I am part of the trend that prompted Vinnie to consider Duet a “nice-to-have” only, but generally too little, too late. (I actually disagree with him, Microsoft’s lock on corporate users is far heavier than on individuals or small businesses.. but that’s another discussion). Update: I’ve had this post half-written for a while, and now we’re getting warned left and right: “use Word in safe mode“, “don’t open Word attachments from Outlook” – the fix from Microsoft is not expected until mid-June. WTF? That’s three weeks away! I am sick of it, just as much as I am sick of Outlook forgetting where the address book is again, freezing on me frequently, and I am especially sick of MS crippling my computer via the automatic Windows updates. While I can’t get rid of Windows (just yet), I can certainly get rid of buggy unsafe Office. Office 2.0, here I come!

But what’s Office 2.0? First of all, terminology: some call it Office 2.0, others Web Office: the point is to have web-based applications that are accessible via a browser, without any download, that will store the data files on the web, too (sorry AjaxWrite, you are out), thus making all my stuff accessible from any computer, any time (as long as I have Internet access).

I’ve been using Writely for a while, so when I first found Zoho Writer, it was a non-event: both editors are equally good, convenience wins, no need to switch. Are any of these Microsoft Word killers? Scoble would laugh it off, they would not stand a feature-by-feature comparison. So what? I am part of the 90% crowd that barely uses 10% of Word’s functionality anyway. Then I found Thumbstack, a web-based “mini-powerpoint”, that allows me to share and collaborate on presentations easily. It does not do a lot of fancy things, amongst them the animated transitions – great, so now I can focus on substance in my presentations, rather than disruptive entertainment. What about a spreadsheet? Zoho Sheet is easy to use, and is aesthetically pleasing – a point so often missed. Is it as poweful as Excel? Of course not. But my Excel knowledge is probably on the level of Lotus 1-2-3 anyway, so for me, Zoho is the Excel-killer. I also have Stikipad, Calcoolate, Box.net … and a few others – all in my Firefox “Office 2.0” bookmark.

The only problem is, when I am not on my own PC, sometimes I forget what’s where… and of course my data files reside with the various service providers, and I am not completely at ease with my digital life being so fragmented. See where I am heading? This move to the Web is liberating, but the plethora of different services causes a bit of chaos. There are two basic concepts to deal with the chaos:

  • Some of the Web storage companies, like Box.net, Omnipage, Openomny ..etc .. offer their open API’s to application providers, or make one-to-one tight integration and propose that we store all our data centrally, no matter which application accesses them. This is definitely a step forward, in terms of data management, but I am still dealing with point applications, without any integration between them..
  • The second concept obviously is one-stop-shopping: is there one service that offers ALL the MS Office capabilities (with the common simplification we just discussed)? The answer is increasingly yes: Zoho is releasing new applications at an impressive speed, and they come with 1G of storage. While I would not have left Writely for the sake of Zoho writer only, the abililty to have everyting under one hood is just too damn tempting. I can have Writer, Sheet, Presenter (due out in the very near feature) all from the same source, my data is stored at the same place, and although currently these applications require individual registrations, in the near future they will be available with a single sign-on.

The Zoho guys also promise integration between these applications, and I have reason to believe they will be able to pull it off – after all, they already have the Zoho Virtual Office, which incorporates several of these offices in an integrated fashion. AdvantNet, a 500-person company (of which about a 100 work on Zoho) runs entirely on Zoho Virtual Office. Currently Virtual Office is a downloadable server-side product accessible via the Web, but Zoho will offer a Web-hosted version in the future. Without integration an Office 2.0 is not really Office 2.0, just a collection of online applications. (For those who may not remember, it took Microsoft long years to achieve some level of integration in their Office; for several years and throughout several releases “integration” was copy/paste, and quite painful as such.)

Zoho leverages a good deal between the different product offerings: some parts of Virtual Office make it into the individual applications, and vice versa, some of the standalone products become part of Virtual Office. For example 1G storage is now an implicit part of using the applications, but Zoho Drive will soon be available as a standalone service, too. Ah, and let’s not forget about Zoho Creator, which is exactly what the name suggests: an easy web-application creator. They even go beyond traditional Office functionality, into the transactional world buy providing Zoho CRM, a web based, or downloadable full-featured CRM system. Fully featured means supporting the full sales-related workflow, including vendors and purchase orders all the way to sales orders and invoicing… definitely more then just a “glorified contact manager” as the other guy is often referred to.

Listening and responding to customers is an area a lot of companies fail nowadays – Zoho seems to excel here, too. As part of research for this post I looked at earlier reviews, and several features reported “missing” from Writer are already included in the current product. There is a direct feedback link from the applications, and the longest response time I experienced was a few hours – sometimes it’s just minutes. In comparison, a question I posted on the Writely forum over two weeks ago is still unanswered – I guess those guys are busy finding their place in Google.

Summing it up: Zoho pumps out new applications at an amazing rate (check the site for a few more I haven’t even mentioned). While one by one most of their applications are comparable to at least another web-based application, I am not aware of any other company offering such a complete suite, with that level of support and the realistic prospect of integrating the applications soon. For me the choice is obvious: Zoho is my Office 2.0 Suite.

I’d like to touch on another issue, namely the value of being first, “original” vs. doing something better the second time – but for the sake of readability I’ll break it out to another post – soon.

Update (5/27): Assaf, who made blog conversations really trackable by bringing us co.mment read my post and gave the Zoho Virtual Office a try. His overall impression is positvie, but he also includes some criticism – just as he should. One thing I learned is that Zoho listens and moves fast. Another obeservation (of mine) is that they seem to move in iterations:

  • The downloadable Zoho Virtual Office has been around for a while (they run a 500-person company on it)
  • Now they are focusing on individual “Office” components making them available on the Web
  • Finally they will relase their own hosted version of Virtual Office probably incorporating may improvements they’ve made in the standalone products.

Update (6/6 -yes, the famous 666!): Google Spreadsheet is out, the blogosphere is abuzz, and I won’t have the time to write today, but at least I wanted to point to Ismael’s article, since he arrives to the same conclusions I did…

Filed Under: Business, Collaboration, Software · Tagged: , , , , , , , , , , , , , , , , , , ,
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Screw the Trademark, Move on to Web 4.0

Posted on May 25, 2006 ·
From Tom Raftery’s IT Views:

“IT@Cork is a not-for-profit networking organisation for IT professionals. IT@Cork organises regular information and networking events which are free for its members.

One of these events – the upcoming Web 2.0 half-day conference is the target of a cease and desist letter (below) from the legal team of O’Reilly publishers. Basically O’Reilly are claiming to have applied for a trademark for the term “Web 2.0″ and therefore IT@Cork can’t use the term for its conference. Apparantly use of the term “Web 2.0″ is a “flagrant violation” of their trademark rights!

Ironically I invited Tim O’Reilly to speak at this conference last February and his response (which I received on 15th of February) was:

“I would love to be able to do it, but my schedule is just too full for an additional international trip.”

So Tim was aware of the event in February but decided to wait until 2 weeks before the conference to set the lawyers on us.

As I mentioned, IT@Cork is a not-for-profit organisation and doesn’t have the resources available to O’Reilly – what do people suggest we do?”

This is absolutely ridicoulous, but I know what to do.

  • First of all, stop talking about Web 2.0, let him stick it up … (hm, pardon my French).
  • Second, skip Web 3.0, too, since that’s the theme of the next O’Reilly conference, (Defining Web 3.0: What’s Next), so he probably trademarked that, too.
  • Third, while at it, boycott O’Reilly’s expensive conference and attend / organize unconferences instead.
  • Fourth, move on to Web 4.0, which I have “prior art” on, so he can’t trademark it. I promise to never make any claims on it and it really doesn’t matter what we call it.

Related posts:

Update (5/29): Isn’t it fun to watch mainstream media pick up on a subject days after bloggers have already forgotten it? Her’s the New York Times, and late or not, they’ve made it to Techmeme.

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Filed Under: Blogging, Business, Collaboration, Software ·
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