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SVASE VC Breakfast

I am volunteering at SVASE, the Silicon Valley Association of Startup Entrepreneurs, and amongst others I sometimes moderate our VC Breakfast Club sessions. 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.

Tomorrow’s featured VC is Paul Holland, General Partner, Foundation Capital. Information and registration here.  

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

  • Yes, it’s a pressure-free environment, with no Powerpoint presentations, Business Plans…etc,  just casual conversation, but for God’s sake it does not mean come unprepared!
  • Bring an Executive Summary, some VC’s like it, others don’t.
  • 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.
  • Follow a structure, and 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 please be aware that whatever your practice time was, when you are on the spot, you will likely take twice as long to deliver your story.
  • Last, but not least, please be on time!

See you tomorrow … and now I get to show off my cool new Zvents button: Zbutton

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Sponsoring the Web 2.1 BrainJam

SQLFusion is now a proud co-patron of the Web 2.1 BrainJam along with Kron 4, D-BAM,  and  TechCrunch

A BrainJam is a new type of event (inspired by BarCamp, Gnomedex, TechCrunch BBQ and WebZine2005) that brings people from diverse backgrounds together to focus on a few key questions, sharing knowledge, collaborating, solving problems, demonstrating cool tools, networking and hopefully making the world a better place while having fun. You only need to bring your mind, your past experience, some new Insytes and something for note taking. The event coordinators supply you with a general direction for the conversation, WiFi access, some collaboration tools and an opportunity to create magic.

It will take place this Friday, October 7th, and registration is open now at a hefty $2.80.   That is not $2.80 per minute, but the full price 🙂  But should you not be able to afford it, Scholarships are available: all you need to do is write and explain why you are deserve  a scholarship in 1,000 words or less, or under 2 minutes in audio/visual length.   (You have to appreciate the Organizer’s humor…)

Talk about Organizer, he needs help, please check out the Wiki.

See You there!
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The LoN(in)g Tail of Software

As always when something significant happens, my RSS reader is choke full of writeups on  Ning , the uncloaked version of Marc Andreessen’s 24 Hour Laundry.  (not to be confused with the French Laundry)

I don’t know how to say it without actually saying it, so I might as well blurt it out: this is The LoN(in)g Tail of Software, using Joe Kraus’s classic definition – just like JotSpot.

references:  John Batelle,  BlogSpotting, Om MalikJeff Clavier, TechCrunch, Corante and the rest of the world

Update (9/5): Chris Anderson, the “Father of the Long Tail” writes about Ning: The Long Tail of social software.

Update (9/6)ZDNet joins me in drawing the parallel to JotSpot.

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Should a Startup Have a COO?

As a Founder, you may find hiring a COO helpful, but think twice if you seek VC funding.

Steve Shu ponders on an older article in Entrepreneur.com on the subject.

The author describes situations where the COO is taking on operational functions, ranging from HR, Finance, vendor relationships, order fulfillment, Product Management, QA ..etc, but almost never Sales, Marketing or external PR – these being CEO responsibilities.

Steve’s experience is somewhat different, having performed COO roles with a heavy Sales / Business Development, Account Management slant. I myself served as President at a startup with major focus on Sales, and as VP Sales in a smaller company where I ended up doing a lot of corporate development, which the President didn’t do.

It all boils down to what makes sense based on the individual skill-sets in any specific company… except when you need VC funding. The big difference is that while you, as Founder/CEO are trying to find the best solution for YOUR company, C’s mission is not how to help YOU, but to find the best investment opportunity. There is a process of elimination to get there, and having the right team & roles is a major criteria in that process.

Almost no early-stage startup seeking VC funding should ever have one founder as the “CEO” and another as “President” or “Chief Operating Officer”. This is almost always a sign of title inflation (usually to assuage someone’s ego). Almost guaranteed, any startup that has both a CEO and a President/COO has the wrong person in one or the other (or both) of those roles. This sort of title inflation and proliferation is almost always – like most other “contortions” of the standard org chart – a red flag to VC’s. Can easily be taken to indicate that some of the co-founders are more worried about titles (and ego’s) than success.”

The quote is from Mayfield’s Allen Morgan, whose 10 Commandments, in fact his entire blog should be on the Must-Read list of any Entrepreneur seeking venture funding. I would add to Allen’s reasoning that other than title inflation, there may be REAL business reasons for a Founder to bring in a COO, and I am by far not advocating that startup Founders should not make the right business decision to “look better” in front of VC’s. But a potential problem in the Management Team is a red flag for VC’s, and as long as their pipe is full, they have no reason to invest in less-than-ideal companies. Then again, some startups may be better off without VC funding at all.

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Browser Market Getting “Crowded” Again

Just kidding… it’s great to have 4 choices, instead of just IE & FireFox.

After their Birthday Giveaway, Opera finally went free.  (hat tip: Espen)

Flock, the social browser is still in Beta, but it’s signup list grew to 15,000 overnight (hat tip: TechCrunch)

 

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Shaking the Money Tree™ (PWC & SVASE)

SVASE and PWC present the SVASE Main Event for Q3, 2005:
Shaking the Money Tree™
Venture Capital Trends: The Second Definitive Mid Year Update

  • Networking, Dinner
  • MoneyTree capital investment report and a panel discussion
  • Venture Financing Outlook

Click here for details and registration.  See you there on Thursday!

 

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Pre-AJAX AJAX Applications

OK, so this title does not make a lot of sense … I’ll explain:
There’s a lot of hype around AJAX ( Asynchronous JavaScript and XML), which, in laymen’s terms is a set of technologies that allow web applications to have the look’n feel (and speed!) of desktop applications.

Traditional “web behavior” has been one of the main reasons for user reluctance against hosted Enterprise Applications, and innovative companies have come up with AJAX-style solutions for quite a while. Norway-based 24SevenOffice, a provider of hosted, modular All-In-One applications (ERP, CRM, email, calendar ..etc) has had an AJAX-like UI for a year and a half or so. Of course the term AJAX did not exist, so they had to explain at length the benefits of a faster, friendlier, easier-to-use Web Application.

It took a brand like Google, and the gliding-sliding oh-so-beautiful and fast Google Maps for AJAX to become a “household” name and one of the hot IT trends this year. Now longer do we need the long explanation, AJAX is chic du jour, all new web apps have it, and the major hosted Enterprise App’s also go the AJAX way: see NetSuite’s announcement. They claim to be first major business application with broad support of AJAX, but as stated above, they are a little late to the party… Late or not, it’s nice to see mainstream adoption and friendlier Web-apps finally.

For more technical info, as well as a good compilation of reference material, check out Rasmus’ 30 second tutorial. (via Jeff Nolan).

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The Emperor’s Naked: Technorati

(Updates at the bottom)

Technorati is dressing up a dying sick body in fancy new clothes.  Who cares, if the body fails it’s basic functions?   

The latest new feature, Blog Finder meets more criticism than welcome:  here, herehere, here, to list just a few, but it’s all so irrelevant. Let’s face it: it really does not matter, whether this latest feature works or not.  There’s an old IT axiom:  Garbage In, Garbage Out.  If you have the wrong data to begin with, it really does not matter how many layers of extra services you put on it, the output is still worthless.

Everybody seems to be talking about performance problems; for example here, here, here, here, here and  here, but IMHO not getting data out of Technorati is by far not the worst; getting the WRONG information is far, far worse.  Techorati has major problems parsing the main pages of blogs built on standard templates of major bog platforms, and the result is the result is entries in their metadata where:

  • the body of a post appears with the title of another one (mostly, but not always, the previous one)
  • the body of a post is associated with tags of another one.

I myself, and other bloggers documented this before: here, here, here  and here again just giving a sample, and here’s a  little gem of a title and article that have nothing to do with each other:

Technorati

 (actually, the above image is a “triple whammy”: the tag, title, body come from 3 different posts)
 
I always wondered that if parsing the main page is so difficult (it is not, actually) why doesn’t Technorati use the permalink page, or even better, the RSS feed instead of the main page where they “get lost” – perhaps THAT is a performance issue?
 
In any case, as seen above, the search problems are the tip of the iceberg, the real problem is building the wrong index.  From a blogger’s point of view, this makes us look like complete fools – posting meaningless articles.

Now, let’s talk about communication:  emailing techorati support is a complete dead end.  Bloggers quickly learned the trick: emailing Dave Sifry (CEO), or perhaps Kevin Marks, or tagging blog entries with their names used to result in a response, and sometimes even corrective action.  That’s no longer the case.  I understand.  The CEO personally emailing back is not exactly scalable communication.  But why doesn’t Technorati have a searchable Knowledge Base, or at least a FAQ of known issues and solutions?  This is really Customer Service 101.

The SiliconBeat, Joi Ito, and many others welcome Dave Sifry’s post discussing the problems: “ Once we got our keyword search infrastructure back on track, our infrastructure team has been working 100% on fixing Cosmos search. Our current plan is to have Cosmos search back up and running by the end of September .“

Sorry, Dave, but your keyword search is far from fixed, it still results in timeout in more than half the cases.. in fact the Technorati homepage is often unaccessible.   On this chart  a response time above 3 seconds is considered critical – wow, I am generally happy getting anything below 30 seconds, if at all.   On the input side, Technorati claims to index posts within minutes, yet several influential bloggers complain they have not been indexed for weeks.   Dave strikes an honest tone and discusses some of the issues, but frankly, I doubt he really knows the status of his own business.

All this makes me wonder if Technorati is an “idea company” – they truly are Innovators of the Blogosphere, just can’t execute.  This makes me wish BL Ochman’s recent “hot tip” about an imminent buyout were true. 

 Update (9/10) This is pathetic:  New Orleans is listed as #6 on the Tehcnorati Top Search list, yet clicking on it results in this:

Technorati new orleans

Update (9/11) Can’t log in to Technorati account, infinite loop asking to log in again and again …


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“Resistance is Futile” – GBorg

Updates at bottom.

This must be Google-day:

First, details of Google Purge via John Batelle:

Google Announces Plan To Destroy All Information It Can’t Index

 

“A year ago, Google offered to scan every book on the planet for its Google Print project. Now, they are promising to burn the rest,” John Battelle wrote in his widely read “Searchblog.” “Thanks to Google Purge, you’ll never have to worry that your search has missed some obscure book, because that book will no longer exist. And the same goes for movies, art, and music.”
“Book burning is just the beginning,” said Google co-founder Larry Page.   As a part of Phase One operations, Google executives will permanently erase the hard drive of any computer that is not already indexed by the Google Desktop Search.

 The company’s new directive may explain its recent acquisition of Celera Genomics, the company that mapped the human genome, and its buildup of a vast army of laser-equipped robots.   Google’s robot army is rumored to include some 4 million cybernetic search-and-destroy units, each capable of capturing and scanning up to 100 humans per day. Said co-founder Sergey Brin: “The scanning will be relatively painless. Hey, it’s Google. It’ll be fun to be scanned by a Googlebot. But in the event people resist, the robots are programmed to liquify the brain.”

OK, so it’s humor .. after all it is from The Onion

But when you’re done watching Epic 2015, via Jeff Nolan,  are you still laughing?

 

P.S.  Does this mean Microsoft is now officially Off the Hook?

Update (9/1)  Russel Glass  chimes in:  there is actually some truth to the  Onion’s piece.

Update 2 (9/3) So, before long — the operating system, the artificial heart, and monthly blackmail cheques made payable to ‘The company that can do no evil”.

Update 3 (9/8)   “do no evil” – really?   You be the judge.  (via Chris Selland)

Update 4 (11/17)  Russel Glass shows Epic 2014. Hey, I beat you by a year, we’re in 2015:-)

Update 5 (03/06):  “We have all the ingredients for a great story: dramatic predictions of

Google taking over the world, secret disclosures of a new stealth

product at a Google analyst meeting, outing of the story by bloggers,

and subsequent purging of the public data by Google to keep things

hidden from the public and competitors.”  read on at TechCrunch.

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Not-So-Open-Source Applications

(Updates at bottom)

“Enterprise software vendors who leverage open source, subscriptions and grid computing to meet customer needs will emerge as next-generation industry leaders. “ – says John Loiacono, EVP, Sun Microsystems.

Jeff Nolan recommends caution: “… open source and subscription licensing, two completely separate trends that often get lumped together, are not silver bullets for emerging companies.” His post is well worth reading, and I agree with most of his logic, which refers to the traditional Open Source “business model”, if there is such a thing (we’ll come back to this later):

  • Open Code
  • Broad Support Community
  • Paid Sales & Marketing staff
  • Paid core Engineering
  • Product Available free
  • Revenue from support / training / consulting… i.e. services

He then rightly concludes that this model is basically a service business, so investors should beware, when we peel the hype layer away, they don’t find the hypergrowth software business there.

Yes … but … this may just have been the “beta version” of an Open Source business model – if we can even say that. In fact we really shouldn’t: Open Source is not a business model, it’s a software production model (and philosophy), says Marten Mickos, CEO of MySQL (via Jeff Clavier). Absolutely.

The two examples Jeff uses, SugarCRM and Compiere could not be further away from each other – not only in terms of their product offering, but mostly their business model.

Compiere, for all I know is closer to that “beta model” of “trying-to-make-a-buck” on Open Source, or, if I may say, the idealistic, altruistic (?) Open Source company that makes ALL it’s products ( full ERP & CRM for the SMB sector) available for free, source code included. They even let Consulting/ Implementation Partners rebrand the product under their own name. They are the “nice guys” barely making a buck on support. (Sorry, Jorg, if I am mistaken.)

SugarCRM, on the other hand is not even a purely Open Source company, it’s a hybrid. (Hey, hybrids are popular nowadays ). “ It didn’t take me long to realize that there is a HUGE part missing in the open source version “ says Simon Romanski, director of information systems at Fulfillment America, quoted by ZDNet. The title says a lot: Commercial open source, a misnomer? Well, not a misnomer, but definitely commercial software: SugarCRM sells the Pro and Enterprise versions of their product, and also charges for the On-Demand version. Even the Open Source version can be “upgraded” by paying for extensions, e.g. the $39.99/user Outlook Plugin. Hm, I would not put my Sales Organization, no matter how small, on a CRM system without Contact synchronization. By the time we configure the basic needs of a small Sales Team, chances are pricing is on par with a truly commercial software company, e.g. 24SevenOffice .
So is SugarCRM using Open Source as a marketing gimmick, riding the fashion wave? I don’t think so. Nor do I think there is anything wrong with the business model… perhaps a little heavy on the hype, like the other guy selling software using the “No Software” slogan. SugarCRM is a successful hybrid that’s partly Open Source (development, support community, viral marketing) yet generates it’s revenue from selling software like any other company.

Only to prove Marten right.

Update (9/01): ZDNet’s SaaS blog has a good follow-on article on SugarCRM: Outwitted by its own ecosystem

Update 2 (9/01) The “Commercial Open Source” story reverberates; ZDNet’s Dan Farber follows on quoting Marc Fleury, CEO of JBOSS.

Update 3 (9/28): The Next Little Thing Isn’t Free by Sam Ramji

Update 4 (11/16) But is it really free? CIO Magazine

Hybrid Open Source Business Models by Zack Urlocker