The Fork In The Road

Work Globally or Someone Else Will

In 2009, Cisco’s WebEx launched a “Pass the Ball” campaign. The idea was to keep the work moving forward by passing projects along through WebEx. It is a good concept and obviously speaks to WebEx’s core value. However, this stops short of where business is going.

I’ve looked into a borrowed crystal ball and see that competitive technology companies, particularly cloud-based companies, will be embracing a distributed workforce more in the near future. As companies become more global, they must operate in multiple regions and time zones. Some companies see this as the cost of doing business; the smart few know how to leverage this to propel their company forward.

Smart technology companies will not only “Pass the Ball” with projects, but allow ownership of key functions to live outside of headquarters. Many technology companies already feel comfortable outsourcing development of new products and core technology to less expensive, but highly educated, regions of the world. In some cases, a shift has been made from outsourcing to having an official office in one of these locations. Ranging from Bangalore (India) to Yerevan (Armenia), over the last five years, former outsourcing locales have become the home of official company offices.

The key benefit of this is having a consistent person working on development. This enables the person to develop a deeper understanding of the technology as well as loyalty to the company. Ironically, years of bubbles and layoffs has made company loyalty a rarity in the US, but in these newer office locations, company loyalty is more possible to foster.

The next step moves from development to business processes such as finance and marketing. Having accounts payable on a different continent than headquarters should not be a problem, as long as there are work-arounds for emergency exceptions and someone with authority to activate them.

Although it takes more planning to have marketing effectively operate this way, it is possible. I have a great person working with me in Antwerp. He owns specific functions and a few times a week I have a call with him at 5 or 5:30am PST. Yes, I know that is painfully early. However, what I get in return for my missed sleep is a professional who can own many marketing tactics without constant supervision. He also knows when to call me in the middle of the night with a problem. We have an unspoken agreement: him – can figure out most things and me – I know if I’m getting a call at 2am PT it is really important and I don’t blame him for waking me.

Cloud computing companies seem to be leading the way, but other than personal preferences of executive management teams or board members, there is no reason why this should be limited to cloud-based companies. This more efficient approach will need to be embraced by global companies or it will be yet another advantage cloud-based companies will have over their competitors.

What Your PR Firm Isn’t Telling You

I don’t know you or your pr firm, so I should be at a safe enough distance to tell you what they won’t tell you.

1)      They aren’t nearly as excited about your product/solution/offering as you are. Healthy pr firms won’t take clients they don’t believe in, but that doesn’t mean they think your product is the greatest thing ever created. Think of it this way:  if you are a founder, your company is your child. No one will ever love your child as much as you do.

2)      No matter how good their media relationships are, they can’t work miracles. If you don’t have something newsworthy, you can’t expect your pr firm to call in favors to get coverage. If your pr firm really does have great connections with members of the media, they didn’t get it from asking friends to publish information that will hurt their credibility. And, please don't ask each week when will you have your TechCrunch hit.

3)      Degrading your internal staff in front of your pr representative doesn’t make you look important, just pathetic.

4)      Just because you’re told someone in the firm is a social media expert doesn’t mean they are. As the requirements for social media have grown, some agencies have hired or developed staff who truly understand how best to leverage this medium. Others have dubbed a senior member of staff as “the expert.” There are also some traditional pr firms who still believe the answer to the request for social media expertise is to assign one of their staff as the person who pitches bloggers. To know what you’re getting, you’ll need to ask about their results or examples of campaigns.

5)      If you don’t tell your pr firm what is motivating your desire for media coverage, they won’t give you the best results. For example, if you want coverage because you are preparing for a new round of funding, outreach should focus primarily on business media, analyst relations, targeted speaking opportunities and media which potential investors will see. If you are seeking to only ramp sales, positioning should be directed to what your customers’ decision-makers care about and media they will see.

The list could go on, but I won’t give away all their secrets.

Changing Clouds

Over the last few years, several trends have emerged in the broad cloud computing space.

There is now a plethora of aaS companies. SaaS, BIaaS, IaaS, PaaS and OtherThingsaaS I can’t think of. Not to be the forecaster of doom, but all things cloud will not survive. As with every technology cycle, some companies will grow, some will be acquired, and some will fail. Of those that thrive, many will not be the pure cloud-based technology we primarily see now. I say primarily because the transition to a modified technology or business model is already occurring, and more will be on the way in the coming two years.

Some of the changes that have already started include the move from exclusively public clouds to private clouds and hybrid clouds, such as GoGrid’s hybrid infrastructure cloud that combines virtual and physical servers within its public cloud service. Part of the idea behind this is companies can leverage the additional server capacity when it is needed and can scale quickly, thus providing an answer to the question: “how can we plan for dynamic levels of need?”

When the SaaS companies appeared, there were two versions: the one-size-must-fit-all version, which forbids any customization, and the primarily-custom solution companies, which happened to deliver their solution via the cloud. The one-size-must-fit-all version prided itself on never having human interaction as part of their solution. The result is often dirty data or bugs that aren’t found until late in the process. Version two, the primarily-custom solution, is unscalable. These highly-customized solutions are also often much more expensive than what is expected because a significant portion of the features are created for a specific company. This may be how traditional consulting firms such as Deloitte or Accenture operate, but for most this is not a sustainable business model. If these companies do not primarily standardize their solutions, they will hit the ceiling on their growth ramp.

What’s missing in both of these versions is a balanced human element. Even IBM’s Watson is not infallible when it comes to understanding the context of data. This, along with the inevitability of data to age, will require human interactions, at least for the most critical corporate functions.

Along with the changes listed above, an additional cloud computing change is the need to be available cross-platform. We are already seeing this in the web2video and TV anywhere spaces. How long will it take for critical enterprise solutions to follow?

I’m excited to see the developments of the next few years. With so many changes in their infancy, the next two to three years should produce some amazing new developments.

 

Play In Your Zone, or Lose When You Lose Focus

I’ve spent the weekend watching a hockey tournament of seven and eight year olds. What I noticed throughout the games is something every hockey spectator sees: when the players stay in their zone, there is a much better chance of winning. Conversely, when everyone chases the puck (the prize) around, you’re likely to lose.

So what does this have to do with the world of startup companies and business in general? More than you realize.

In 1998, I went to work for a consulting company. My first client was a company providing software that helped online advertisers, portals and producers, depending on which day you spoke with them. Every time they spoke with someone new, they walked out of the meeting with a different product definition and focus. It was so bad that they never launched a website or finished their collateral because they were so concerned if they publicly said what they did, they would lose a sale. As you may have guessed, they never did get many sales. Their saving grace was their timing. By 2000, they had showed their technology to enough people that Excite@Home purchased their technology. A lucky break, but not the growth plans or the financial exit they had dreamed about when they launched the company.

Anyone who has read Al Ries and Jack Trout’s books on marketing and positioning know a pillar of their philosophy is the need to focus. I don’t think the world is as black and white as their teachings imply. If that was the case, The Lego Group would not be making millions of dollars from Lego video games. (Unrelated, if you know the person who came up with that idea, I’d like to shake his/her hand.)

Although I don’t think all of Ries and Trout’s immutable laws totally apply to business-to-business companies, they do in degrees. In today’s technology industry, it is not only a good idea, but necessary for a company to extend its product offerings.

However, this is not a reason or an excuse not to focus. In fact, if you don’t have clear positioning, you won’t be able to effectively modify or incorporate changes. At the same time, a business and product roadmap are essential to ensure your new offering can be sold and positioned along with your current offerings.

When claiming a position in the marketplace, think about your differentiator and real value. Know the difference between a value proposition and a characteristic. Here’s a hint: “easy to use” is never a value; it is a characteristic. No one purchases something because they have always been looking for an easy-to-use interface for their end users. They purchase because they have a need. If you can fill it and it happens to be easy to use so their end users won’t complain about it, all the better.

Here is the ever-so short checklist for focusing:

1)      What is your real value? - how does someone really save or make money through your product/solution?

2)      What makes you different? – not your aesthetics, but what do you deliver that no one else has?

3)      If you want to expand your positioning, does your new offering fit your position in the marketplace? – if not, should you really do this? If you believe the addition is a must, should it be under the same company name?

4)      What are you trying to achieve? – if it is only immediate revenue without how to replicate sales, you may make a goal now, but you’ll lose the overall game

Always remember, you must at least try to shoot to score – in other words, don’t spend too much time trying to create the “perfect set-up” so you never get around to actually starting to market. Like everything, your focus will improve with practice.

Continue the conversation by following Kris Bondi on Twitter @kbondi.

Startup Companies: One CEO or Several? - Part 3

Welcome to the third and final installment of the blog Startup Companies: One CEO or Several?

Today, I finish with what it takes to scale past the $50 million plateau.

The Scaler - Scaling Past Plateau ($50M-350M)

So the company is now growing. You have 150-250 employees including your offshore development center(s). Your revenue is in the range of $25-50 million. How are you going to move your company past this plateau? If it hasn’t already happened, this might be the timeframe for establishing additional revenue streams, which may come from selling into additional industries, creating new product offerings or expanding the company’s geographic presences.

This is another obvious stage to assess the management team. If the CEO is still a founder, this doesn’t mean he/she needs to leave, but they will need to make sure other members of the management team have scaled through this critical timeframe. One challenge in this timeframe isn’t only the growth, but how it happens. If your revenue is at $50 million, but comes from only 10 customers, you may need to think about your total potential market and the likelihood of sustained growth.

This is also the timeframe when many successful CEOs increase their visibility and are positioned as thought leaders. What is your presentation style? Being a thought leader doesn’t mean you need to become king of the conference stage, but you do need to be able to talk about more than your company’s solutions and to perfect your own personal presentation style. All this AND be able to trust the people you hired to run your business.

What Does This All Mean?

As I look through these descriptions, one thing is clear. For each progressive stage of a startups lifecycle, the founders need to let go a little more. First, you need to hire the best professionals you can find. Second, you need to believe you have hired the best professionals you can find. Third, you need to trust them to do what you hired them to do. Finally, you need to be wise enough to know when you can’t do this and hand the reins over to someone who can.