Archive for November, 2006

Larry Sonsini Profiled in Fortune Nov-27-06

Written by Sean Murphy. Posted in Startups

I have been catching up on my reading and came across a profile of Larry Sonsini in Fortune’s Nov-27-06 print edition. The article in the print edition is titled “The Man To See In The Valley” but “Scandals rock Silicon Valley’s top legal ace” in the on-line version. It’s part of their “Portraits of Power” profiles, which includes a collection of some of the grimmest black and white portraiture I’ve seen of people who are still alive.

There is an interesting history lesson on how Wilson Sonsini came to be sui generis among Silicon Valley law firms. We pick up the story as Sonsini joins McCloskey Wilson & Mosher as their first associate in 1966.

“So we started to develop the recipe for how to build companies,” Sonsini recalls. The recipe required entrepreneurialism, capital and infrastructure, and Wilson’s law firm was part of the infrastructure. “I was becoming a piece of the recipe,” Sonsini says.

“What I was learning very early on,” he continues, “was that I could build an enterprise too. In fact, I had to.” Wilson and Sonsini both wanted to continue to represent their clients as they grew, rather than handing them off to larger firms when they went public.

To do that, they’d need additional expertise, and Sonsini was put in charge of figuring out which new specialists the firm needed, and then recruiting them. “So I guess I was thrown early on into a leadership role,” he says. In 1973 his name went on the door, and in 1978 the firm, still with fewer than 15 lawyers, adopted its current name: Wilson Sonsini Goodrich & Rosati.

The realization that they could “grow clients” in the turbulent creative destruction of Silicon Valley capitalism followed.

Though the firm represented venture capitalists and investment bankers from time to time, its preference was to represent the startups themselves – a strategy not always understood by its younger lawyers.

Latta remembers when he was an associate in the 1980s being in Sonsini’s office one day when Sonsini took a call on the speakerphone from Bill Hambrecht and George Quist. Their firm was then the dominant high-technology underwriter in San Francisco, and they had called to inquire if Wilson Sonsini would agree to become their regular outside counsel.

“I think I literally got out of the chair and started jumping up and down,” Latta recalls. He was gleeful, he explains, because he thought that now he’d have a shot at making as much money as his classmates who’d gone to San Francisco firms.

“But Larry doesn’t hesitate for a second,” Latta continues. “Immediately he takes this apologetic tone and starts talking about why that’s not a good idea for them. That there are several law firms up in San Francisco that can do just a fine job of representing them, whereas there’s really only one firm down in Palo Alto that can do a good job of representing the companies they want to back. ‘Isn’t my highest and best use for you to continue to do what I’m doing? And if, by the way, that means you introduce these companies to me if you get to them before I do, that would be appreciated.’ It was just brilliant.”

Sonsini explains: “My view was that representing companies enables you to get involved at all stages of their growth. You develop a breadth and depth that makes you a better advisor and a better lawyer. It was also a fundamental part of the business plan. Many law firms at that point were focusing more on the capital markets side, representing investment banks, and to me that left a great opportunity to really develop the other side of the business.”

Investing Creates Conflict

There was also one fringe benefit to representing the companies. Senior corporate lawyers at Valley firms sometimes got opportunities to invest in clients at the venture capital stage. Most startups would fail, but those that went public could pay off handsomely.

Taking stakes in clients, however, created a potential for conflicts of interest. If a lawyer holds stock in a client company, for instance, and then has to decide whether the client needs to disclose information that will cause its stock price to plummet, the lawyer’s judgment might be clouded. Such investing might also trigger internal rifts at a law firm, since only the corporate lawyers were likely to get the opportunities, leaving their partners in other specialties out of a lucrative loop.

So in 1978 Wilson Sonsini set up WS Investments, a fund designed to manage both problems. Each partner’s pay would automatically be docked to create the fund – the deductions were mandatory – and each would, in turn, have a stake in the proceeds.

The article points out that this practice has spread to most of the other major firms that represent startups in their early years. It allows them to convert “billable hours” into sweat equity. There is a brief testimonial from T. J. Rogers as to Sonsini’s strength as an advisor (links added).

When you meet a few of [Sonsini's] entrepreneur clients – intimidatingly smart, headstrong, combative, abrasive – it becomes apparent that these are not the easiest people to advise. Yet they all seemed willing to listen to Sonsini.

“I don’t take orders well,” says T.J. Rodgers, the founder, chairman and CEO of Cypress Semiconductor. “But taking advice from Larry Sonsini is easy. He’s professorial. He’s nonjudgmental.  ‘You can choose to do this, you can choose to do that, and these will be the consequences.’ So you realize you’re not being forced or pushed into anything. He explains to us why the sometimes frustrating, arcane and inefficient system we have makes sense, or at least made sense at one time, and therefore should be followed.”

The VC investment bubble of 1999-2000 bring WSGR attorneys enormous success but start to fundamentally distort the compensation structure and fee relationship with clients.

In 1999 and 2000, Sonsini says, it became “somewhat of a practice” in the Valley for lawyers to insist on being given investment opportunities in their startup clients as a condition of representing them. He admits that some Wilson Sonsini lawyers did this, and that they shouldn’t have.

It was widely reported that many Silicon Valley lawyers were making more off their investments in clients than from their legal work. According to The American Lawyer magazine, WS Investments distributed $175 million to the firm’s members in 2000. The figure plummeted to $8 million a year later.

WS Investments Bonus Plan is listed on WSGR’s Professional Benefits page, I can’t find a website or set of reports for the plan.

A Wilson Sonsini spokesperson says she doesn’t know where the $175 million figure came from, that it sounds wrong, and that it would be hard to compute a meaningful substitute.

I don’t know who is managing the fund but you would think someone would be accountable as to it’s disbursements. This may not be a question that they have to answer, much less want to answer to a Fortune reporter, but you would think someone would know the answer. Then again…

Sonsini maintains that only very junior partners at Wilson Sonsini – those with salaries then in the $400,000 range – would have ever made more from WS Investments than from their partnership draws. (Wilson Sonsini’s average profits per partner from legal work in 2000 were $835,000, according to The American Lawyer.)

So the implication in this perhaps technically accurate (perhaps since no one can figure out how much was disbursed) is that a bonus of 400K on top of a partner draw of 800K wouldn’t have an impact. I would seem that it was a significant component of all WSGR attorney compensation in 2000 (and probably 1999 and 2001).

OK, so what are some take-aways for entrepreneurs

  1. The best attorneys present options and make you aware of the likely and potential consequences of different courses of action, but understand that the business decision still rests with the client.
  2. If you allow an attorney to invest (and then re-capture his dollars in (possibly deferred) fees) you may find it difficult to fire or replace the attorney. Make sure it’s someone you want a long term relationship with: there is no such things as “free legal advice.”
  3. Work with advisors who are willing to be transparent about their fees. If you were a prospective WSGR client, the answers that they gave here should be unacceptable. Understand why the code of ethics for accountants prohibit similar fee arrangements.

Thoughts on Perseverance and Promises

Written by Sean Murphy. Posted in Quotes

“The future not being born, my friend, we will abstain from baptizing it.”
George MeredithBeauchamp’s Career

“Victory belongs to the most persevering.”
Napoleon Bonaparte

“Few things are impossible to diligence and skill.
Great works are performed not by strength, but perseverance.”
Samuel Johnson

“Character consists of what you do on the third and fourth tries.”
James Michener

“Success is largely about keeping your promises.”
Seth Godin in “Successful?

“Your brand is the promise that you keep.”
Kirstin Zhivago

3×5 Cards

Written by Sean Murphy. Posted in EDA, Rules of Thumb, Tools for Startups

Here’s a good tip–but stop me if you’ve already heard this one.

Always carry 3×5 cards with you wherever you go.

I keep a handful in my shirt pocket and jot down those sudden inspirations or solutions to small problems that I would otherwise quickly forget. As Francis Bacon advises:

“Write down the thoughts of the moment.
Those that come unsought for are commonly the most valuable.”

Here are some other uses I often put them to

  • At least once a week I meet someone who has forgotten or run out of business cards, and I jot down their coordinates on one (this also avoids the “business card roulette problem” where you give away one of your business cards that you had used to write the contact info for someone else on).
  • I take notes on conversations: I am forced to focus on essentials in one fifth the space (15 square in. vs. perhaps 75 in an 8-1/2 x 11 piece of paper with 1/2″ all around).
  • I record the license plates, make and model of cars with their lights on, this allows me to leave the card with a receptionist or hostess.
  • I annoy my friends with PDA’s with my embrace of obsolete technology.

I picked up this trick shortly after I started work at Monolithic Memories (original PAL company, later acquired by AMD) in February of 1984. I was hired for a new team chartered to help MMI get into the gate array business, initially by offering a “PAL Integrator.”

Although this was my fourth job, all of my earlier ones had been at small companies, and MMI was spread across three buildings that included a semiconductor fab. My first few weeks were spent with another recent hire in an 8×8 cube in an office area of the fab waiting for a new building to be completed. I was amazed at one point when the fire alarm went off and people dropped everything and ran out of the building. I was used to alarms being tests or false: no one had taken them seriously. Milling about in the parking lot I asked someone “what’s the big deal?” He explained that there were a number of gases and liquids in the fab that you didn’t really want to come into contact with–for example arsine gas, which was both flammable and highly toxic–and the fire alarm did double duty as a gas leak indicator.

Between two in a cube and the newly realized possibility of sudden death I wasn’t sure that I had made the right career move. But things got better when a new co-worker transferred in from product engineering: Tom Tierney. Tom had been recruited by the director to help our newly formed CAD group–all of us new hires except for him–take advantage of the existing knowledge inside the company. In hindsight this was a very clever move, it gave us someone who had wide access inside the company, and it gave Tom a chance to learn a lot about software tools and design flows (this was 1984: MMI was using CALMA workstations, light tables to check chip connectivity, and hand drawn schematics).

Product engineers are trouble shooters and Tom did a lot of business on the go, questioning employees and vendors both to piece together the root cause of a particular problem and to locate one or more folks who might have the expertise to help us solve it. I noticed he always carried these blank three by five cards with him, to take notes and jot down ideas and observations.

I was carrying a lab notebook, but as I watched Tom in a conversation with a third party, I realized that taking quick notes on a 3×5 didn’t create the psychological distance that whipping out an 8-1/2 x 11″ lab notebook did. And taking notes encouraged people to talk and to think through what they were telling him because he was not just paying attention, he was taking notes. A lot of these conversations were conducted in a hallway, over a cup of coffee, at a lunch break, or many times over a beer. He could easily carry a dozen 3×5 cards in his upper shirt pocket and quickly make a few key notes (or refer to them if he needed to refresh his memory).

After a few months I started to carry 3×5′s, but where Tom had preferred white cards that were blank on both sides, I would by the packs that had four colors and lines so that I could assign a color to a project or a period of time (and I found it easier to write on the lines, now that the graph paper versions of 3×5′s are available, I use them almost exclusively).

Merlin Mann has suggested you clip a number of 3×5′s together and carry them in your back (hip) pocket. But I am not as enthusiastic about that approach, compared to the front shirt pocket. I carry my wallet in my front pants pocket so that I don’t sit on it, and I have much less back trouble.

E-Mail Overload

Written by Sean Murphy. Posted in Rules of Thumb

Has become almost overused. But I find myself with an inbox hovering near 6,000 messages (5932 at the moment) and so I have to make some serious changes. I have already followed Ole Eichorn’s advice in The Tyranny of Email which offered these six rules

  1. Turn your email client off.  Pick the moment at which you’ll be interrupted.
  2. Never criticize anyone in email, and avoid technical debates.  Use face-to-face meetings or ‘phone calls instead.
  3. Be judicious in who you send email to, and who you copy on emails.
  4. Observing some formality is important.
  5. Don’t hesitate to review and revise important emails.
  6. Remember that email is a public and permanent record.

(see also his Tyranny Revisited) but I need to do much more. I currently use Eudora and make extensive use of wikis and other private workspace tools–I had an epiphany this morning that I shared with the IMC Area Breakfast for Consultant’s group in Palo Alto: if you are using E-mail as the primary vehicle for project communication and management you are relying on their ability to organize and manage their inbox to keep their end on track; we know from the extent everyone talks about e-mail overload this is not a good idea.

I make use of IM with those clients that are comfortable with it. We have switched over to WebEx Office internally, which has given us a shared calendar, action item, and contact list. I sent 3800 messages last year and 4500 year to date in 2006. I received 27,000 messages last year and 35,000 E-mails year to date in 2006. It’s a 20% increase in activity (one quarter of which is accounted for by a doubling of inbound junk mail from 1700 to 3500). I don’t think I need a “bigger hammer” as much as a total re-think of my communication pattern; at least once a week now an e-mail gets overlooked in my inbox that should not be.

I don’t have any clear plan beyond doing a ground-up re-think in December and January and continue to make changes. I welcome any suggestions, pointers to tools, good books, or other observations. I have the strong sense that none of the “modern” E-mail clients is using the right paradigm: the concept of an inbox and other folders for filing has been there from the first mail readers I was using almost 30 years ago.

I am reminded of a rule from driving in a flooded hilly area. It’s hard to tell how deep the water is from memory, but if the water starts to come over the top of the hood it’s time to back it up and try a different route before the car stalls.

Nesheim vs. Cowan on Bootstrap Economics

Written by Sean Murphy. Posted in Rules of Thumb, Startups

John Nesheim, author of High Tech Startup, has been blogging for a little over a year. His most recent post, just before Thanksgiving, gives his perspective on bootstrapping

BOTTOM LINE: Bootstraps are difficult to do. A few rare ones become giants (Dell). Most struggle and remain small, or go out of business. Buyers of such companies normally do not get rich. Think about it before you start off to do a bootstrap. The romance can quickly become a diet of stress and just plain hard work. They rarely can build an unfair advantage that converts them into amazing successes.

Wow. So venture backed startups must be easier, involve less struggle, and normally allow the founders to get rich. Of course the example he cites is a one man company selling cell phone games to the large American telco’s who are slow paying him because they can! I would think there are a number of other markets that aren’t quite so characterized by oligopsony (i.e. a market with so few buyers that they can set prices and other purchasing terms and conditions). But it doesn’t appear that he has done anything to preclude seeking at least angel funding, I don’t see why the choices are only to bootstrap on, or sell out, especially when he is anticipating revenues of 300K in the following year.

For another perspective we need to go back two weeks to David Cowan’s post “Get Big Cheap” (ellipses and hyperlinks added)

Consumer ventures used to burn so much time and money that most high tech entrepreneurs focused on carriers and large enterprises. [...] Seduced by the proposition that more capital up front would buy branding and accelerate distribution, many venture investors bought into Neil Weintraut’s motto GET BIG FAST.

Wait a minute, in Lighting the Way for Your Competitors I attributed this motto to DFJ (and certainly item 4 in their investment philosophy seems to incorporate this injunction, albeit less succinctly; item 6 hits the same note again in case you missed item 4). But in a Business Week article on December 4, 1995 entitled “The Software Revolution” Neil Weintraut, then at Hambrecht and Quist, is quoted as saying

“The marching orders are: Get big fast, subjugate profit–even revenues. Just get your product out there.”

So he was also saying it as well. Cowan continues:

We all know how that turned out. No matter how proven a team may be, they still can’t predict consumer behavior, and so we spent about $30 billion acquiring eyeballs for web sites of dubious value, and when the capital dried up, so did the businesses.

But today, entrepreneurs have the opportunity to launch web sites so rapidly into a market that adopts technology so quickly, that with some iterative tweaking and feedback from users they can test their ideas in months, and on a shoestring budget. Without the need for capital, they needn’t sport a proven track record of success, and so many many more ideas can be tested, and the winners can come out of nowhere, from anywhere on earth. With the right user experience, the best innovations can attract 50 million users in their first year of general availability, as proven by Skype, Firefox, Wikipedia, YouTube and MySpace.

And so the winning recipe today for aspiring entrepreneurs is GET BIG CHEAP. Don’t waste expensive development on untested ideas, and don’t let a fat marketing budget mask a weak value proposition. If instead you tinker your way to scalable organic growth, you’ll have a valuable business on your hands. Don’t worry about how long it takes—just make sure your burn rate is low enough to accommodate several cycles of iteration.

There’s never been a better time to start a company. Find a community underserved by technology – be they disenfranchised American teenagers, bored commuters in Asia, or small business advertisers in Europe – and repeatedly craft a better user experience for them until you GET BIG CHEAP.

My personal bias is for bootstrapping as long as possible until you have met with an unexpected success that indicates your business would benefit from additional capital to exploit the opportunity you have uncovered.

Quotes for Thanksgiving

Written by Sean Murphy. Posted in Quotes

“Many men can make a fortune but very few can build a family.”
J. S. Bryan

“The neurotic lies awake at night, composing letters to those he hates.
He seldom thinks of dropping a line to those he loves.”
Mignon McLaughlin

“When the body sinks into death, the essence of man is revealed.
Man is a knot, a web, a mesh into which relationships are tied.
Only those relationships matter.”
Antoine de Saint-Exupery

“He will always be a slave who does not know how to live upon a little.”
Horace

An excerpt from “Holiday Story” by Scott Adams

“I often think about that fire, and about the many ghosts that visited the neighborhood that summer night. I’m sure I felt the ghosts of engineers who created a technical miracle called the phone network, that later spawned the 911 system, so I could report the fire within 15 seconds of seeing it. And I know I saw the ghosts of engineers who designed the fire equipment that allowed two small teams of firefighters to conquer a burning hill. And there were the ghosts of all the firefighters who have lived before, having bequeathed their skills and traditions to each new generation. Most notably, that night I was also visited by the ghosts of September 11th, my old friends. Almost every day they visit to remind me to be more alert, to investigate strange smells, strange sounds, as I did that night, until finding one window view that revealed the flames.

Philosophers have many views of the human soul. In the end, it’s undefined, unfathomable. The only thing I know for sure is that no one really leaves.

Appreciate your ghosts, especially the ones you can still hug. Have a great holiday.”

Nusym De-cloaks 3

Written by Sean Murphy. Posted in EDA, Startups

It’s been a month since my two posts on Nusym Technology.

  • They upgraded their text treatment ( nu · sym ) to a nice logo.
  • They still promise to deliver the “most significant breakthrough in functional verification in a decade. Nusym Technology is an EDA software company that provides an order of magnitude improvement in verification productivity while capitalizing on existing verification infrastructure.” It’s hard to understand what benchmark they are measuring themselves against.
  • They don’t list any of the luminaries involved in this titanic breakthrough, which leads me to wonder if some of them have left. The Captology team at Stanford has come up with some guidelines for improving the credibility of a website; here are the first four:
    1. Make it easy to verify the accuracy of the information on your site.
      You can build web site credibility by providing third-party support (citations, references, source material) for information you present, especially if you link to this evidence. Even if people don’t follow these links, you’ve shown confidence in your material.
    2. Show that there’s a real organization behind your site.
    3. Highlight the expertise in your organization and in the content and services you provide.
    4. Show that honest and trustworthy people stand behind your site.
  • The first two “core beliefs” on the company page have been re-phrased (compare to version in “Nusym De-cloaks” to sharpen their dislike of formal technology. Also, if #2 is correct, how did PrimeTime ever get adopted? (italics is added text, strikethrough has been deleted).
    1. Dynamic verification solution. Formal technology falls short on its promise. Simulation technology continues to be the most potent bug finding tool. and will remain so for a long period of time.
    2. Ease of adoption. Tools that are hard to learn and demand changes in current flow will not be embraced by the design and verification community. Tools that require a lot of effort to learn and need a lot of work upfront to get any benefit from them will never become the tools of choice for hardware designers and verification engineers.
  • They still ask you to “stay tuned for the most significant breakthrough of the decade.” As I noted earlier, most early sites at least let you provide an e-mail address and promise to notify you.
  • I exchanged e-mail with the Dean of EDA Journalism (admittedly it’s a small school) and he indicated he hadn’t heard what Venk and crew were actually up to. As Bill Joyner observed last year “I look to Richard to help me stay abreast of new technologies and trends and to be sure I know ‘what’s happening’ in design automation.” I do too, so either the story has been embargoed or it’s not been formulated yet.
  • Nusym Technology is not listed on the 44th DAC exhibitor list, so maybe they are going to stay “quiet” in 2007 as well. As a first time exhibitor, they can just take a “suite” and give private demos by invitation only. Details as they unfold, your mileage may vary.

Update Dec 18, 2006: Richard Goering, the dean of EDA journalism, has just posted an entry about Nusym called “Tracking an elusive verification startup” on his new blog, that includes an interview with Shukla.  I have followed up this post with “Nusym De-cloaks 4” for those half dozen of my readers still following this thread.

Custom Centric Marketing Means Shifting to “Resolution Messages”

Written by Sean Murphy. Posted in Events, skmurphy

Mary Sullivan addressed “Customer Centric Marketing” last Monday, providing a number of examples of marketing messages based on the customer’s operating reality. Mary highlighted the need for marketing campaigns to recognize that the customer is in charge of the buying process today. The example messages cut through the noise (Mary provided an estimate that every day we receive some three thousand odd commercial messages) and were able to catch a prospect’s attention by speaking directly to their needs and clearly indicating how the offering would resolve them. This inverts the traditional

“Product Specs -> Features -> Benefits”

And replaces benefits with “resolution messages” to yield:

“Needs -> Resolutions -> Product Specs”

Mary has two articles available on the KickStart Alliance website that nicely summarize her presentation:

Stirr Mixer 1.8

Written by Sean Murphy. Posted in Events

I dropped by tonight’s Stirr Mixer at Illusions on 260 California Ave in Palo Alto. It’s a better venue for parking and it’s not as loud as the Blue Chalk—-if it’s too loud you are too old? I am certainly at risk for this in the Stirr crowd.

The West Coast team from Charles Rivers Ventures was there to talk about their 250K bridge loan program they announced Nov 1.
Three interesting people I came across

  1. Jim Rowson, who I last saw at Redwood Design Automation before it was absorbed by Cadence in 1994, is now helming tracking shot, a very interesting site devote to helping you assemble slide shows and put them to music. My only quibbles were that it should not require local storage of the pictures (e.g leverage Flickr and/or Photobucket) and there should be an easy way to provide a voice over narration.
  2. I had a chance to meet Steve Larsen, CEO of Krugle, after seeing him demo at Office2.0. I followed up with an e-mail to Ira Baxter at Semantic Designs, their Clone Detector offering might be a nice add-in for Krugle. Nothing will likely come of it but you never know
  3. I had a chance to meet Jeffrey McManus after seeing him demo Approver at Office2.0; alas I confused him with another Web 2.0 startup that had written on the SVASE mojo wire that they were looking for funding so we talked about that instead of how to focus Approver more sharply at a niche. My bad.

Some follow-up back and forth with Jim Rowson over e-mail

Voice over narration is on our list of stuff to do at some juncture. However, we’re thinking at the start that simple, automatic, decent videos from photos and music has a broader appeal. Doing voice overs requires a fair bit of expertise (microphone, etc.).
My thought was that it would allow Tracking Shot to do more “business oriented” stuff because messaging could be added via voice.  Folks could also add background narration snippets around a photo, group of photos, or sequence of photos. But I do agree on the recording quality, although with all of the audioblogging going on they might be able to leverage another service and just mix them in.

Bruce Mau’s Incomplete Manifesto for Growth

Written by Sean Murphy. Posted in Blogging, Rules of Thumb

Bruce Mau wrote 43 statements in 1998 to articulate his beliefs, motivations, and strategies in what he called “An Incomplete Manifesto for Growth.”

His focus is on “growth” in the sense of increasing both craftsmanship and artisanship. I have selected eight that I think are are the most applicable to folks in software startups. Fast Company offered a less incomplete list in September 2000, but I kept the numbers from the original, adding comments and some hyperlinks not in the original because that’s what bloggers do.

1. Allow events to change you. You have to be willing to grow. Growth is different from something that happens to you. You produce it. You live it. The prerequisites for growth: the openness to experience events and the willingness to be changed by them.

Don’t assume you have all the answers. If you can’t be surprised by events you probably aren’t taking enough risks. As Proust advised: The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.

10. Everyone is a leader. Growth happens. Whenever it does, allow it to emerge. Learn to follow when it makes sense. Let anyone lead.

Only hire folks whom you are willing to follow as the situation warrants and allow for situational leadership.

11. Harvest ideas. Edit applications. Ideas need a dynamic, fluid, generous environment to sustain life. Applications, on the other hand, benefit from critical rigor. Produce a high ratio of ideas to applications.

Good writing is re-writing, whether it’s English or software. Rapid prototyping is how startups innovate, this is different from perpetual beta in that at some point you have to commit (“harvest”).

16. Collaborate. The space between people working together is filled with conflict, friction, strife, exhilaration, delight, and vast creative potential.

Hire folks who spark your potential. Be wary of values conflicts. Michael Schrage observed in a January 2000 interview with Tom Peters that the Serious Play of Shared Minds needs a “shared space (any collaborative medium—cocktail napkin to computer modeling that serves as communication space that two or more people share),” so give everyone their own white board marker and let them draw from as well.

17. ____________________. Intentionally left blank. Allow space for the ideas you haven’t had yet, and for the ideas of others.

You start with a collection of hypotheses, many of which will be revised, expanded, or superseded. Others on your team will contribute if you let them.

20. Be careful to take risks. Time is genetic. Today is the child of yesterday and the parent of tomorrow. The work you produce today will create your future.”

If you never stretch you never learn and you end up working in increasingly narrow areas. Another way to unpack this advice is to consider where you have to be standing to take the last step in a project, and then the step before that, working backward to a path you can see from today.

22. Make your own tools. Hybridize your tools in order to build unique things. Even simple tools that are your own can yield entirely new avenues of exploration. Remember, tools amplify our capacities, so even a small tool can make a big difference.

Focus your tool making (or methodology making, or intellectual property creation) on the core of your product. Avoid the amoeba like instincts of a large company product team to absorb peripheral requirements into the product as you encounter them.

30. Organization = Liberty. Real innovation in design, or any other field, happens in context. That context is usually some form of cooperatively managed enterprise. Frank Gehry, for instance, is only able to realize Bilbao because his studio can deliver it on budget. The myth of a split between “creatives” and “suits” is what Leonard Cohen calls a “charming artifact of the past.”

Engineering is about managing constraints: budgets come in dollars, people’s time, the team’s creative enthusiasm, and calendar time. It’s as important to achieve a working team as a working product. Also, if you are bootstrapping this is the key to your independence and continued success.

Why 43? It’s slightly more than half of the magic number 95 that Martin Luther or the Cluetrain team needed, but it’s explicitly labeled “incomplete”, so perhaps he will “double up” at some point. On the other hand there is David Allen who thinks 43 is just right for Getting Things Done, and even though he’s no longer blogging, his disciple Merlin Mann continues to spread the good word number.


Postscript: William Gibson gave up blogging for while

LAST POSTCARD FROM COSTA DEL BLOG

Time for me to get back to my day job, which means that it’s time for me to stop blogging.

I’ve found blogging to be a low-impact activity, mildly narcotic and mostly quite convivial, but the thing I’ve most enjoyed about it is how it never fails to underline the fact that if I’m doing this I’m definitely not writing a novel – that is, if I’m still blogging, I’m definitely still on vacation.

But he returned about 13 months later, commenting on Bruce Mau’s Massive Change in his first month back (there’s the connection to the title), and blogging regularly thereafter.

Mary Sullivan on Customer-Centric Marketing at SDForum Marketing SIG Tonight

Written by Sean Murphy. Posted in Events

Mary Sullivan has prepared a great presentation on “It’s All About Them: Customer-Focused Messaging” for the tonight’s SDForum Marketing SIG at DLA Piper Silicon Valley.

Mary offers a messaging framework for moving beyond product-centric features and product-centric benefits to demonstrating your understanding of a prospect’s problems, needs, and wants. If you want to see more samples of her thinking for startups see her two blogs “Way to Grow” and “First Year

The meeting starts at 6:30 with networking, Mary’s presentation will be from 7-8:15PM. I have previewed it with her and was struck by the number of thought provoking suggestions for marketing folks–and software startup founding teams–used to focusing on features.

Just a brief note on the SDForum Marketing SIG, our promise is “Practical tips and techniques for anticipating, identifying, and satisfying customers needs for emerging technologies profitably.”  We are guided by this quote from “Management: Task, Responsibilities, Practices” by Peter Drucker on the importance of marketing:

“Because the purpose of business is to create a customer, the business enterprise has two–and only these two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

Update August 2008: Mary Sullivan’s slides are now available here http://www.sdforum.com/document/docWindow.cfm?fuseaction=document.viewDocument&documentid=85&documentFormatId=103

3 things I learned at Next Step’s “How to Sell the Real Value of Your Solution”

Written by Theresa Shafer. Posted in Consulting Business, Events, Startups

Here are 3 things I learned from Jennifer Vessels in Next Step’s workshop “How to Sell the Real Value of Your Solution” on Thursday, November 7.

  1. I need to align my sales efforts with my prospect’s success factors. This means that I need to figure how they are getting measured and how to influence and serve their basic needs.
  2. We had an interesting and lively discussion about selling to or around corporate gatekeepers, typically purchasing and IT departments.
  3. They recommended a book called “Questions That Sell: The Powerful Process For Discovering What Your Customers Really Want“, which I plan to check out and report back on in more detail.

The “Art of Rainmaking” at Art of the Start

Written by Francis Adanza. Posted in Events, Startups

On Nov. 8, I attended the Guy Kawasaki Art of the Start Seminar. This was the second time I have listened to Guy’s presentation. Guy is an amazing speaker and has given this pitch a hundred times. Even after 100′s of presentations, Guy continues to illustrate passion and enthusiasm in his Art of the Start pitch. A few techniques that he used to keep the crowd enticed and entertained were using current topics for examples and news breaking politics for jokes.

Three lessons that I took away from “The Art of Rainmaking” portion of the seminar include:

  1. Build Credibility
  2. Find the Influencers
  3. Don’t use Cheap Adjectives

Building credibility is difficult as a start up. Some obstacles you should overcome to help make you more credible include:

  • Closing paying customers
  • Developing strategic partners
  • Investor board for references
  • Advisers / industry experts who believe and will testify for you
  • Milestones- what is your path for success

Finding the influencers is key. Often start ups try to sell to executives, which means asking someone with a budget and an overwhelming amount of responsibility to take a gamble on unproven technology. As a first time CEO, you lack the credibility to be trusted to deliver on your claims. Startups would be better served to find prospects who are already looking for a solution to a problem they solve. Even if these prospects do not make the purchasing decision, they will influence the decision maker.

Cheap Adjectives are words like revolutionary, disruptive, culture altering, paradigm shifting, and change the way. Commerce has been taking place for over 3000 years: it is virtually impossible to come up with a new way of generating revenue. When selling, do not over state claims and bullshit your customers with cheap adjectives.

Two key things we try to help clients understand: their prospect’s perception of the total cost of acquisition, and initially its easier to close smaller companies.

  • What is the opportunity cost of implementing your software? How many guys must be pulled away from their day to day job to work on a special project? If you cannot tell the customer something that they do not already know about their business in two hours or less, you are wasting their time. Furthermore, your software must be installed, usable, and delivering results in a week. Finding the influencers is essentially finding your early adopters.
  • Most early adopters are found in small or medium sized companies. As a start up, it is too difficult to close a Fortune 500 company. Go after smaller companies, close business, and build credibility.

The Art of the Start is an amazing book and an even better seminar. They are definitely worth your time.

3 things I learned at Art of the Start

Written by Theresa Shafer. Posted in Events, Startups

Art of the Start is one of the best workshops out there for startups. Here are 3 things I learned from it.

  1. Mary Hodder, founder and CEO of Dabble, reminded the audience of the saying “If you want money, ask for advice. If you want advice, ask for money!”
  2. One of the most important Guy Kawasaki’s rules: 10/20/30. It applies to all pitches whether to VC or prospects. 10 slides, 20 minutes and 30 point font size.
  3. I learned about an interesting new startup Slideshare. It allows you to share powerpoint slides. We will be checking this out soon.

KMWorld 2006 Wrap-up

Written by Sean Murphy. Posted in Events

I did my profile in http://kmi06.pbwiki.com/SeanMurphy in the form of a FAQ

Q:Why do you come to KMWorld?

This is my third year, so it’s something of a triumph of hope over experience, but I believe that there are a number of techniques and technologies in the “knowledge management” space that are going to have a profound impact on business. This conference is one place to listen to bona fide practitioners and see vendors with innovative technology you don’t see in many other venues and certainly not all together.

Q: Are there specific technology issues that you are interested in?

  • How are wikis, blogs, and instant messaging (IM) tools going to merge into content management systems on corporate intranets?
  • How can the very powerful text analytics tools available for enterprises be scaled down so that they work for personal information management: I am thinking of a number of things like latent semantic indexing, recommendation and group lens systems for small teams and ad hoc groups, and e-discovery tools that I could use for my e-mail and IM (instead of by a corporate compliance officer or outside counsel).

Q:If you could merge this conference with another one which would it be?

Two choices: Techdirt Greenhouse and Office 2.0:

  • Techdirt Greenhouse (see also the wiki for the Jun-10-2006 event) fosters a level of discussion among the attendees that would be very energizing at KMWorld. Have 3 people come up and present a current challenge in their organization related to knowledge management. The group breaks into six teams, two each working on the three issues. There is small group discussion, a report back to the larger group by each team, and then a large group discussion
  • Office 2.0[1] had a number of vendors aimed at replacing PC based apps with web services, the net effect was to focus on enabling group process and communication. Many of these applications have a strong potential to enable much more effective knowledge sharing at least in a team setting than any of the “top down” enterprise class portals that make the same promise.

Q: Any sessions in particular you plan to attend?

I missed Tuesday because of a prior commitment but today I plan to listen to Dave Pollard, whom I find to be consistently insightful, talk about “Adding Meaning and Value to Information” in Session A203

Q: Did you see any new vendors on the Exhibits Floor that are worth mentioning.

The Abbrevity folks look like they have a very interesting and very scalable file classifier that is extremely low cost, designed to be run in parallel, and could scan an enterprise intranet and attached file systems overnight. It may form the basis for some interesting vertical applications when they find the right partners.

One under-appreciated company is Traction Software which offers a richly featured blogging / content management system that has seen uptake in environments with complex security requirements (e.g. a number of three letter government agencies). But they already ten years old, and may not be willing to make the changes (or perhaps take the risks) to gain wider acceptance.

I spent a lot of time in the adjacent hall in the “Streaming Media” show where there was an interesting mix of technologies for video and audio broadcasting that struck me as very applicable to enterprise training needs. One company that I was interested in there in particular was Blogtronix looks like it would be very useful for mid-size and larger corporations with rich internal blogging ecosystems that they want to keep inside the firewall (or perhaps only publish via extranet/VPN), it offers a mix of functions that others are sure to follow but I was still excited to see it. I chatted briefly with Dave Sifry last year after an AlwaysOn breakfast and asked him why Technorati didn’t offer an appliance for intranet blogging ecosystems: “off strategy” was his reply. Probably the right answer for his firm but there is clearly a need. (Update Nov 7: Intel seems to think so as well with SuiteTwo)

Q: Any advice for the Conference Organizers?

It sure would be nice if each session had a permalink and trackback function, if it’s available I haven’t found it).

Q: What else can you tell us about yourself?

I have a backgrounder here: http://www.skmurphy.com/about/

[1] Update Jan-18-2011: Office 2.0 website www.office20con.com has been taken over by spammers, links deleted.

Blogging From KMWorld 2006

Written by Sean Murphy. Posted in Blogging, Consulting Business

There is a wiki for the conference at http://kmi06.pbwiki.com/ where I will also be doing some gardening (which I think sounds better than gnoming).

We are also helping out New Idea Engineering with their booth; if you get a chance drop by booth 200 and say hello to Dr. Search, who first appeared in Issue 6 of the Enterprise Search Newsletter (and bears a remarkable resemblance to Theresa, at least on the show floor). If your job involves the care and feeding of an enterprise search engine it’s worth subscribing. There is also a Yahoo group for Independent Search Engine Developers

A technical and business discussion group for developers, consultants, IT people and managers who work with Enterprise Search Engines such as Autonomy (now owns Verity and Ultraseek as well), Endeca, FAST, Google (Enterprise), IBM Omnifind, Nutch, Oracle Text, and Lucene. While some engines already have specific groups, most large companies own more than one engine; vendor selection and integration can be rather complex, and of course each vendor pushes their own solutions.

Full disclosure: New Idea is a client, I like wikis, and everyone remains fully clothed at all times while visiting Dr. Search on the show floor.

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