Archive for October, 2007

Getting Feedback on your Work

Written by Theresa Shafer. Posted in Consulting Business, Startups

Getting feedback after engaging with a client or even after an introductory meeting with a prospect is important. A couple of survey tools that we use are iContact and Survey Monkey. They are easy to use and low cost. Survey Monkey has some nice templates. The survey tools are useful when you want to ask the same fixed set of questions of several dozen to several hundred folks at once.

Here are our basic feedback survey questions:

To help us calibrate and improve our engagement model and the quality of our advice, please take a few minutes and answer three questions for us. Looking back on our conversation and e-mail exchange could you outline briefly (can be just one phrase or sentence)

  1. The three most useful concepts or suggestions that you took away from our conversation or subsequent e-mail
  2. The three least useful (or even worthless or counter-productive) concepts or suggestions that you heard in the interaction.
  3. Up to three specific changes that you have made in your strategy or engagement process as a result of our interaction (again can just be a phrase or one sentence).

If we don’t get an answer we will typically have someone who had little or no involvement in the project call and follow up to ask the questions over the phone. Because they had little involvement in the project it’s unlikely that client will be dissatisfied with them personally and more likely to share feedback. In general the combination of a personal e-mail and a personal phone call will get you the most information.

Free Small Business eNewsletter From IRS

Written by Theresa Shafer. Posted in Consulting Business, Startups, Tools for Startups

e-News for Small Businesses is a free electronic mail service designed to provide tax information for small business owners and self-employed individuals. Subscribers receive information about important upcoming tax dates for SB/SE customers, what’s new for small businesses on the IRS Web site, reminders and tips to assist small businesses and self-employed taxpayers with tax compliance issues, IRS News Releases and special IRS announcements that pertain to SB/SE customers.

If you haven’t found an accountant for your business taxes now is the time to get your files in order and interview a few based on other business owner recommendations. If you are based in Silicon Valley and are interested in our advice, talk to Ogden Lilly at Boitano Sargent and Lilly.

ANZA Tech’s Gateway to the US Summit: Marketing Business Forum

Written by Francis Adanza. Posted in Blogging, Events

While at the ANZA Technology Network2007 Gateway to the US Summit, I attended the Marketing Business Forum panel discussion. This was a question and answer session on how emerging technology companies can gain traction using innovative marketing tools and tactics.

The moderator: Chris Shipley, Co-Founder & Editorial Director, Guidewire Group

The panel speakers:

The two hot topics of the hour were “Social Media” and “Blogging.”

Mike’s thoughts on social media:
Traditional, yet still highly influential, social media mediums include message boards, user groups, and forums. However, blogs, vlogs, podcasts, and wikis are becoming the more popular social mediums of today. If done correctly, social media can be an effective marketing strategy to reach larger audiences. Mike believes that the various mixes of social mediums is developing a new brand of influencers, enabling companies to pinpoint smaller niche audiences.

Buzz shared a story on how blogging helped him enhance his relationship with customers:
Buzz believes you cannot afford not to blog. While working with his technical team, he realized they were the only ones using a certain type of terminology. Through blogging he was able to have conversations with customers and learn that his messaging was wrong. Additionally, he was able to find someone who became their biggest evangelist. Blogging allowed him to obtain feedback from prospects and incorporate features into the product roadmap.

Sean and Ann Marcus have written an article on How Do Blogs and Wiki Help Me Collaborate With My Customers that has some tips that are relevant to this topic, three key ones:

  • Plan Ahead: schedule your level of effort and some publication targets and stick with them.
  • Focus for Effect: pick a few topic areas that are relevant to your prospects and explore them.
  • Cite References: so many new bloggers write as if they were distributing hard copy; link to your sources.

Is Blogging Worthwhile?

Written by Theresa Shafer. Posted in Blogging

Here is one question I get asked all the time:

Is Blogging worthwhile way to promote your business or just a big, newfangled time suck?

Our short answer is that you need a website for your business: one of the easiest ways to manage it and keep it up to date is to use a blogging platform to manage your site. Instead of a “What’s New” page just say “Blog.” Once it’s set up you should have a simple editor available to edit any page on your website or add new pages.

Joseph A. Murphy (1925-2007)

Written by Sean Murphy. Posted in skmurphy

My father died suddenly of a heart attack at home in St. Louis last night with my mother and brother present. He had been to see his internist that morning and gotten a clean bill of health. He would have been 82 in a week. He lived a full and independent life to the end: “You can always tell an Irishman, but you can’t tell him much.” I spoke with him almost every week by phone: Sunday night he called full of energy and in good spirits, we talked for perhaps 75 minutes and he had a chance to speak to each of my boys for a while as well.

His best advice to me was that “to not make a decision is to make a decision.”

They say that the words you regret are the ones you never say, and in that regard I am fortunate. He had a stroke in 1994 that he made a full recovery from. But the early diagnosis was so severe that his cardiologist advised me that I needed to fly to St. Louis immediately and “help my family get its affairs in order.” Pop made a complete recovery but the episode reset our relationship and gave us a chance to talk. Still, David Gates’ words in “Everything I Own” are good advice for all of us wrapped up in our startups:

Is there someone you know,
you’re loving them so,
but taking them all for granted.
You may lose them one day,
someone takes them away,
and they don’t hear the words you long to say
I would give anything I own,
Give up me life, my heart, my home.
I would give everything I own
Just to have you back again

Dharmesh Shah’s Pithy Thoughts For Startup Co-Founders

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

Dharmesh Shah wrote a great post on his On Startups blog where he outlined 17 pithy suggestions for software startup co-founders. While I have picked what I think are the best half-dozen, preserving his original numbers. I would encourage you to read the full article.

1. Seek transparency and understanding with your partners early. Issues get harder as time passes

Here are some good rules of thumb I have picked up over the years on transparency:

  • Don’t have one person both write and sign a check. Always have one founder sign any check that represents a payment to another founder (never pay yourself company funds without having written authorization from another founder).
  • Use something simple like Quickbooks or Quickbooks on-line, take at least 30 minutes once a month to review financials.
  • One founder has to be CEO, agreement is always preferable to fiat, but deadlock never succeeds.
  • Never do a 50-50 split (remember that Packard had 60% and Hewlett 40%), if you want an even split select a tie-breaker board member and do 49-49-2 split so that any two represent a majority. Pick someone you both trust and respect. With three or more founders take care to arrange the equity distribution to avoid the possibility for deadlock, add a tie-breaker if needed.

4. If you’re changing direction often, worry a little. If you’re changing people often, worry a lot.

Charles Caleb Colton observed that “A windmill is eternally at work to accomplish one end, although it shifts with every variation of the weathercock, and assumes ten different positions in a day.” If you are changing direction tactically that’s probably inevitable. But if you are changing some fundamental assumptions about your core competencies or the marketplace then you should be very explicit with yourself and the team that you’ve learned something. If you can’t build or retain a core team you may have a problem with your mission, your traction, or your ability to lead.

8. Until you are profitable, time is working against you. Once you are profitable, time is on your side.

Focus as much on the spend side–your “burn rate“–as you do on generating revenue. Expense growth should lag revenue growth. Revenue is important but bona fide references precede any significant revenue growth, and your early customers end up paying less for a product that almost works for a variety of reasons. It’s more important to have them pay something and turn them into a long term satisfied reference, than to focus purely on the revenue side.

11. Force yourself to write, as it will force you to think.

At different times I’ve kept a journal, an in-house blog, and written status reports to an informal set of advisors (or “kitchen cabinet“). For SKMurphy work, I find that my common development paths for written content is to answer someone in a e-mail, because it’s easiest for me to write with a specific audience in mind, and then re-purpose that into a blog entry if I find myself going back a second time and using it. If I send the URL for the post more than once or twice I think about either expanding the post into an article or aggregating a couple of posts into an article.

16. You choose your destiny, because you choose your team.

Hiring (and firing) decisions are the most difficult. In a small firm everyone is steering so be careful who else you select to sit in the pilot house. Your team aggregates social capital, intellectual capital, and normally a small amount of financial capital if you are bootstrapping. Collective focus and effective collective action translates this capital into results: put another way, if the results of teamwork are less than the sum of the individual efforts you are either not focused and pulling in the same direction or one or more of your team is doing negative work.

17. Be who you are. Do what you love. Join people you like.

This should be #1 on his list. It applies to whatever path you find yourself on.

Viki Forrest talks about ANZA Technology Network’s Gateway to US Summit

Written by Francis Adanza. Posted in Events

Today is the kick off to the 2007 Gateway to the US Summit, hosted by the ANZA Technology Network at Plug and Play. The three day conference is the beginning of a three month program designed for Australian and New Zealand companies who are considering the possibility of doing business in the US market. I caught up with Viki Forrest, CEO of ANZA, last week for a short interview.

Q: What are the top three concerns Australian and New Zealand firms have when they try to enter the US market?

  1. The cost of doing business in the US (relative to Australia it is extremely high)
  2. Determining the best market entry strategy (there are so many options!)
  3. Identifying the best partners/channels to market (without a trusted personal network to rely on, this can be extremely daunting)

Q: What were some of the biggest surprises for the companies who visited Silicon Valley last year at the Anzatech Forum?

After a brief visit to Silicon Valley there is enormous excitement about the size of the opportunity and how BIG everyone’s thinking is in the Valley. After a couple of months of working with ANZA most CEOs realize (1st surprise) they will need 2-3 times more money than originally thought, (2nd surprise) their business plans/market entry strategy has been completely re-written and (3rd surprise) they are truly shocked by the cost (cash and options) of employees.

Q: What specific benefits does your organization offer as a part of their service?

Our programs are built around providing seasoned executives who mentor the companies. This delivers benefits at a very personal level to the executives participating in the program. At the end of the day they are far better prepared to do business in the US. Secondly, our mentors and our members provide personal introductions to their trusted networks of executives. The benefit here is that the executive is not starting from scratch in developing a network, this results in huge benefits in terms of speed to market: 80% (at least) of business in the US is conducted through personal/business relationships and networks. Arriving in the US from a foreign country-–without a network-–can be an insurmountable obstacle to doing business. There are exceptions but they are rare. Our programs have been designed to specifically address this obstacle by connecting CEOs in a trusted environment.

Q: How do you think your companies measure or assess the quality of the service you provide?

We track the performance of our clients on 3 dimensions: investments secured, US revenues, and US strategic alliances/relationships. These results form the basis of our program exit interviews with our clients.

Q: Wednesday is full of great business sessions, who within Silicon Valley would you like to attend these sessions?

Our business forums are designed for the Australian and New Zealand executives who generally have not done business in the US before. Any foreign executive new to the US would get a great deal out of attending, as would any young entrepreneur starting their first venture.

Three Phrases Prospects Should Not Find On Your Website

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

  1. Please Come Back Soon accompanied by a promise of more information shortly. If you do, don’t put a date next to it because when that date is three months old prospects get a “lost dial tone” sensation, they are not sure your firm is still active. Variations that are equally annoying:
    • Please check back soon
    • Please keep checking for changes
  2. This Page is Under Construction enough has been written about this one it’s still surprising to find it.
  3. Confidential – Do Not Distribute useful when competitors do this, less humorous as an “own goal.”

Don’s Three Rules of Deal Making

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

Don was Theresa’s boss at 3Com for a while. He had earned a PhD but the process hadn’t stamped out his practicality and creativity as it can in some. An electrical engineer by training, a manager by title, he carried a small toolkit with him in case something needed fixing. And it’s a funny thing, but if you carry a pocket knife you find a lot of things need cutting; if you carry a toolkit a lot of things need some fixing.

One day his badge didn’t work in the card reader and he couldn’t get in the building. It was early and he didn’t feel like waiting. Since he couldn’t fix his badge he summoned his inner Harry Tuttle (who was, to be completely honest, never that far from the surface) and dis-assembled the card reader mechanism (those small tools come in handy), shorted out the interlock, got the door to open and more or less re-assembled the reader mechanism (apparently a few wires and small parts had multiplied as they are wont to do when turned loose). The door stayed unlocked until a freaked out security guard got someone from the cardkey firm to come out and repair the mechanism.

As I said, he had some long entrepreneurial stretches in his life. Those of you founding startups know you wouldn’t let a small thing like the cardkey reader not working prevent you from getting into the building (and no, you wouldn’t be calling security so you could answer a dozen questions, produce various documents, and submit to a hairy eyeball inspection or two).

I had left Cisco in the mid 90′s to make a small fortune in the dot com meltdown and Theresa suggested I sit down with Don and get the benefit of his perspective on how entrepreneurs who knew what they were doing made deals.
We had a long talk that covered a number of topics related to starting a company and making deals. He mentioned that in his youth people would talk of “men, money, and machines” as the key ingredients for a successful business. In Silicon Valley that had become “team, technology, and traction.” He made three points about making deals that I wrote down and still follow:

    1. Spend 1% of the value of a deal on lawyers. Before you sign a final contract (but not before you get to a meeting of the minds), have an attorney review it to advise you of the risks. Be prepared to spend 1% of the value of the deal on legal fees to manage/minimize the risks.
    2. Before you accept money figure out two ways to repay it. Don had started several ventures by borrowing other folks retirement money and he had been careful to repay it. I meet many entrepreneurs who can explain how they plan to spend investors money, but very few who pay attention to how they can repay it, preferably with some return, and what their contingency plan is if the first approach doesn’t work.
    3. Before you get into a deal figure out what it will cost to get out. Many deals look like a marriage, which is characterized by low barriers to entry but high barriers to exit: they are easy to initiate but difficult or expensive to end. As Mark Twain once observed “It’s easier to stay out than get out,” negotiate how you can end the deal at the beginning when everyone is still talking and optimistic about the future.

    Social Networks for Running your Business

    Written by Theresa Shafer. Posted in 1 Idea Stage, Tools for Startups

    Here are the social networks I participate in. I find them a good source for practical advice for running my business.

    Check me out, my screen name is tshafer.

    The Challenge of Advising Entrepreneurs

    Written by Sean Murphy. Posted in Consulting Business, skmurphy, Startups

    “The more I heard that I couldn’t make it, the more I was determined to do it. I never liked being told that I’m not good enough to do this or that.” Archie Griffin

    Entrepreneurs “need to be a little crazy” if you believe Barry Moltz. They get advice from well meaning friends and family that consists primarily of admonitions to stay on the beaten path: “Don’t quit your day job” or “Stay in school” to recall two, the latter normally a good idea (Bill Gates, Steve Jobs, and Michael Dell are convincing counter-examples but not a representative sample). But those friends are not normally entrepreneurs.

    There was a nugget I extracted from Fortune’s November 2006 profile of Larry Sonsini that helps to explain his success in advising strong willed entrepreneurs:

    “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.’”

    It’s a sound approach when working with entrepreneurs: present likely consequences and the reasons why you believe that they will ensue.

    Dharmesh Shah was complaining in July of this year that the customer is not always right and that “In most cases, our understanding is much higher than that of our customers.” He is selling to startup and small businesses who can’t figure out whether to accept his firm’s advice. He identifies four concerns that they may have that will prevent them from following his advice:

    1. What’s in it for you?
    2. Do you understand me?
    3. Are you really an expert?
    4. Did the expert make the call?

    It’s a good blog post even though his frustration shows through a little too clearly. He offers two choices: you can be a “trusted advisor” (to borrow David Maister‘s phrase) or a “responsive assistant.” He closes with “Have you ever had to tell a customer they were wrong? How did you handle it?”

    My answer follows, slightly amended from the comment I left on September 20 on his blog (and with formatting restored).

    We offer strategic advice and business development consulting to early stage firms.

    As such we fit your model of “trusted adviser” to entrepreneurs. In my experience it’s very difficult to tell an entrepreneur “you are wrong” (and have them listen and change their actions) because they hear this from so many of the folks around them (“get a real job”, “your idea will never work”, “no one else does it that way”,…) that they are no longer sure who to trust. In some instances this is like waving a red flag in front of a bull: we meet entrepreneurs who are more interested in proving someone else wrong (typically from their last company) than in building a company.

    We work with them to estimate the likely future impacts of present decisions and understand the likely consequences. I find that a simple plan or decision tree can do more to illuminate the situation for an entrepreneurial team than any amount of telling. It’s normally the question that gets them to think through likely consequences that is more likely to change behavior than statements like “you’re wrong” or “this is a mistake.” Although we still try the other approach from time to time to see if it has started to work.

    We also try and follow Russell Ackoff‘s “decision record” approach where we treat decisions as experiments and write down our hypotheses (“guesses” or “informed judgment” depending upon your perspective) about results in advance and then review them against measurable outcomes after enough time has passed.

    True expertise means that you should be able to explain:

    • the symptoms you looked at,
    • symptoms you discarded as not germane,
    • the diagnosis you have reached,
    • the differential between the customer’s relevant symptoms and your diagnosis versus other potential diagnoses,
    • the prescription (advice) and how to apply it,
    • and a prognosis or range of likely outcomes.

    In some sense it’s less about who’s right and more about developing a shared understanding and shared situational awareness. Trust is built over time through competence, commitment, and care. You have to find a model that let’s you work with a customer in a way that earns their trust.

    I think you also have to distinguish between decisions that are values conflicts (e.g. we want you to misrepresent a product or service to the point where you are knowingly committing a fraud) and decisions that are less than optimal, or may not necessarily get good results but are not in conflict with your values.

    At the end of the day it’s still their company and it’s distinct from yours.

    You’ve Launched, Now What? at KASE/KIN Oct 16

    Written by Sean Murphy. Posted in Events, skmurphy

    I will be speaking on “Now What? Your Post Launch Growth Plan” at the KASE / KIN Entrepreneur Academy tomorrow night.

    Location: KIICA Silicon Valley at 3003 N. First Street San Jose, CA 95134

    Agenda

    • 5:50PM – 6:00PM Registration and Networking
    • 6:00PM – 6:30PM Successful Entrepreneur – Paul Tien
    • 6:30PM – 6:45PM Break
    • 6:45PM – 7:45PM Launching your business and executing the plan – Claire Chang
    • 7:45PM – 8:00PM Dinner Break
    • 8:00PM – 9:00PM Now what? Post launch growth plan – Sean Murphy

    The theme of talk will be “What was once heroic must become routine.” I will take a look at how things change between beta and post launch. In particular post launch growth looks very different from early customer acquisition efforts, placing new requirements on the firm as a whole as well as triggering changes in practices and organizational structure in both customer development (sales, marketing, business development) and product development (engineering, quality, support).

    Registration is $20 if you haven’t already signed up.

    Update Apr-1-2008: a transcript and podcast are now available for this talk.

    Update July-7-2008: a related blog post “What Was Heroic Must Become Routine” applies some of the lessons from this talk to some other startup examples.

    SaaS Blurs Traditional Software Startup Roles

    Written by Theresa Shafer. Posted in Events, TwoWeekSaaS

    SaaS business models are proven and and gaining wide adoption. However they come with new issues: shorter release cycles, blurring of development team roles, and the need for new internal reporting and management controls now that you are responsible for the customers application infrastructure. Your development, support, sales, and product marketing folks must change how they monitor customer usage and satisfaction and reach a working consensus on customer feature requests and bug fixes based on different metrics now that you control not only your own application but your customer’s infrastructure.

    Gone are the days of annual release cycle. For many companies, very fast releases are the new standard. Picking the best software release cycle impacts your customers, team, and management. These changes impact the team traditional roles and responsibility. No longer can development throw it over the fence to QA or documentation. No longer does marketing write lengthy MRDs. The team changes to balance the quality, usability, and time to market objectives.

    As Sean covered in Iterating Towards Bethlehem: Michael Sippey at SVPMA 8/2/2006

    “Let’s build a product” evolved into “Let’s iterate a service.” SixApart determined that the right periodicity was a release every two weeks. This means that three key processes must proceed in parallel:

    • Define and Design
    • Build and Test
    • Release.

    The keys to making it work include keeping the roadmap and schedule on a wiki, using lightweight specifications and FogBugz, and staying committed to gradual improvements over time. [...]
    This concept of making the transition from a software product to a service (or Software as a Service — SaaS) that’s on a two week release cycle will be a theme for this blog: we will explore in more detail why it brings significant business advantages and requires just as significant a set of changes in a startup’s development process.

    After attending some sessions at CINACon earlier this month, I blogged about the “Benefits of a Saas Business Model.” If you are interested in taking part in a round table discussion on these issues, please join us Tuesday, Oct 30 for a SaaS Roundtable: Managing Rapid Release Cycles.

    Quotes on Operational Excellence

    Written by Theresa Shafer. Posted in Quotes, skmurphy

    “We are what we repeatedly do. Excellence, then, is not an act, but a habit.”
    Aristotle

    “Enjoyment is not a goal, it is a feeling that accompanies important ongoing activity.”
    Paul Goodman

    “It goes without saying that as soon as one cherishes the thought of winning the contest or displaying one’s skill in technique, swordsmanship is doomed.”
    Takano Shigeyoshi

    “The mastery of nature is vainly believed to be an adequate substitute for self-mastery.”
    Reinhold Niebuhr

    “Not only has one to do one’s best, one must, while doing one’s best, remain detached from whatever one is trying to achieve.”
    Janwillem Van De Wetering

    “The best, most efficient, most profitable way to operate a business is to give everybody in the company a voice in saying how the company is run and a stake in the financial outcome, good or bad …. A business should be run like an aquarium, where everybody can see what’s going on — what’s going in, what’s moving around, what’s coming out. That’s the only way to make sure people understand what you’re doing, and why, and have some input into deciding where you are going. Then, when the unexpected happens, they know how to react and react quickly.”
    Jack Stack, “The Great Game of Business

    “The maximum effective range of an excuse is zero meters.”
    Ralph Peters quoting “an old Army aphorism”

    “If you’re not part of the solution, you’re part of the precipitate.”
    Steve Wright

    Update Oct-25-2010 A comment left by Sanjay Asolkar reminded me of this quote:

    “It’s no use saying, We are doing our best. You have got to succeed in doing what is necessary.”
    Winston Churchill

    Founder’s Story: Rick Munden of FMF & Epiphyte

    Written by Sean Murphy. Posted in EDA, Founder Story, skmurphy

    I first met Rick Munden more than a decade ago when we were both managers attending an Electronic Design Process workshop. I ran into him last December at an SDForum Emerging Technologies SIG meeting and we renewed our acquaintance. I invited him to our Bootstrapper’s Breakfast since he was mulling his new company Epiphyte. This interview grew out of several conversations that we’ve had in the last year. They have been condensed, spell checked, and hyperlinked for your reading pleasure.

    Q: You’ve been entrepreneurial since high school. Could you talk about your first company?

    My first legal business was a newsstand in Chicago’s Hyde Park neighborhood in 1965 when I was 15. I started it with a friend, Bob Katzman. It was a third kid’s idea but he was not inclined to follow through on it.

    I sold my half of the business to Bob after about 16 months (and I was old enough to get a technical job). He grew the newsstand into a chain of bookstores over the following 20 years. Bob has written books about the newsstand and Chicago in that era and blogs at Different Slants.

    Q: What were some of the key things you’ve learned from that?

    The two things I took away from the experience were a respect for my customers–they are the most important part of any business– and the realization that retailing is not intellectually stimulating for me.

    Q: You’ve also been involved in semiconductors, system design, and CAD/CAE for a number of years. What were some of the more interesting problems you had to solve?

    I managed design engineering environments from 1987 till 2006, first at TRW in Redondo Beach, CA, then at Acuson/Siemens Ultrasound in Mountain View. During that time, although I had to support everything from chips to systems, including mechanical and software. I was personally more focused on board and system level design and verification.

    I found the heart of any CAE system to be the libraries. In a company designing anything but the simplest boards, the libraries must be architected and optimized for efficient data transfer across a variety of tools, often from different vendors. The libraries I designed contained schematic symbols, PCB footprints, electrical information, purchasing information, signal integrity models, functional simulation models, timing information, and traceability information.

    Q: What tools or methodologies did you develop that you still use?

    The most important thing developed was the simulation modeling methodology. Fortunately, I had some very smart people working with me and we were able to come up with a modeling practice that has needed only a couple of tweaks over the past 12 years. We came up with a coding style based on VHDL/VITAL that allowed us to model a wide range of digital components that we could find no other way to accurately model. VHDL/VITAL was not the first thing we tried but, looking back, I think it was a fortuitous choice.

    Q: You also started the Free Model Foundry, can you talk about what led you to do that?

    When I was a manager at TRW, one of the engineering problems we had was how to simulate a board in order to reduce or eliminate the number of prototype board spins. Board spins were expensive and consumed way too much schedule. The biggest obstacle to simulation was the lack of models of the parts we wanted to use.

    This was in the early ’90s so every tool vendor had their own proprietary simulator and models created for one would not work on any other. I had been writing models for several years but every time we switched EDA vendors I had to start over again.

    Then VHDL came out. At first there were compatibility problems and none of the big companies could make simulators that implemented the full language. Eventually, a number of startups succeeded and were soon bought by the major players. In response, Cadence opened up Verilog.

    Cadence had Verilog-XL and another product called Veritime that was a static timing verifier that read Verilog models. We thought “wouldn’t it be great if we could write one model that could be used for both dynamic simulation and static timing verification?”

    We tried writing some models of small ECL parts in Verilog but could not model all the functionality. We hired some professionals to do the job but they also failed. Then we tried to netlist one of our Cadence schematics to Verilog and found out how difficult that was. We managed to get one design through the process but it was a very bad experience.

    About that time, the VHDL/VITAL standard was being tested. One of my colleagues, Russ Vreeland, investigated and suggested we try it. The results were great. We could model our ECL parts easily and Cadence’s VHDL netlister was much better than their Verilog netlister. The next step was to populate our library.

    There are a lot of digital parts in the world and people keep designing new ones. TRW did not want to be in the modeling business and at that time, neither did the IC companies. We thought if we documented a successful modeling strategy and published the models we created for our own use, other engineers would join in. Sharing models would be much more efficient than everyone re-writing the same ones. I have been a long time fan of the Free Software Foundation so I suggested we do something along those same lines for simulation models.

    In 1995 two other TRW engineers and I incorporated the Free Model Foundation. Because we were trying to solve a problem rather than create a business, we incorporated as a not-for-profit. It took a couple of years to get our tax status set by the IRS and the State of California. In the process, our name was changed to Free Model Foundry.

    For a couple of years, we wrote models at TRW and published them. But rather than the ground swell of models we expected to receive from other engineers, we started getting calls from IC companies asking if they could outsource their modeling to us.

    It took a while to find the best resources for contract modeling but eventually we did and now model outsourcing has become FMF’s business.

    Q: What have you learned about outsourcing? Any guidelines for what kinds of project should be outsourced and what shouldn’t?

    I have seen many outsourcing projects go well and a few turn into complete disasters. Differences have been in project scope and the definition of the project deliverables. In general, small, well defined projects are more likely to be successfully outsourced than large poorly defined ones. Communications also plays a roll. The bigger the project, the more important good communications become and the more often it must take place.

    I recommend a book titled “Global Software Development” by Dale Walter Karolak and published by the IEEE Computer Society. It covers all the basics in 158 pages.

    Q: You are involved in some EDA Open Source efforts. Can you talk about any that you find exciting?

    Other than FMF, my involvement with other Open Source EDA efforts is limited to cheerleader and occasionally facilitator. I host a monthly dinner which is attended by people interested in OSEDA.

    Q: How would you compare the impact of Open Source vs. Outsourcing on Electronic Design and EDA?

    EDA users are a small community. This makes open source less viable for EDA tools than in other areas such operating systems. There are only a few large open source EDA projects going on. I think all of them consist of a single person doing more than 90% of the work and a number of less committed people giving feedback. Smaller projects, such as a Verilog mode for Emacs, work fine.

    Projects that are easily outsourced are often also viable as open source projects if they benefit a large enough community. The two examples that come to mind are FMF and OpenCores. These are organized quite differently but they have similar benefits to the engineering community.

    Q: For your latest company, Epiphyte, can you talk a little bit about your plans for 2008?

    The new company is Epiphyte LLC. It is a platform for exploring various business opportunities. The expectation is that we will try many different things and fail (cheaply) at most of them. The stated purpose of Epiphyte LLC. is for the “rapid exploitation of emerging opportunities”. This roughly translates to “we don’t know what we’re going to do but, we have a lot of ideas”. Among the more likely opportunities are:

    1. Provide IT support for startups, small businesses and non-profits. We serve organizations that require less than one FTE.
    2. Provide outsourcing project management for small HW/SW projects. We advise clients on the suitability of the project, help finalize the specifications, find and contract with the performing engineers or organization, manage the communications between the customer and the performer. The trick is to know what can and cannot be successfully outsourced, how to specify the work, and manage the customer expectation. Of course, it also helps to know competent organizations that can do the work.
    3. Provide contractor management services to companies that desire to keep existing contractors beyond the one year limit HR departments set.

    Q: Epiphyte is also supporting “Venture Coding.” What is this and why you are offering it?

    We have created a new process to assist start up companies in getting off of the ground that we call “Venture Coding.” Early start up companies often face the dual problems of limited starting funds and the limited engagement (and interest) of short term developers. Venture Coding was conceived to solve both of these problems.

    In exchange for equity in a start up, Epiphyte will provide software development resources. This allows a company to preserve precious starting capital and to ensure the continued availability of developer commitment to the success of the start up.s

    First Office: Silicon Valley Business Incubators

    Written by Francis Adanza. Posted in First Office

    This is the first in a series of blog posts on where a start-up team might look for their first office. One of the first types of office space to consider would be space in a business incubator.

    A business incubator is comprised of multiple businesses operating independently within one location or under a membership group. The objective of the incubator is to help its businesses get started and grow. Incubators offer services that can help entrepreneurs overcome a wide range of obstacles by reducing startup costs with a shared system of support and resources. Most incubators offer shared office space, utilities, and services that create a unique environment for new businesses to grow. Incubators are known for helping startups lower overhead costs, create networking opportunities, and increase the chances of survival.

    Tenants in business incubators share overhead costs such as utilities, office equipment, IT support, conference rooms, laboratories, and receptionist services. Additionally, basic rent costs are usually below the normal market value for the area. Often, incubator managers and staff members provide insightful advice on a broad spectrum of issues including, business development, market research, strategy, and fund-raising. Jim Robbins, Director of the Environmental Business Cluster believes, “founders are surprised to learn that they can get startup services for no more than the cost of space, furnished units, strategic planning advice, and free common areas like conference rooms.”

    With the desire to create an entrepreneurial environment, some incubators host a variety of events that cater to both their internal members and external community. Plug and Play Tech Center, one Silicon Valleys largest incubators, is well known for hosting conferences and entrepreneurial events. Some of their past conferences and events include the TechDirt Greenhouse, ANZA Technology Conference, Web 2.0 Expo, and monthly workshops like the SVASE Startup-U and VC pitch sessions. As a frequent attendee of these conferences, I appreciate the opportunities to meet other entrepreneurs, keep in tune with new technologies, and learn from distinguished guest speakers.

    There are many factors involved in transforming an idea into a marketable product. Besides the significant technological challenges, building and operating a business is very complicated. The Small Business Administration reports that over 80 percent of businesses fail in their first five years. However, the National Business Incubation Association claims that 87 percent of businesses that graduate from an incubator program are still in business after five years. Since access to other startups, management professionals, executive mentors, and expert consultants are so readily available, it makes it easier for incubator tenants to fill gaps in their business.

    If you are considering a business incubator you should make sure that your firm’s focus is aligned with the incubator’s mission and then schedule an appointment with the director. Most incubators have initial requirements before incubation consideration. Some incubators are industry focused and only cater to certain segments like Biotech, Cleantech, Software, and Semiconductor. Like investors–and remember many of these organizations will ask for equity–directors want to meet with the entire management team and see several written plans like marketing, financial, and product roadmap. Evan Epstein, Chief Operating Officer (Silicon Valley) for the Girvan Institute of Technology says, “It helps to be referenced in from someone within our network.”

    GABA Panel on Communication Wrap Up

    Written by Sean Murphy. Posted in Blogging, Events, skmurphy

    I had mentioned that I was going to be on a panel at a GABA event on “Communications Today: Blogs, Email Etiquette and More” that was held tonight at SAP on Hillview Avenue in Palo Alto. It addressed a broad theme with four speakers (Jennifer Lankheim was a no show) from fairly different backgrounds in front of an intimate audience of about 35. E. J. Dieterle, the CEO of YES Partners was the moderator and he asked a couple of “show of hands” background questions of the audience. Most folks were consultants who found perhaps 50 new e-mails a day in their inbox. I handed out a hard copy of our new article Blogs & Wikis for Better Collaboration.

    It was funny that on a night where we focused on electronic communication each of the other three panelists also put a handout on the attendees chairs, the “paperless consultant” proved as mythical as the “paperless office” seems as distant (or as close) as it did in 1975 when Business Week was writing about “The Office of the Future” (remember that? they are still at it almost 30 year later, writing in 2004 about “Sneak Peeks at Tomorrow’s Office“).

    Because of the broad nature of the topic we never really got much of a conversation going. I stuck to my position that the best way for most people–especially consultants and very small firms–to think of a blog is just a better way to manage your website. Write about things that are of interest or use to your customers and prospects, include frequently asked questions since most folks will check your website before they call you, and pick a pace that you can continue on a sustained basis.

    Pierre Khawand, CEO of People-OnTheGo made the point that blogs are useful in larger firms and enterprises for internal communication [update Oct-10 he blogs in more detail on his "Less is More Blog."] But the problem that many folks seemed to be wrestling with was e-mail overload. One of the best articles on this remains Ole Eichorn’s “The Tyranny of E-mail” from 2003, which covers everything the panel could suggest (“don’t answer your e-mail as frequently, send shorter e-mails, pick up the phone if you find tempers rising or discussions moving in circles”) and more. I shared some of my challenges in E-mail overload back in November (and no, it hasn’t gotten any better and I haven’t gotten any smarter, except that it’s now clear I have to move off of Eudora since support has been completely discontinued…suggestions welcome, clues gratefully accepted).

    It was an enjoyable evening. My thanks for Jennifer Vessels of Next Step, for introducing me to E. J. Dieterle who then allowed me to take part, and to Caroline Raynaud, the President of GABA, for orchestrating an enjoyable evening.

    GABA Panel on Communication

    Written by Sean Murphy. Posted in Blogging, Events, skmurphy

    I will be a panelist for a GABA event on “Communications Today: Blogs, Email Etiquette and More” that will be held tomorrow night at SAP, Hillview Avenue, Palo Alto CA 94304; the event starts at 6:30 with networking–complimentary appetizers, beer, wine and soft drinks will be served–and the formal program at 7:30.

    Moderator: E.J.Dieterle, CEO, YES Partners (Inc.)

    Panelists:

    Agenda:

    • 6:30 – 7:30 pm Registration / Networking
    • 7:30 – 9:00 pm Program
    • 9:00 – 9:30 pm Networking / Reception

    My focus will be on the blogging issues. I hope to address at least some of the following:

    • What are blogs? What does the word mean and where did it come from? How new is blogging?
    • What does a blog have that a basic website doesn’t?
    • What is the “blogosphere”?
    • Why do small firms blog? What advantages does it offer them?
    • What’s the easy way for a small firm to get started blogging?
    • Why do large firms blog? What advantages does it offer them?
    • What are some examples of Fortune 500 firms with blogs?
    • Are there government blogs? Are there IT blogs? How many blogs are there?
    • Why does Google index new blog posts in minutes when it can take days or weeks for them to add my new webpage?
    • Are there special search engines for blogs?
    • What does the death of print magazines like InfoWorld and the shrinkage of magazines like Computerworld and EE Times mean for corporate blogs?
    • Computerworld published “Blogger Beware: The Legal Risks of Blogging” a list of ten allegedly worrisome issues related to blogs. What’s the difference between posting on your website and posting in a blog?

    I will also be handing out an article that Ann Marcus and I jointly authored this summer. I hope to see you there if you have questions about how to leverage a blog for your business.

    Triples, Inspired by Dorai Thodla

    Written by Sean Murphy. Posted in Blogging, skmurphy

    Inspired by Dorai Thodla’s “Triples and Congruence.

    • Budget, Quality, Time
      (project parameters aka “Iron triangle” pick any two, solve for third)
    • Expert/Technician, Manager, Entrepreneur
      (E-Myth roles in a business)
    • Beginning, Middle, End
      (elements of a story)
    • Early Adopters, Mainstream, Laggards
      (measures of risk aversion in a population)
    • Team, Technology, Traction
      (VC tests for quality of a business plan)
    • Men, Money, Machines
      (old business model formulation)
    • Financial, Intellectual, Social
      (three key forms of capital)

    Benefits of SaaS Business Model

    Written by Theresa Shafer. Posted in TwoWeekSaaS

    I had a chance to hear two VCs outline the benefits of SaaS as a business model at the CINACon 2007 conference a on September 22. While Francis and Sean manned the booth I attended the Visionary Session.

    First up was Ann Winblad, Co-founding Partner, Hummer Winblad Venture Partners.

    • Capital Efficient, allows for self-sustaining and reaching profitable as quickly as possible.
    • Predictable Revenue Stream

    Tim Wilson, General Partner, Partech International

    • Users of software cannot steal the software.

    At SKMurphy we’ve seen some other benefits from the SaaS model for startups

    • Higher Valuation
      With recurring revenues, steady monthly and predictable growth, a SaaS firm is able to demand higher valuations than a conventional on premises software startup. If you approach VCs with a scaling plan rather than a development funding plan, you can get a higher valuation.
    • Shorter Sales Cycles
      Here is data we find from our clients for B2B Sale Cycles

      • Pay-per-Use: 4-10 weeks
      • Subscription: 10-22 weeks
      • Time Based License: 28 weeks
      • Perpetual License: 40 weeks (assuming 3 year lifetime value of customer > $150K; caution: B2C may be very different).
    • Other Benefits for Your Customer
      • Lower Cost of Ownership (at least initially may end up higher as adoption/use proliferates)
      • Software Provider handles managing upgrades, bug releases and initial deployment setup.
      • Easy test drive, see that it works.
      • May be easy to switch to competitors, although data lock-in effects are subtle but real.

    SaaS business models are taking off: we use ones like Salesforce, WebEx, TypePad and Central Desktop everyday. The business models are proven and and gaining wide adoption. However they come with new issues. Issues like shorter release cycles, blurring of development team roles, and the management of customer feature requests and bugs when you control the infrastructure impact your customers, team and management controls.

    SKMurphy is hosting a SaaS Roundtable: Managing Rapid Release Cycles on Oct. 30, 2007.

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