Archive for January, 2009
January 14th, 2009
I attended the EDAC 2009 CEO forecast tonight and what follows are some quick impressions.
I got there just as the event started and the Lincoln High School String Quartet was playing one of the Brandenburg concertos, and playing it very well. Room J at the San Jose convention center has an 18′ high ceiling which gave the music an ethereal quality. I ran into Rick Carlson, who was one of the founders of EDAC–Dave Millman being his partner in crime, you would think you could learn that from the EDAC website–and someone I have done a lot of business with when I was on the “buy side” at various semiconductor and systems houses. I said to Rick, “Oh no, I’ve been in a fatal car crash and you must be one of the five people I meet in EDA Heaven.” It had been too long since I had seen him last and I always appreciate his informed perspective on the industry.
Update March 3: Slides, audio, and video are available at
http://www.edac.org/events09/ceoForecast/ceoSlides.jsp
January 13th, 2009
I attended CSPA’s “Looking Down the Money Trail” tonight at Pilsbury in Palo Alto. Pilsbury hosts a number of entrepreneur oriented events and tonight their room was overflowing. One reason was that the event had a stellar panel:
- Steve Bengston, Managing Director of Emerging Company Services (ECS), PricewaterhouseCoopers
- Prashant Shah, Managing Director, Hummer Winblad Venture Partners
- Ashmeet Sidana, General Partner, Foundation Capital
- John Steuart, Managing Director, Claremont Creek Ventures
- Gus Tai, General Partner, Trinity Ventures
Steve Bengston led off with are recap of the Q3/2008 PWC Moneytree results, so this was a retrospective in terms of the data that was presented. The top six most active firms (by deal count) in Q3 were Draper Fisher Jurvetson 26, Intel Capital 20, New Enterprise Associates 19, Kleiner Perkins 18, Sequoia 17, and U.S. Venture Partners 17. Silicon Valley investments totaled 2.77 billion dollars in Q3, down about 3% from Q3/07’s 2.88 billion and about 10% from Q2/08’s 3.11 billion. Silicon Valley accounted for about 40% of the total US VC investment across all three time periods.
Key comments from the panel caught my attention (all are paraphrased from my notes):
- John Steuart: healthcare consumes a significant and growing fraction of US GDP, we Claremont believe that enormous opportunities exist to build multiple large firms bringing Moore’s Law to medicine.
- Ashmeet Sudra, in response to a question about the role of government helping innovation and entrepreneurship: California’s ban on non-competes (except in the case of the sale of a business) has done more to take the shackles off of entrepreneurs than any other government action.
- Prashant Shah, in response to role of government question: government can make the long term investment in basic research that VC’s cannot. Basic research is the foundation for new technology entrepreneurship.
- Gus Tai (very paraphrased): I am interested in software & SaaS offerings that can be distributed at no charge or low cost to individuals but once it reaches a critical mass of five users in the enterprise can be priced at value. He cited Zone Labs as an example: they offered a free personal firewall that enterprises had to pay for, when they discovered five at the same IP address they contacted them and asked them to convert from free to paid.
Some consensus answers (echoed by more than one panel member).
- No B rounds right now (either they are re-priced / down rounds as a second A or there is clearly enough traction so that it can be priced as a C round).
- The credit crisis has caused some Limited Partners to pull back or withdraw from some commitments, making it much harder to close new funds and forcing some existing funds to re-open or add annexes.
- What’s hot? Anything with a “hard ROI” (clear cost savings attached) or attacking an existing cost stream that has paying customers.
- K12 education is another area that government plays a critical role in laying the foundation for innovation and entrepreneurship.
- The first 25-50 million in revenue can proceed from a very narrow observation of what can drive revenue in a niche. Domain expertise and intimacy with a problem make all of the difference early on, later you need experience building a large company. There are two points in the Gartner hype cycle when that narrow observation has the most value (because of the highest risk of being wrong) before the technology trigger brings the market into existence and in the “trough of disillusionment when no one is sure when the real market will materialize.
Note: Gartner Hype Cycle image by Jeremy Kemp, used
under Creative Commons Attribution Share Alike License
January 12th, 2009
One of the things that we always review with founders is their LinkedIn profile. It’s important for a several reasons:
- Prospects will check it either before they contact you or as they are doing more background checking on your company.
- The testimonials that are posted there have authenticated authorship and should also be posted on your website.
- It’s a convenient mechanism for reconnecting with old co-workers and other folks you have had prior shared success with.
MB Deans is offering a good three part workshop on this Thursday January 15 at the Courtyard Marriott in Los Altos (4320 El Camino Real, Los Altos, CA 94022) for job seekers that will also be useful for bootstrappers:
- LinkedIn and Beyond: Building Your Job Hunt Strategy with LinkedIn and Facebook
- Blockbuster Profiles: Write One That Will Have Recruiters Calling You
- I’m on LinkedIn: Now What? Get the Next Steps to Success
If that time or location is not convenient she is offering three more later this month:
January 8th, 2009
I attended a workshop put on by CPSquare in 2003 on Communities of Practice that had a profound impact on my worldview. I met folks from around the US who helped to foster communities of practice in corporate, education, government, and non-profit settings and was surprised at how common the both the challenges and methodologies for overcoming them were.
I had a chance to spend a day with Doug Engelbart, we ended up sitting at the same table and did a number of small group activities together. His concept of bootstrapping as an improvement of an improvement activity was an inspiration for our Bootstrapper Breakfasts, an effort to harness the collective IQ of a group of entrepreneurs who are each trying to get better to assist one another in getting better faster. Doug also demonstrated a version of his Open Hyperdocument System that has given me a model to aim for as we continue to improve the infrastructure for the delivery of our services: individual consulting, workshops, partner coordination, and collaboration as a part of the startup team to reach a working consensus on both strategy and the supporting materials to execute them.
I decided to take part in CPSquare workshop that just started yesterday, and I would encourage anyone who is interested in learning more about wikis and other modes of on-line and face to face collaboration to consider joining. It’s going to run for the next few weeks, blending conference calls with on-line forum interaction and a number of very interesting case studies. I have been asked to present some cases on how we leverage a number of on-line tools, wikis in particular, but I am only one of many folks detailing their practice.
We had a very good conference call to kick things off yesterday and I thought I would blog and encourage entrepreneurs who want to get better at combining a number of different modes of collaboration, both on-line and face to face, to sign up. It’s that good. The calls are taped and you will have access to the on-line examples so you haven’t missed very much at all if you sign up now. You can register here: http://cpsquare.org/conferences/
The benefits: if you don’t learn how to be more effective in on-line collaboration, including techniques for global teams, and how to blend on-line and face to face collaboration to improve the quality of team meetings and decisions, then you are not paying attention. Our clients, while they are still primarily Silicon Valley firms, now include teams in Denmark, China, Australia, Sweden, India, and England. And watching how this international group has coordinated on this workshop has given me a number of new tools and techniques to improve how we work at a distance.
It’s not my workshop so I am not bragging about anything you will learn from me, but it’s a diverse and creative group of folks who are pushing the state of the art in collaboration. It includes Ward Cunningham who invented wikis and Etienne Wenger who helped to formalize the concept of a community of practice, a well as many other less famous but equally insightful folks.
SaaS, wikis, blogs are all more than a decade old: I think the next ten years may be as much about enhancing our understanding of how to leverage what’s already been invented as it is to invent new things. This will offer you an opportunity to start thinking hard about what that might entail in the way that you organize your work and your team.
January 7th, 2009
This is part one of Anthony Scampavia’s interview with Ivaylo Lenkov, CEO and Software Architect at SiteKreator. Lenkov explains his team’s technique for doing daily releases. Look for part 2 on “Feature Management in a SaaS World” next month.
Anthony Scampavia: Will you provide a brief overview of your company SiteKreator?
Ivaylo Lenkov: We started SiteKreator in 2002 for business owners with no knowledge of programming or web design to be able to build and modify their own websites. Recently we introduced the first SaaS platform for creating custom web designs without coding. We work with many designers who use a private-labeled version of SiteKreator to deliver complete web solutions to their clients. Our technology powers more than 100,000 business sites and we operate from 10 global data centers with hundreds of servers.
Scampavia: What made you re-evaluate your release cycle and abandon traditional software development release cycles?
Lenkov: When we started SiteKreator, our release cycle was almost a year. We were spending more than half of that time in stabilizing and polishing the release, because there have been hundreds of new features. During that time our customers weren’t able to see anything new and by the time we finally released the new version, many of the cool new features were no longer cool and some were not even needed. The web is a very dynamic space and the annual release cycle was limiting our ability to be ahead of the curve and to deliver innovative solutions to our customers. We started looking for ways to shorten our release cycle, by reducing the features going into each release. We first tried a three-month release cycle, then one-month, then one-week and we ended up with daily releases.
Scampavia: So how you accommodate long-term project planning while doing daily releases?
Lenkov: Well, that’s not easy. When you are focused on a very small feature-set, you sometimes lose the big picture. You just can’t see the forest from the trees. We had to change our planning process. We still maintain a product roadmap with milestones and everything but we chop each milestone into many small releases. This way every day we have a working product. We also review our priorities every couple of weeks and adjust them as needed.
Scampavia: How you actually do these daily releases?
Lenkov: Our team is distributed between two locations: one in California and another one in Bulgaria. This has many cons and few pros, one of them being that we can work in two shifts using the so called “follow the sun” model. Our engineers in Bulgaria finish the coding for the daily release around 11am PST and deploy on several staging servers. Then our product managers, marketers and usability experts based in California review the release and file their comments in our defect tracking system. After 11pm PST our engineers in Bulgaria come to work, fix the reported problems, if any, and push the release to the production servers worldwide. Sometimes we may skip a release if we need a little more time to fix something, but this does not happen very often. When you make small changes, it’s hard to break something big.
Scampavia: How do you ensure the stability of the release?
Lenkov: The daily deploy model would not be possible without a large-scale automated testing. We run a big farm of screen-capturing and comparing servers. We basically compare thousands of sites before and after the deploy on our staging servers. This takes few hours as we capture all possible browsers, both on Mac and PC, and in many screen resolutions.
Scampavia: Visually. So, you are doing just a Pitman comparison really.
Lenkov: Yes, but on a very large scale. The rule of thumb is that by doubling the number of sites we compare, the probability of catching new problems increases by one percent. But every increase in the number of sites also increases the number of false positives that has to be manually reviewed. So we tweaked our comparison algorithms to be more tolerant towards small differences in the screenshots. We still do human review of some screenshots that do not match, but at least it’s manageable.
Scampavia: What happens when you find a problem after the software has been deployed on the official servers?
Lenkov: This does not happen that often, but if needed, we have a single button roll-back to the last stable version. It takes about 2-3 min and it rollbacks all datacenters. But we use this for only really critical problems. For non-critical or cosmetic issue, we just fix the problem with the next deploy. That’s the advantage of having a daily release cycle.
Scampavia: How do you handle larger features that cannot be implemented in a day?
Lenkov: We implement the larger new features as modules, which are initially in stealth mode. We enable these modules only for specific users, so they can be tested. Of course we start by eating our own dog food. Then we enable the new features for users who have signed up as beta testers, as well as for our reseller partners. Once we feel confident with the stability of the new features, we begin bucket testing with real users. We start with a very small bucket (usually top 100 most active users), while keeping a finger on the Off button. Then we expand the bucket few times and at the end we enable all users. After a few weeks of running everyone on the new modules, we decommission the old modules.
There are two potential complications from this approach:
- If there are differences in the interfaces between the old and the new module, we need to create some throw-away glue code that “talks” to both interfaces.
- If there are backward incompatible changes in the database schema, we usually need to add a wrapper on the database level.
Of course this approach could not be possible without having tens of thousands of users using the software on a daily basis. Even if we miss a defect or a use-case, it always pops up during the bucket testing.
Scampavia: What do you use for version control?
Lenkov: Subversion in combination with Trac.
Scampavia: You have been doing one-day release cycles for two or three years now. Has it been worth it?
Lenkov: Initially, I thought it would be very inefficient but it turned out that shortening the release cycle resulted in reducing the time we spend on bug fixes, stabilizing the release from 50% to about 20%. Also, now we can introduce new features in a matter of days, while before it was taking months even a year for the smallest new feature to become publicly available. Our users very much appreciate that. In the SaaS world, the ability to show something new every day helps a lot in building a loyal customer base.
Scampavia: I want to thank you for your time and your thoughts. This is valuable to the SaaS world for people to realize that there is information they should at least think about for their methodology. You have put in much thought in this through the years. I will say that not all SaaS companies have done that. My experience is many companies are too busy to get to the market and do not consider the method. If they do not have the stability and methodology in place, things start to tear apart.
Lenkov: Thank you for having me. I am happy to share our experience and hopefully it will be useful to other SaaS vendors.
Scampavia: Lenkov, thanks for your time.
January 5th, 2009
- Focus on establishing your team as trustworthy and dependable. The biggest question in a prospect’s mind is how your team will you perform when things go wrong.
- Stress earlier engagements with the problem you help your customers solve. Make this “phase two” of efforts to solve these problems, building on earlier relevant experience and accomplishments. Early customers want to know that you have an affinity for the problem domain.
- Don’t stress how smart they are or how many merit badges your team has accumulated (e.g. degrees and certificates) or your collective years of experience the team has–what does it mean when a team has collectively 60 year of experience, much less than you might think. Focus on projects that you have delivered and value they have created for former partners, customers, etc..
- If you have a backgrounder or presentation that is being used to raise investment–e.g a fund-raising pitch–don’t start from it as a basis for your prospect oriented backgrounder. Investors and prospects are two fundamentally different audiences with very different needs and distinct questions about your team and your offering.
- Keep it to between one and two pages: put it on your website and print it double-sided if it runs over one page when you include it in proposals or as part of a leave-behind package from a demo or presentation.
January 4th, 2009
Francis Adanza worked for us in a project management role for the better part of two years before taking a business development role with Global West Communications. He was back in the Bay Area last week and attended last Friday’s Bootstrappers Breakfast and we had a chance to catch up. He sent me a short e-mail on his perspective on “entrepreneurial roller coaster” afterward. It’s a topic I have blogged about in “We Don’t Encourage Individuals to Form a Startup” and “Hugh Macleod’s Thoughts on Being an Entrepreneur 2” but I think Francis has done a better job of explaining it and with his permission I reprint it below:
The funnest yet scariest part about riding a roller coaster for the first time is the unknown knowns. You know there are going to be highs and lows, but you don’t know when they will occur. You know there will be twists, turns, even sporadic upside down thrills, but its hard to forecast them. Sometimes the adventure seems fast, and sometimes it seems long, dragging on forever.
Regardless of how scary the ride may be, we all have choices that can alter the experience. Some people keep their eyes closed the entire ride, trying to mitigate their fears. Others dare to keep their eyes open, embracing each turn of events. Some folks find reassurance and control by holding on to the safety bars. While others fly by the seat of their pants, hands waving free in the air.
At times the ride becomes so frightening, you wonder why you even got on. It doesn’t matter how much you yell or scream, all you can do is wait until it ends. Although you might walk away a little shook up with a few scratches and bruises, you know in your heart that you had the guts to give it a try.
January 3rd, 2009
Paul Lippe is CEO of Legal OnRamp, a community of practice website for lawyers. He did a guest post on the AmLaw Daily Blog “Welcome to the Future: Leadership, Accountability, and Swimwear” that I enjoyed, in particular his observations on accountability were worth bearing in mind in 2009:
Legal OnRamp strives to simplify innovation and value delivery, primarily for in=house lawyers but also for law firms, both by providing tools to innovate and by sharing examples of success.
We have 7,000 members, probably 3,000 of whom have contributed content or otherwise added value. Perhaps 1,000 have contributed ideas on how to make our service better. Ninety nine percent of the good ideas and 99.9 percent of the work have come from someone other than me. More than 400 law firms and more than 700 companies are participating.
There are at least 100 things that need to go right; there are 200 things that could go wrong. When we started, 80 percent of lawyers thought we were nuts; 14 months later, 80 percent of lawyers think we’re the future. I “control,” in a formal sense, very little of this.
Still, if Legal OnRamp fails, it’s my fault.
There are no words we love to hear more than “it’s not your fault.” Whether from our mother, our friend, our cleric, or our consultant, when something goes wrong, we cherish absolution.
So let’s be clear: if you are running a law firm and it fails, it’s your fault.
The balance of the article is worth reading, he addresses the need to plan for a more competitive environment in 2009. Although his intended audience is managing partners at law firms it’s very applicable to software and consulting firms as well.
January 2nd, 2009
It is that time a year again. Where we look at what we did and what do we want to get done next year.
A couple of key things we gone done this year:
- Refine Business Dashboard
- Develop speaker page with audio for our website
- Expanded our network of consultant to off-load support activities
- Developed “Engineering Your Sales Process” workshop
- Added 3 new partners: Athol Foden, Steve Moore, and Pete Tormey
- Added third Bootstrappers Breakfast in Milpitas at the Omega Restaurant
- Grew mailing list by 64%
- Completed our second workbook “Getting More Customers”
Some areas where we fell short:
- Develop Startup Stages Idea – we make a good start for this, but fell short of where we want to take this. Stay tuned for more.
- “First Office” series. This will move to 2009 Goals.
- Looking back over our business dashboard. We have a couple things we need to improve
- Followup after a talk or other event
- Quote more work
- Give more talks
Here’s Jerry Kaplan’s “Five Biggest Mistakes That Entrepreneurs Make” at Stanford’s Entrepreneurial Thought Leader Speaker Series. It an interesting talk with good points about our goals. Summary:
- Unclear goals.
- Trying to prove that you’re smart (ego gratification) vs. building a team and building a company.
- Too much focus on control instead of creating value.
- Hiring a friend vs. best person for the job: hiring folks you like vs. folks you need.
- Lack of succession plan (hanging on too long): you have to let go of your children once they are grown, you have to let go of your startup when it’s grown beyond your capabilities.
January 1st, 2009
Believe me when I say that we have a difficult time ahead of us.
But if we are to be prepared for it, we must first shed our fear of it.
I stand before you now, truthfully, unafraid.
Because I believe something you do not?
No!
I stand here because I remember.
I remember that I am here not because the path that lies before me,
but because of the path that lies behind me.
An excerpt from Morpheus’ speech to the citizens of Zion in the film “The Matrix Reloaded” (hat tip to Fabius Maximus who opened his post “An Important Thing to Remember as We Start a New Year” with it.
2008 was one of the worst years from an economic perspective: the S&P 500 dropped 38.5% (vs. 38.6% in 1937) and the DJIA dropped 33.8% (its worst annual decline since 52.7% loss in 1931). 2009 may see the bankruptcy of major automobile manufactures, newspapers, and perhaps many more financial institutions. This is the global backdrop; our Silicon Valley perspective doesn’t appear as grim as the 25% job loss after the dotcom crash, so we have seen worse in recent memory, at least locally.
I spent last week reading Mark Zimmerman’s Journal, which he keeps on-line as a wiki and spells zhurnal. He has serialized the entries by date of creation starting here: http://zhurnaly.com/zhurnal01.html I recommend it wholeheartedly for entrepreneurs even though it’s written by a physicist with a Zen frame of mind who has taken up marathon running in his 50’s. He is thoroughly committed to mindfulness and self-improvement, two goals any entrepreneur should strive for.
I thought I would stir in some excerpts from his “Headlights and Decisions” entry as they bear on our ability to take action in spite of limited information. Who knows how 2009 will actually turn out? We can’t know until the year is over but today January 1st has been fired at us point blank. :
E. L. Doctorow once said that “writing a novel is like driving a car at night. You can see only as far as your headlights, but you can make the whole trip that way.” You don’t have to see where you’re going, you don’t have to see your destination or everything you will pass along the way. You just have to see two or three feet ahead of you. This is right up there with the best advice about writing, or life, I have ever heard.
from Bird By Bird by Anne Lamott
Zimmerman likes the sentiments (as do I) but observes:
- It helps tactical decision making to have a strategic viewpoint — a large-scale map of the situation, so that the right local battles can be fought to lead toward global victory.
- In writing, it helps to have an outline (or at least a general vision) of the final product.
- Today’s actions must be guided by immediate conditions in the light of the larger context.
- Refusing to decide is a decision; deciding prematurely is also a decision. Wisdom lies in balancing the two.
In February of this year I wrote “Burn Your Boats But Not Your Bridges” and made a couple of points that are probably revisiting
- Committing to a mission enables us to see possibilities for further action.
- A decision is an irrevocable commitment of resources: the lesson from the OODA loop is that this can be through indecision and delay as much as in the affirmative.
- “Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it.” from W. H. Murray’s popularization of John Anisters free form translation of Faust.
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