Posts filed under 'Scaling Up Stage'
March 11th, 2010
I met Matt Perez in 2003 just as I was starting SKMurphy. It was the tail end of nuclear winter in Silicon Valley and folks were trying to figure out what was next. We kept running into one another at various networking events and as we got to know one another realized that we both had a passion for technology and innovation.
After I facilitated the Conversation Central roundtables on “Global Teams” at the 2009 Design Automation Conference I decided that a significant shift was underway where not only were teams in larger firms more often global but startups and small technology firms were going global much earlier in their life cycle than had been the case in the 1990’s. One of the enablers for this is a host of low cost collaboration tools. Some that are synchronous like Skype and real time dashboards, and others that are “quasi-synchronous” like wikis, distributed source code management and Yammer. These tools enable faster decision making because the team is able to maintain a “shared situational awareness.”
After a lunch with Matt in December where we had discussed this trend he agreed to share some of the ways that his firm, Nearsoft, was using Yammer and other collaboration tools to enable them to keep distributed teams providing development services and ongoing support in sync.
Q: Can talk you a little bit about what your firm does? I understand that your focused is on outsourced product development.
Nearsoft is a software product development firm with operations in Mexico. We work best as innovation partner to ISVs, SaaS companies and consumer-facing sites. These businesses understand that software is at the core of their business and they demand to work with people who are as dedicated and serious as they are about building great software.
We specifically avoid working with businesses that treat their software as a “backroom” operation or, worse, as a necessary evil.
Q: How do you work with clients?
We work in long-term relationships with our clients. We create teams around each client, with the right skills in the appropriate technologies. As the new team learns about the client’s business, they can contribute to all aspects of it, not just the raw coding.
Short-term, project-based engagements don’t work for us and I don’t believe they work for clients, either. It may work for doing something of the side, some throw-away code. But for the core product, you want to have a stable team of people that work well together.
We invest heavily in hiring the best and brightest and have created an environment that helps attract and retain that level of talent. A big part of that is because of the opportunity to work with leading-edge companies in the Valley as part of their core team. If we had people work on little projects here and there, we would not get the good ones; or, if we got them, they would not stick around for long.
Q: What collaboration tools do you use internally and with clients to support your methodology and your engagement model?
A: The first that comes to mind is Yammer, a Twitter-like system but for private use. Our folks are used to Twitter, so using Yammer was a natural. It works great for geographically distributed teams because it helps maintain a team presence.
In the situation where everybody in a team works out of the same office, team presence is a function of being physically in the office at the same time. Without consciously checking, you know when people are “there” and when they’re not. Yammer serves a similar function in that even if I am not reading each posting individually, I get a sense of people being “there” as the stream flows through.
It’s also a casual environment where people can jump in and out without much protocol. If I am looking for somebody, I can just ask “anybody seen Joe?” and one or more people will respond. Also, if people are joking around a particular event, you can also jump in and do the water cooler thing that’s part of social cohesion of effective groups.
Besides Yammer, we use Skype a lot. For example, a group of us keep a Skype “group chat” open all the time that we use a lot like Yammer. The reason we do it on Skype is that it’s easier to switch to voice conferencing when the text chats get too convoluted.
One of our client teams uses video all the time. They use both Skype and Adobe Connect.
Of course, we also use a number of tools to keep track of open issues, source code control, etc.
Q: What has been the impact of Yammer on your ability to deliver results?
Yammer and Skype and the rest of these real-time tools give us and our clients the benefit of being in touch constantly. Little problems and misunderstanding remain “little,” they don’t snowball into big, hairy messes. One person may say, “I am going to implement X using Y” and immediately another will jump in with “No, you shouldn’t use Y for reason Z.” They may go back and forth in the text stream, clarifying things. Then switch to voice or video. Misunderstanding is cleared before any major work is wasted building the wrong solution.
Without something as immediate as Yammer or IM tools, the question may sit in somebody’s email for a day before anybody looks at it. By then, the wrong solution may be finished only to be thrown away.
BTW, that is true for the folks working physically in the same office. In many ways, it is more convenient to casually ask a question or make a comment using one of the tools than in person. You can ask your question without “imposing” on the other people to drop what they’re doing to answer your question. The other people can choose when to respond. If they glance at it and see a “Google It” question, then they can just ignore it. If it looks important, then they can direct their attention to it at their convenience.
Q: What, if anything would you do differently?
When I started the company I tried several models before settling on the way we operate today. It would have been nice if somehow I could have gone through that part of it a bit more quickly.
We’ve had a couple of startup clients that didn’t make through the crisis in 2009. I thought they were dynamite businesses and wished they could have been able to stay in business. We helped all we could but in the end they didn’t make it.
Q: What else have you learned from working internally and with customers in this fashion?
The most salient thing for me is that cultural alignment is key. Effective communications include a ton of stuff that’s never said; it literally goes without saying. There’s a lot of “y’know what I mean?” in there and it would be too costly, emotionally and in time, to explain every little subtlety that goes on in a conversation. Likewise, it can very expensive when people miss out any of those subtleties. To deal with this you need to make sure that everybody in the team is aligned with the goals of the business and that they “know” what it takes to get there.
One example I can think of is when a developer is asked when he can get something “done.” If we both don’t have the same understanding of what “done” means, then we are going to end up in hot water.
Q: Thanks for your time
For some outstanding examples of how to blend humor into an explanation of a complex service I would encourage you to take a look at two of Nearsoft’s videos:
I really appreciate Matt’s willingness to talk about some of the practical challenges in working in a geographically distributed organization. If you would like to talk about lessons learned from your startup or innovative business practices that you would be willing to talk candidly about, please contact me and we can explore an interview that would be of interest to bootstrapping entrepreneurs.
February 2nd, 2010
Literature is mostly about having sex, and not much about having babies; life is the other way round.
David Lodge
Startup pundits have focused primarily on funding events and product launches, and not much about how viable the business model and scale up strategy are. Successful businesses are the other way around.
Jeff Nolan wrote in January 2009 about “Why the TechCrunch Economy Will Falter” noting (bold in original):
“…a fundamental flaw in the startup economy promoted by a wide swath of pundits and proponents, that starting is more important than sustaining.”
Martin Edic in the comments noted that
The other half of this situation is the ‘pundit’ sites lack of aggressively asking companies exactly how they are going to make money. Endless coverage of start-ups that are more about a gimmick, reiteration of an original technology or an imitation of something else, without questioning the viability of the business model, helps create an environment where typically young entrepreneurs scoff at the need for revenue. When we hit a downturn like this and funds dry up, they are going to fold.
The good news it that most serial entrepreneurs fail at least once and return as much more knowledgeable and pragmatic business owners. So covering failure has its purpose.
It’s taken a little more than a year but Dave McClure notes yesterday in “Subscriptions Are The New Black”
We have largely WASTED an entire web decade of time, energy & venture capital on extremely inefficient revenue models. There have been a few interesting examples of startups acquired in the 00’s for large amounts due to amazing growth (eGroups, MySpace, Skype, YouTube) or advertising potential (aQuantive, DoubleClick, AdMob, RightMedia). However, mostly the decade has been an uninterrupted string of uninspiring business models and small-time acquisitions of Web 2.0 startups filled with rainbows & unicorns, rather than those based on simple, transactional revenue models.
and he posits two key assertions related to startup business models:
- The default startup business model from 2000-2009 was based on growth (aka acquisition) and CPM- or CPC-advertising
- The default startup business model for 2010 & beyond will be subscriptions and transactions (e-commerce, digital goods).
What does this mean for the average bootstrapping entrepreneur?
- More competition as fewer teams bet on “build it and they will come” models and start competing to deliver services that firms or individuals will pay for today.
- Perhaps less derision when they tell other startup entrepreneurs that they plan to charge right away.
- Craig Newmark’s answer “Our history is slow, continuous growth. In the race between tortoise and hare, well, we’re the slow guy” to “How Craigslist Spread” is worth keeping as your screen saver quote.
Related posts
October 11th, 2009
Jason Calacanis has gone a little bit off the dial on “why startups shouldn’t have to pay to pitch angel investors” but he is nonetheless correct that you should not pay large fees to potential investors for consideration or the right to present.
Our focus is helping bootstrapping technology startups but we do get startups at the Bootstrappers Breakfast who ask whether they should “pay to play” as well as those that have. I have yet to meet anyone in a startup who was happy with the outcome after paying a large fee to present. And by large I mean more than $100. There are a number of pitch preparation groups in Silicon Valley (e.g. VC Task Force, SDForum VC Funding SIG, SVB Competition, Under the Radar, Launch Silicon Valley) that are worth exploring before you write a large check to an Angel group in hopes of getting a larger check back.
The Angel Capital Association issued some guidelines in 2008 you should bear in mind (bolding added to body of text):
ACA Guidelines on Charging Entrepreneurs Fees for Applications and Presentations
In 2008, ACA recommends that angel groups charge entrepreneurs no more than nominal fees for applying for and/or making presentations for angel capital and that all fees are fully disclosed, ideally appearing on the group’s Web site. The fees should be no more than a few hundred dollars for applications and no more than $500 for presentations. Transparency to entrepreneurs is of utmost importance, so full information about fee amounts and what the fees are for should be included on the group’s home page and/or other prominent portions of the site and other important promotional materials. Angel groups should also provide a consistent program of high quality coaching, preparation and feedback to entrepreneurs participating in screening and presentation activities.
These guidelines match the practices of the great majority of ACA member groups, based on a 2008 survey. About two-thirds of responding members charge no application or presentation fees, and the other third mostly charged nominal fees. [...]
ACA is an inclusive association that welcomes membership from any angel organization meeting the application criteria, but it does not endorse the practices of any group that levies large fees and/or does not forthrightly explain its potential fees to the entrepreneurial community.
Let me give an example from a Silicon Valley Angel group that I am familiar with: The Angels’ Forum. Here is what they say on their FAQ page for how they are different (bold added):
- We are a small, stable and committed investor group with long history of investing together and low turnover. TAF only has 1-2 openings per year for new angels members.
- All of our deals are reviewed and the due diligence is carried out by the angel investors, not by consultants looking for business opportunities.
- Investments are always made via a single investing LLC. This not only simplifies the entrepreneurs’ process but also protects our investing members’ privacy. The aforementioned TAF LLC will often lead the A round and be instrumental in bringing in venture coinvestors.
- Entrepreneurs are not charged any fees to present, we don’t have “success” fees or any other fees for that matter.
- TAF only invests in Northern California headquartered companies in order to devote sufficient attention and resources to the management and encourage their success.
Sometimes engineers feel that it would be more efficient just to get all of the possible investors in one room, make a single presentation, and get an answer right away. It’s somewhat similar to the challenge of finding early customers, the presentations are entirely different and the negotiation dynamics are different, but the process of improving your presentation is very similar. In fact someone asked this question on a mailing list I am on:
Ask yourself which is better:
Scenario A): Spend 2 weeks preparing biz plan/ppt/talk and $3,000 to present to 40-50 angels
Scenario B): Spend 20 weeks and $1,000 (coffee/lunch/gas/printing) and talk 1:1 with 20-30 angels
If you get feedback from each (or most) of the 20-30 angels on an individual basis that you use to improve your plan and your presentation then the 20 weeks is well spent. It’s not clear from your hypothetical situation whether you are able to make progress on your business in the absence of funding, but assuming that you can taking a retail approach (selling one by one vs. “wholesale” trying to sell all of them at once) allows you to improve your presentation and increases your odds for success substantially.
Look at it another way, let’s say that there were still two or three things missing/wrong from your presentation to the group of 40 Angels, what are your chances of being able to approach them again once they have heard you once. What are the odds that you will get feedback from more than a handful of them in a group setting? Talking to 40 at once seems more efficient of your time but it has a much lower chance of success than 20 or 30 sequential presentations–providing you take the time to get feedback and improve your presentation as you go, if you give the same presentation to the 20th as you gave the first you are wasting your time and the time of your potential investors.
Update Mon-Oct-12: following up on a comment left by Benjamin Kuo on an earlier post by Jason I came across two good posts by Joe Platnick of the Pasadena Angels, (I have highlighted some key quotes from each).
- “Angel Investors – Do They Charge Fees?“
- “The best Angels make money the old fashioned way—working with entrepreneurs to generate investment returns upon exit“
- “Some reputable Angel organizations charge a nominal fee (~$50-100) to submit a funding application. The intent here is not to use this as a money making opportunity, but to provide a filter or sincerity test for the entrepreneur and to reduce the number of poor and incomplete business plans (aka junk) that get submitted.”
- “Friday Random Ramblings“
- “These pay-for-play scams remind me of the “modeling agencies” that charge people for representation, acting lessons and to have their headshots done.”
- “Beware of for-profit angel groups based on a franchise model–as those are typically the ones that charge companies. If they don’t make money the old fashioned way and exclusively through investment returns, then they aren’t worth talking to.“
Brad Feld, a VC with the Foundry Group, weighed in on this topic August 24, 2009 with “An Angel Investor Group Move That Makes Me Vomit” offering some key points to consider”
- “I’ve personally made around 75 angel investments during two periods of time – 1994 – 1997 and 2006 – 2007.” [For details read the full post].
- “I give you this background so that my statement below has some credibility. I think it is grotesque that an organized angel investor group would charge an entrepreneur to present to their members. “
- And many of the members of organized angel groups aren’t actually angel investors. I’d like to suggest that to “qualify” as an angel investor, you have to have made at least one equity investment of at least $25,000 in the past 12 months. If you haven’t done this, you can’t call yourself an angel investor.
Update Tue-Oct-13: Jason Calacanis has posted a follow-up in “and now for some smoking guns (or part two of angels that charge)” that has a number of sourced comments on the problem. Worth reading, it’s written in a more temperate voice.
Update Tue-Oct-20: Bob Crimmins left some very insightful comments on a Keiretsu Forum member’s website; here are some key excerpts but the whole set of his comments are worth reading:
“While I don’t fully understand the inner workings of Keiretsu, what I think I have learned thus far is 40%- 50% (huge numbers) of the startups that pay significant fees to Keiretsu get no funding.”
“In fact, I believe that Keiretsu’s incentives would be more properly aligned if they did have a stake in the outcome of the startups they represent. As it is, they have no incentive to ensure that every startup they put in front of their cadre of investors has a better chance than a coin flip of getting funded. [..] For example, Keiretsu could only take fees from startups who actually get funding, i.e., a success fee.”
“I would support a pay for performance model where the angel aggregator group only gets paid if they are successful in making a good match between their investors and the companies they charge fees to–no funding, no fees. Charging, say, a 2% – 4% success fee is utterly reasonable and in this scenario, the angel group has it’s incentives aligned with the startups and the investors, i.e., to make successful matches between entrepreneurs and investors.”
Update Tue-Oct-20 (more): Deborah Gage at PE Hub reports that “Keiretsu Forum to Drop Fees For Early Stage Startups” part of their Keiretsu Forum Thread.
Williams said the change is not a response to the recent attacks on the fees launched by investor Jason Calacanis [...] but have been in the works for several months. Keiretsu also has no plans to drop fees for other entrepreneurs.
October 1st, 2009
This week I have been developing content for a client’s website. We are helping them formulate a message that is intended to explain both their knowledge of their customers’ problems and how they are able to help.
Good marketing is really just good content.
It focuses on your customers’ problems and how they will benefit from your offering. It is not about your product features. It answers all of the questions–or at least all of the common questions–a customer will have they have as they consider buying your product or services.
Good marketing material should be useful, interesting, and even funny to your customers. Material should be clear and concise, it should be use the language that your customers normally use to talk about their challenges and their needs.
Here are a couple of examples we have worked with our clients on over the last year:
July 10th, 2009
Abishek Desai wrote an interesting post in April of 2008 “What Happens With People Having No Aim?” that I commented on (it appears that he has changed blogging systems and lost comments from his older posts) and I came across my answer and thought it would make a nice short blog post.
First Mr. Desai’s question
Right now my company has around 50 people on roll. We are doing development in various technologies like .NET, PHP, Facebook Applications etc. We do really interesting development which is good for company and developers.
Now for some reason we thought that our company needs some more structured technical growth and for that we need to scrap one of the holidays in month people enjoy. Right now first and third saturday are holiday here. For training we have to scrap first saturday so that we can get full day for training and at the end we can have monthly event (We do fun event once a month). The moment we announced this there was outburst in the company about scraping one holiday.
People were obviously not happy with the decision which was expected but there was something which was more disappointing. I found that most of them don’t know what they want to do in life. They think that life will just go on like this coding, developing, testing etc. Nobody wanted to be the best in whatever they are doing. They wanted to enjoy the holiday they get just like any other unambitious person.
Please note that I am not criticizing my own team. We have a very strong and dedicated team who are good in whatever they are doing and I really love my team but there is always room for improvement i.e. to become the best. Lack of this quality makes any person so lifeless, at least to me.
This kept me wondering what happens to people having no aim in life ? do they really do something important in life ? or they are just like people wandering around in zombie movies ? I love my team probably that is why I am more disappointed.
Please correct me if I am wrong somewhere, I am sure I am wrong somewhere but I am not able to find it. Regards, Abhishek
I thought this nicely captured the tension between founders/owners whose life is the company and employees, who although they be quite dedicated, have competing priorities. My answer:
No one wishes they spent more time at the office on their deathbed.
There are many kinds of excellence and accomplishment, not all of them are work related. With 50 people in the firm surely not everyone has the same stake in success as you do. Also, there are limits to how much you can improve in a given period of time. Rest, relaxation, meditation, play, time with friends and family, volunteering, arts and crafts, reading, and many other activities are required to make a well rounded person.
Your employees may have aims that are very different than yours. It seems a little aggressive to take more of their free time, especially without offering them an option to not attend or paying them more.
If they are not requesting the training I would be suspicious of imposing mandatory Saturday training sessions. If I were in your shoes I would ask folks individually and in small groups what’s holding the firm back, it could be many things that you could fix unrelated to having them work more hours.
See also
June 27th, 2009
We invest a lot of effort in finding partners and maintaining partner relationships. We do this for a variety of reasons.
One of the advantages to working in a large firm is that there are normally resources and expertise you can call on when confronted with a challenge. There are typically other specialists who have your same job you can compare notes with; there are other managers who can offer perspective on management challenges.
As a solo entrepreneur or member of a small team the limits of your perspective and capabilities can keep you from excellence in ways that may not even realize. I tell people that when I was at Cisco I was held back by the people around me, now I am held back by my own limitations. If only–I used to think to myself–I could be in my own company I wouldn’t have all of these bureaucratic hold ups and delays.
We value our partners because they bring perspective, skills, and expertise that we lack. We can’t do everything, and in fact it’s taken a while to realize that there is an important difference between tasks that you can comprehend and those that you can execute with distinction. You have to pick a few domains that you can excel in and be careful to avoid wandering into other areas.
Defining and managing the line of demarcation is the key to long term viability in a relationship. We strive to for clarity on what their areas of focus are and where there is overlap we talk about how we will manage it. We don’t expect them to sell our services, but we are always delighted when we get a referral. And we are always happy to recommend them when it’s appropriate.
April 28th, 2009
Bruce Sterling in a 1994 speech “The Virtual City” made some interesting points about the interaction between the co-evolution of communication technology and cities.
The telegraph, and the telephone, which followed on its heels in about forty years, made the urban skyscraper possible. Not physically possible — the skyscraper was physically possible as soon as you had iron girders, curtain walls and steel-cage construction. But the telephone made the skyscraper informationally possible. Imagine how incredibly difficult it would be to run a business inside a skyscraper without electrical communication. It would be physically impossible to ship all those necessary messenger boys up and down through the structure.
There are very few high rise buildings in Silicon Valley, most of the technology firms end up in campuses full of buildings no more than four or five stories tall. Most startups tend to be in one and two story buildings. Winston Churchill observed that “We shape our buildings, and afterwards our buildings shape us.” I have worked my entire career in one and two story buildings in the urban sprawl of Silicon Valley. I wonder if the software that comes out of firms working in highrises in downtown San Francisco is markedly different from what’s produced in the industrial parks and campus office buildings of Silicon Valley.
In “How do Committees Invent” Melvin Conway’s observed what come to be known as “Conway’s Law.”
The basic thesis of this article is that organizations which design systems (in the broad sense used here) are constrained to produce designs which are copies of the communication structures of these organizations. We have seen that this fact has important implications for the management of system design. Primarily, we have found a criterion for the structuring of design organizations: a design effort should be organized according to the need for communication.
Another formulation of Conway’s Law is that communication problems in an organization will be manifested in their finished products. One example of this is from Tracy Kidder’s “The Soul of a New Machine” has a scene where Tom West, the leader of the Data General effort to develop a 32 bit mini gets a look at the VAX, DEC’s competing machine:
“Looking into the VAX, West had imagined he saw a diagram of DEC’s corporate organization. He felt that the VAX was too complicated. He did not like, for instance, the system by which various parts of the machine communicated with each other; for his taste, there was too much protocol involved. He decided that VAX embodied flaws in DEC’s corporate organization. The machine expressed that phenomenally successful company’s cautious, bureaucratic style. Was this true? West said it didn’t matter, it was a useful theory.”
Some lessons from Conway’s Law for startups:
- Attack a much larger competitors at “interstitial opportunities” that will require two or more divisions of a larger firm to collaborate to be able to compete with you.
- Be alert to a pattern of software defects that indicate team communication problems that you have overlooked (or been ignoring as not important).
- Whenever there is more than one way to accomplish the same thing, do a root cause analysis to make sure that the relevant parties are collaborating and not each going their own way.
See also
March 6th, 2009
Francis Fischbach attended the first Sales 2.0 conference in November of 2007 and blogged about it in “Inside Sales 2.0: A Report From the Front Lines.” I just realized that we missed the 2009 version that was held this week so I am recycling two comments that were added to Francis’ original post since I think they are still useful. And we will have to make it back next year to Sales 2.0, it looks like it’s becoming a very useful conference.
At the time Craig Klein commented:
Isn’t Sales 2.0 about building new pathways using technology that give the customer self serve access to information and letting the customer “pre-qualify” themselves by virtue of their actions before a sales rep spends time with them?
Jim Sterne of Target Marketing wrote a great book in 1996 called “Customer Service on the Internet” that’s now in it’s second edition that outlined how savvy firms were allowing customers to satisfy their service needs using the Internet. The implications for the sales process were clear then. The challenge that many startups face is that they are still on the “sales learning curve” and can’t effectively anticipate enough of their prospect’s questions to quality them without a conversation.
I am not sure we have a good definition for Sales 2.0, perhaps by the time we get to Sales 2.1 or 2.2 things will have settled down a bit. The Sales 2.0 that the blog post title refers to is just the name of the conference, and like “39 minute cleaners” just because something has a particular name doesn’t imply a warranty or guarantee of results. Not every self-titled next generation or paradigm shift actually obsoletes established practice: if and when “Sales 2.0? actually arrives it will be called “sales” for the same reason that very few people refer to cars as “horseless carriages.”
However, we are big fans of the cluetrain manifesto and the perspective it offers on the impact of Internet-enabled communication on customer development–sales, marketing and business development. I worry that the premise of your definition–”pre-qualify based on self-service access to information before a sales rep spends time”– sounds more like an attempt to avoid a conversation that could form the basis for a relationship, a relationship that might lead to a sale.
In our experience, it’s incumbent on startups to initiate conversation. Not the typical “sell, sell, sell” approach that established firms encourage in their sales teams to “maintain control of the conversation”–that’s an interrogation–but one where you are genuinely committed to understanding the prospect’s needs and are open to letting them teach you something new about your product.
December 4th, 2008
I attended a “Merge Briefing” workshop today offered by the Corum Group Ltd. on the status of software acquisitions. I had learned a lot from a workshop that Ward Carter, Corum’s CEO, gave at the Software Business 2007 conference and felt that this would be informative. It turned out to be much more. It was given by Nat Burgess, and it was quite sobering.
Burgess characterized merger and acquisition activity as either driven strategic considerations or by consolidation. Strategic software acquisitions are driven by major changes in the business environment caused new technologies, new or rapidly growing markets, or new regulation requiring IT infrastructure upgrades. Consolidation is driven by general financial uncertainty, IT purchasing slowdown, or regulation creating additional expense.
Burgess offered the perspective that, with the exception of a few highly strategic market sectors, we have moved from a market driven by strategic acquisitions to a consolidating market. Consolidation driven acquisitions tend to be done at lower multiples than strategic ones, and as mergers or acquisitions have historically accounted for 90 to 95% of the dollars in a software company exit this means that firms need to focus on recurring revenue models, clear ownership of all relevant intellectual property, and attacking a customer’s deteriorating cost or risk situation.
Corum offers a free weekly newsletter that tracks software merger and acquisition activity as well as quarterly briefings on-line. It was a sobering assessment but one that seems thoroughly grounded in the current realities. I was glad to be able to meet Nate Burgess and to hear the presentation. One thing that became clear as I was reading through the briefing book afterward was that acquisitions are going to be the overwhelming majority of exits for the foreseeable future, and I need to pay more attention to software M&A activity if our firm is going to be able to assist our clients in getting the best value for their technology and business.
Update: Nate Burgess blogged about the event and posted photos including this one that shows me sitting next to Craig Sirnio of the Angel’s Forum.
December 3rd, 2008
“Contentment comes from wanting what you have,
Ambition from wanting what the other person has,
Progress from wanting what nobody has.”
Bob Lewis “Random Thoughts“
Bob Lewis writes the “Keeping the Joint Running” E-mail newsletter, devoted to practical advice for leading IT organizations effectively. You can register here.
From his column “In General, a Time for Generalists” Bob offer three tips for reducing expenses.
- Any schmuck can cut costs. Economizing–finding efficiencies that allow the organization to continue delivering as much service as possible while reducing costs–requires excellent management.
- Don’t try to solve it in big, bold strokes. The best solutions usually come from nibbling away at the problem.
- If everyone does everything the same old ways, all you’ll be able to do is cut costs — you won’t find any opportunities to economize.
I feel that there is a deep insight here: organizational change has a number of complex interrelationships that can yield sharply non-linear effects (sometimes no effect after seemingly large changes, and often small changes generating huge unintended consequences). Nibbling away allows you to proceed cautiously, especially when making cutbacks, to assess the effects. I have touched on a different aspect of this in “Doing Less with Less” but startups should be continually re-evaluating development and support methodologies, running experiments to see if changes in approach can yield more productivity or bona fide cost savings.
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