Larry Sonsini Profiled in Fortune Nov-27-06

Written by Sean Murphy. Posted in Startups

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

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

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

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

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

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

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

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

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

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

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

Investing Creates Conflict

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

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

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

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

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

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

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

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

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

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

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

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

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

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

OK, so what are some take-aways for entrepreneurs

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

Thoughts on Perseverance and Promises

Written by Sean Murphy. Posted in Quotes

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

“Victory belongs to the most persevering.”
Napoleon Bonaparte

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

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

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

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

Nesheim vs. Cowan on Bootstrap Economics

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Nusym De-cloaks 3

Written by Sean Murphy. Posted in EDA, Startups

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

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

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

Custom Centric Marketing Means Shifting to “Resolution Messages”

Written by Sean Murphy. Posted in Events, skmurphy

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

“Product Specs -> Features -> Benefits”

And replaces benefits with “resolution messages” to yield:

“Needs -> Resolutions -> Product Specs”

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

Stirr Mixer 1.8

Written by Sean Murphy. Posted in Events

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

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

Three interesting people I came across

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

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

Voice over narration is on our list of stuff to do at some juncture. However, we’re thinking at the start that simple, automatic, decent videos from photos and music has a broader appeal. Doing voice overs requires a fair bit of expertise (microphone, etc.).

My thought was that it would allow Tracking Shot to do more “business oriented” stuff because messaging could be added via voice.  Folks could also add background narration snippets around a photo, group of photos, or sequence of photos. But I do agree on the recording quality, although with all of the audioblogging going on they might be able to leverage another service and just mix them in.

Bruce Mau’s Incomplete Manifesto for Growth

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

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

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

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

Written by Sean Murphy. Posted in Events

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

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

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

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

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

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

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

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

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

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

The “Art of Rainmaking” at Art of the Start

Written by Francis Adanza. Posted in Events, Startups

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

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

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

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

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

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

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

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

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

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

3 things I learned at Art of the Start

Written by Theresa Shafer. Posted in Events, Startups

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

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

KMWorld 2006 Wrap-up

Written by Sean Murphy. Posted in Events

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

Q:Why do you come to KMWorld?

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

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

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

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

Two choices: Techdirt Greenhouse and Office 2.0:

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

Q: Any sessions in particular you plan to attend?

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

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

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

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

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

Q: Any advice for the Conference Organizers?

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

Q: What else can you tell us about yourself?

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

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

Blogging From KMWorld 2006

Written by Sean Murphy. Posted in Blogging, Consulting Business

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

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

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

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

Tags:

JotSpot Dissolves Into Google Business Model

Written by Sean Murphy. Posted in Startups

As a Jotspot customer I am not at all excited by the portents around Jot’s announcement that they had been acquired by Google for an undisclosed sum and that, for the moment, no new accounts could be created. From Jot’s Home Page

New users:
We’ve closed off new account registrations while we focus on migrating to Google’s systems. If you’d like to be notified when we re-open registration, enter your email address below.

Why when you would probably have the most interest in your service would you not allow me to add any accounts or allow anyone new to signup. Because it’s going to pull a Writely and dissolve indistinguishably into Google Docs & Spreadsheets. I don’t think this is a good reason to add new clients into a GoogleSpot workspace. This is an experiment on Google’s part. Their business model is advertising driven, and private workspaces for confidential work with clients–which is our use case–are not amenable to having a crawler come through to generate context specific advertising. I certainly agree with the three challenges that Jot faced as outlined by Scott McMullan in their developer blog:

  1. Startups fail all the time — will you be around next year?
  2. This will be mission critical for us — do you have the manpower to support your service?
  3. We need fast, reliable, and scalable access — are you up to snuff?

This looks to me like an experiment on Google’s part, and large companies abandon experiments all the time, especially since they haven’t announced an acquisition price. Mission critical doesn’t require Google scale to succeed (in fact a wiki service based on Amazon’s EC3 would be as rock solid, something for some of the remaining 100+ players to consider). Not only that but Amazon’s business model is more conducive to charging me a small amount for good service on a pay as you go basis. There are other grid alternatives as well worth considering,more on that later.

Peter Thoeney, speaking from the Twiki perspective, believes that this is a good thing because it eliminates them as a competitor in the enterprise space:

I believe this is good news for the open source TWiki project because:

  1. It further boosts the awareness of wikis in the general public; and with this will bring more recognition to TWikis running at the workplace.
  2. With JotSpot moving to hosted only solution and staying away from software packages and appliances, other enterprise level wikis will get more traffic, such as TWiki, Socialtext and Confluence. I have not seen many large companies that entrust their mission critical wiki data to be hosted by a third party.

I am more sanguine about the possibility for hosted wikis penetrating the enterprise, but I do think it’s good news for Twiki.

Ross Mayfield offers a way to “Get Yourself out of a Spot” We may take him up on it, if only to reduce some of the uncertainty for existing clients. Atlassian has also announced a migration path for JotSpot Wiki Server customers (but not folks like me who I think Zoli characterized correctly as preferring to pay rather than have Google analyze all of my shared work product with a client; it would be an interesting exclusion in the non-disclosure agreement: we allow the Google advertising context spider to read everything we work on together).

I will have to browse through the http://www.wikimatrix.org/ and investigate some alternatives. We also use Socialtext and EditMe with existing clients. We also use WebEx Office, which now looks like it should add/acquire a wiki (without raising prices).

I am not knocking the execution and delivery of Google’s Docs & Spreadsheets (see for example an Oct-17-2006 PC Mag Review) I was an early Writely user (but wouldn’t commit to any customers when they wouldn’t give me a monthly fee I could pay to guarantee service) and we have experimented with Google Spreadsheets and was extremely impressed. It’s the alignment of the Google business model with my business needs that has me the most concerned for this application.

End Note: while researching this I was surprised to learn that the San Jose Mercury was podcasting. They posted a Feb 2006 interview with Joe Kraus to add context to their Nov 1 news story.

Carole Edman, HR Manager To Go

Written by Sean Murphy. Posted in Startups

I have had the pleasure of meeting Carole Edman at a number of networking events and been impressed with professionalism and expertise. She started consulting in 1986 as Carole Edman & Associates, and has been offering the following services to small and mid-size companies:

  • High quality interim, on-call, or part-time Human Resources Management consulting services, to prevent or resolve tough issues in hiring, retaining, and managing employees
  • Human Resources training, coaching, and guidance for HR team members, CEO’s, senior and mid-level managers, first-line supervisors, and employees
  • Development and implementation of employee handbooks, benefits, compensation, and performance management programs.

Her website has a rich set of resources on HR questions, one question that came up recently that she was very helpful with was how to determine whether a worker should be treated as an independent contractor or an employee. Here are some references to both Federal and CA rules that are with reviewing before you make this decision.

Carole offered the following advice

The FED & CA rules are not the same and many companies (including Microsoft, FedEx, many others) have had to pay huge fines for misclassifying workers as independent contractors (ICs). Audits occur when ICs who should have been employees make a claim for unemployment or state disability or are unhappy that you terminated their services, or just at random.  They also occur when the IC has only one client and one 1099 in a year, or gets a W2 and 1099 from the same company in the same tax year.  Several small clients of mine have been audited and it is a time-consuming, expensive process, to be avoided if at all possible. The EDD has become very aggressive in auditing for non-compliance, as it is a way for them to bring in $$ with fines and back taxes (payable by the employer, regardless of whether the employee/IC already paid them; they are double collected).

Carole has been very helpful to a number of folks I know. If you are a Silicon Valley startup I would encourage you to keep her HR Manager To Go website on your list of resources for when those thorny employment and human resources issues come up (or if you want to prevent problems consider being pro-active about an employee handbook).

Administrivia in Startups

Written by Sean Murphy. Posted in Startups

I had lunch with Sylvia Nessan, a veteran of Synopsys, CoWare, and several high tech startups and she made an observation that I thought was worth writing down: the founding team, and CEO in particular, don’t pay enough attention to how much time they waste on administrivia. Hiring an admin or other outside service providers to take care of the four to eight hours a week of work that they really don’t need to do–basic e-mail networking, taxes, finances, office management / operational issues–reduces the number of different balls they have to juggle at once and increases your effectiveness by 25-40% when you take into account that, although it’s an important set of tasks that must be done, the founders don’t have to do it.

Nancy Blachman’s Google Guide

Written by Sean Murphy. Posted in Events

I’m late to the party on GoogleGuide, based on who else has written about it, this blog entry was triggered by Nancy Blachman’s upcoming talk, “What Google Can Do For Your Business,” Tuesday, November 21, 2006 7:00 PM, at the IEEE-CNSV meeting at KeyPoint Credit Union, 2805 Bowers Ave., Santa Clara, CA.

This looks to be a good talk, but if you can’t make that Nancy has a schedule posted for other upcoming talks. And you can always just consult her Google Guide directly. Two sections I found particularly useful were on adwords and advanced commands. And as the Pandia Post Newsletter observed in January 2004

Take a look at her GoogleGuide web site. There she gives away a lot of web search information for free. Actually, if you print out the printer-friendly version of her site, you end up with a very useful book containing some 114 pages of Google tips and information.

Actually, as of Oct-23-2006, the Google Guide PDF is now 149 pages, so Nancy hasn’t been idle in keeping up with Google’s new features. With her very impressive resume (an MS from Berkeley in Operations Research and an MS in Computer Science from Stanford) she should be working at Google..say on an easy-to-use constantly updated guide to how to use Google for novices and experienced users alike. But she may happier running Variable Symbols and letting her husband work there–since 1999 according to this interview.

If you are a technical consultant in Silicon Valley, the IEEE Consulting Network for Silicon Valley frequently runs useful and informative events and is an organization you should consider joining.

 

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