Archive for November, 2008

Quotes For Entrepreneurs – November 2008

Written by Sean Murphy. Posted in Quotes, skmurphy

I now see books being written and thousand dollar a seat conferences offered on how to use twitter. My model is fairly simple, starting in April of this year I post quotes that I believe are useful, thought provoking or otherwise inspiring for entrepreneurs on @skmurphy. I try and post about ten quotes for entrepreneurs a month and collect them at the end of the month in a blog post. Enter your E-mail if you would like Feedburner to deliver new blog posts to your inbox.

+ + +

“Ancient Greeks defined happiness as the exercise of vital powers, along lines of excellence, in a life affording them scope”
Edith Hamilton in “The Greek Way

This quote inspired “Offer Scope for Employees to Exercise Their Vital Powers

+ + +

“The hardest arithmetic to master is that which enables us to count our blessings.”
Eric Hoffer in “Reflections On The Human Condition

See also “Thanksgiving 2008” and a longer quote in “Unfamiliar Pain

+ + +

“Base your strategy on things that won’t change.”
Jeff Bezos

See also “Jeff Bezos on Strategic Planning

+ + +

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

See also “Quotes on Operational Excellence“)

+ + +

“Effective prototyping may be the most valuable core competence an innovative organization can hope to have.”
Michael Schrage

+ + +

“Good business development is a sincere interest in clients and their problems, and spending time to be helpful to them.”
David H. Maister

+ + +

“I am reaching OSHA limits for PowerPoint exposure.”
Larry Lang

+ + +

“We thought, because we had power, we had wisdom.”
Stephen Vincent BenetLitany for Dictatorships

Good advice for first time managers and CEO’s.

+ + +

“Point of view is worth 80 IQ points.”
Alan Kay

+ + +

“Despair is not only a sin but bad tactics.”
Brian Dunbar in “Vote

+ + +

“Going to SCORE is a lot like asking your grandpa for driving advice.”
Cass Brewer, founder Truth to Power

Offer Scope for Employees to Exercise Their Vital Powers

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

Some post-Thanksgiving musings on my belief that most people want to do a good job. As you grow your startup find ways for everyone involved to work hard, see an impact, and improve.

“Ancient Greeks defined happiness as the exercise of vital powers, along lines of excellence, in a life affording them scope” Edith HamiltonThe Greek Way

I think most people (employees) want

  • to do a good job and prefer to work hard.
  • to see an impact from their labors, ultimately that their firm’s customers to be delighted with their experience of interacting with their firm’s products and service teams.
  • to get better at what they do.

It’s our challenge as entrepreneurs to create the right environment for this.

I don’t think that working hard means

  • Long hours, at least on a regular basis (also see the following for background on why more than 40 hours a week is quickly counter-productive:
  • Having to put up with a lot of bureaucracy and poor management (note: this means you and your decisions or lack of decisions if you are in charge)
    • One thing I am surprised we are not seeing more of is four day work weeks instead of layoffs. My experience with this has been that more gets done if it’s also used as a reason to cut back on unnecessary meetings and other time wasters.

Seeing an impact means just that. As founders we need to get out of the way and create systems that allow everyone in the company to see what’s happening without having to hear it from you. This does not mean showing any less appreciation for good work, or not actively addressing areas that need improvement. But it does mean establishing dashboards and metrics that allow everyone to help steer.

It’s been my experience that most teams perform up to a set of shared expectations and a “group pace” that a manager can help to set but is ultimately only a part of, not the determining factor (on the up side, on the down side poor management can wreck even a strong team over time). I think the best teams achieve an “Easy Does It” group flow where they are moving reasonably fast but making very very few errors. They may be trying a number of experiments and not having them succeed, but they aren’t creating re-work and ill feeling internally or externally.

Yatin Trivedi on the Value of Coopetition

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

Yatin Trivedi has been in EDA for more than 25 years, he is currently the senior director for strategic industry alliances at Magma Design Automation Inc. What follows is a long excerpt from an opinion piece he wrote for today’s EET on Cadence decision to shrink the size of the Connections Program (bold added). It’s one of the clearest statements of the value of partner programs that I have read.

The motivation for a partnership program in any company is to better serve the customers beyond one’s ability. Although true in every industry, let’s stick to EDA vendors and chip designers to understand this better. Chip designers need design implementation, verification and analysis tools; they need various IP cores, standard cell and I/O libraries, memory compilers; they also need design services, foundry services and many more “back-end” functions to manage the production side of their hard work.

There is no single supplier to chip designers who meets all the requirements. Even when the best design implementation tools come from one vendor, verification tools are provided by another vendor and IP is delivered by multiple other vendors. Every design team has a “hodgepodge” of tools, IP and other environment helpers to make the whole flow tick. When something goes wrong, two or more vendors must work together to help the design team. Hence, the need for interoperability, reference flows, cooperation and partnership program.

For large vendors, such a program is also an excellent way of influencing smaller vendors. If one tool is feeding data into another tool, one can use a proprietary or a standard format for data exchange; or, one can use an API for tighter integration. It is much better to grow the ecosystem so the entire user base grows with it. For most us, that means working with open standards and actively promoting interoperability rather than pushing proprietary formats. We compete on superior algorithms, tool implementation, ease-of-use, and customer support; not by closing doors on others and protecting our turf through proprietary barriers.

Coopetition,” far beyond healthy competition, grows the entire industry and creates win-win-win for partners and mutual customers. It requires a mindset and a long-term management commitment. Short-term views and protective behaviors are doomed to fail. We don’t have to go far to see how leaders in similar industries are behaving; TSMC announced its OIP program with a sound win-win-win proposition earlier this year. This is what differentiates winners from losers.

Some background links:

  • Deepchip Nov-20-2008 “Can You Smell the Mendacity?
    Three days before the renewal date, Cadence evicted 48 EDA companies from their “Connections” program.
  • EET Nov-24-2008 Cadence Boots Dozens of Firms from Partnership Program
    Beleaguered EDA vendor Cadence Design Systems has removed a number of companies from membership in its Connections program, a collaborative effort the company maintains to support third-party software suppliers that offer complementary tools
  • EET Nov-25 2008 “Cadence Exec Downplays Connections Controversy
    In an interview with EE Times, Pankaj Mayor, group director of business enablement at Cadence, said membership in the Connections program is fluid and that the list of member companies changes constantly. On a continual basis, companies drop off as they are acquired, decide the program no longer has value to them, or are denied membership extension when it is determined continuing partnership does not benefit Cadence, Mayor said.

I think Pankaj Mayor slipped on the last quote and told the truth instead of saying “does not benefit Cadence’s customers” but now and then a little honesty never hurts. You also have to be worried when your company is described as “beleaguered” in an EET article.

Net Net for EDA startups: unless you have several customers in common who are willing to sponsor you for the program I wouldn’t waste any time applying to Connections.  Cadence will listen to its customers and that’s the only thing that will get you into or keep you in a program like this one. None of the major players (e.g. Cadence, Mentor, Synopsys) are interested in helping your firm get established in the marketplace or seeing you prosper. They are not necessarily against you but they are not for you. If you can get a few customers who want your solution to work better with an incumbent, and are willing to go to bat for you then rely on them to get you into the program.

As of this evening a check of the Cadence Connections website reveals the following 100 companies in the program: Actel Corporation, ADIVA Corporation, Advantest Corporation, Aldec, Inc., Altos Design Automation, American Computer Aided Engineering (ACAE), ANSYS Inc., Applied Simulation Technology, Arithmatica, Inc., Artwork Conversion Software, Asset Intertech, Atrenta Inc., Azuro, Inc., Berkeley Design Automation, Inc., Bluespec, Inc., Cadalist-Enterprises,LLC, CAE Consulting, Calypto Design Systems, Inc, Carbon Design Systems, Certess, Inc., CFD Research Corporation, ChipVision Design Systems AG, ClioSoft Inc., Concept Engineering GmbH, CopperCAD Design Inc., Coupling Wave Solutions S.A. (CWS), Coventor, Inc., CST GmbH, DAFCA, Inc., Dassault Systemes Enovia Corp., Design Advance Systems, Inc., DFM, EDXACT SA, Elgris Technologies, Inc., Engineering DataXpress, Fenix Design Automation, GateRocket, Inc., Genesys Testware, Inc., Gradient Design Automation Inc, Helic S.A., Hummingbird Ltd, IC Manage, Inc., In2Fab Technology Limited, Integrand Software, Inc., Intellitech Corp., Interra Systems, Inc., Knowlent Corporation, Library Technologies, Librato, Inc., LogicVision Inc., Lorentz Solution, Inc., Lynguent, Inc., MethodICs LLC, Micrologic, Inc., MODECH Inc., Modelithics, Inc., Nangate A/S, Nano Integrated Solutions, Inc., National Instruments, OEA International, Omnify Software, Orora Design Technologies, Inc., PDF Solutions Inc., Perception Software, Perfectus Technology Inc., Phoenix Design Systems, Physware, Inc., Pinebush Technologies, Inc./S3, Productivity Engineering GmbH, Prolific, Inc., PTC, Pulsic Limited, PwrLite, Inc., Sagantec, Inc., Sequence Design, Inc., Shocking Technologies, Signal Integrity Software, Inc., Silicon Frontline Technology, Inc., Silvaco International, SKILLCAD, Inc., SoftMEMS, Sonnet Software, Inc., SpringSoft, Inc., Stratosphere Solutions, Inc., STX Cadware, Synopsys, Syntest Technologies, Inc., Taray, Inc, Test Insight Ltd, Test Systems Strategies, Inc., The MathWorks, Inc., TOOL Corporation, TransEDA Systems Ltd, Transitive Corporation, Valor Computerized Systems, Inc., Veritools, Inc., YDC Corporation, Z Circuit Automation, Zeland Software, Inc., and Zocalo Tech, Inc.

Update Dec 10: it appears that Intellitech and Tool Corporation are both still in business but have been dropped from the Cadence website in the last two weeks.

Three Software Startup News Aggregators: Hacker News, Techmeme, Alltop

Written by Sean Murphy. Posted in Tools for Startups, Uncategorized

Here are three startup feeds that I use at last weekly (I am skmurphy on Hackers News and may check there two or three times a day) that represent three different models to generate a stream of topical links for folks in software startups.

What are your favorite sites for tracking news and developments related to software startups and entrepreneurship?

Update Nov-24: Two folks wrote in to suggest two free services for tracking EDA startup news

Both of these services are free and don’t require a registration to access.

Disruptive Tools Can Stall At Group Boundaries

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

Interesting web site demo at by the folks at Altium. Unlike any PCB demo I have ever seen and an interesting use of self-deprecating humor to talk about the challenges of linking FPGA, Board, and Mechanical design. Two time coded remarks

  • at 2:25 “We did what any traditional EDA company would do, we denied and avoided the problem.”
  • at 2:50 “After offering the same thing as everyone else for a while, we decided to grow some bollocks and actually solve this properly.”
  • Followed by a sequence of 3D views of PCB design–not the traditional a birds eye view–that allow you to more easily judge height interaction issues.

Altium is an Australian company–you may know them as Protel–that does about US$50M in revenue. I caught this link on the Mentor communities site in the comments by “pcb_man” on a post by John Isaac “Collaboration Across the Product Development Process.”

Based on a number of efforts to foster collaboration between Mechanical and PCB design teams in the past, I suspect that there will be significant cultural issues to be worked out to enable real time MCAD/ECAD integration and it’s attendant quality and time to market benefits. Loosely coupled toolsets in both domains allow groups to work more autonomously, even if the schedule impact is negative. Anytime you see a new tool that can redraw decision making and political boundaries, the barriers to adoption have more to do with changes in perceived level of control than shortcomings in the actual solution.

I have developed a rule of thumb for introducing new systems: the difficulty is proportional to the cube of the number of “silos” or distinct team/administrative boundaries you had to cross to get to an initially viable solution. For example

  • 0 boundaries crossed: only adjust the workflow within a singe team or work group, leaving external inputs and outputs unchanged (except that you hope they have fewer errors or lower latency or can handle more complexity).
  • 1 boundary:  both sides have to want to change or one group has to be convinced to either supply a new input or accept a different output. This gets attempted unilaterally a lot in the form of
    • “if you will only give us this new input our jobs will be easier” If the two groups don’t share a common reward structure there is always a sense of “What’s in it for me?”
    • “You have to use our new form/system to make requests” You mean I can’t pick up the phone or send e-mail? Let’s see what kinds of crises get manufactured.
    • “We can no longer give you this data or output, our new system doesn’t support it” Well then you may be spending a lot of time doing manual work-arounds until you get that fixed.
  • 2 boundaries: 23 = 8 times harder. There are several different ways that three groups can merge together. If you can turn this into two pairwise transactions it’s much easier. Only possible if all three unhappy and willing to change.
  • 3 boundaries: 33 = 27 times harder. I have only seen four groups come together in response to things like a corporate commitment to pass an ISO 9000 audit or satisfy SOX. Even then it’s much easier to focus on pairwise changes  in the context of an overall plan for evolution.

Conserving Trust in a Downturn

Written by Sean Murphy. Posted in 3 Early Customer Stage, 4 Finding your Niche, skmurphy

A lot of is written these days about how to conserve cash in a downturn. In particular the need to cut expenses by cutting headcount and unnecessary fill-in-the-blank spending. But conserving trust is equally important. If you have been bootstrapping and only increasing expenses in response to revenue (versus in anticipation of revenue) then your next question might be “What else can I do?”

Ridge Evers wrote “Guiding Your Business Through the Recession” in March of this year. For me it stands out as the best “top ten” list for surviving this downturn. It starts off with two good suggestions for protecting your current revenue by making sure you stay intimate with your best customers.

1. Focus on your existing customers – Figure out how to keep them. Remember, they’re under the same pressures you are. Make sure you’re the one they want to do business with when things get tough. But don’t make the mistake of becoming their bank by extending too much credit.

2. Make sure you know your best customers, and that they know you care about them – Who, specifically, is your buyer? There’s an old expression in sales: “know your customer’s shoe size.” It’s always a good idea, but especially in an uncertain economy. If you sell to other companies, you need to understand them at the individual level. Communicate frequently, but take the time to make your communication relevant and interesting.

His list is the only one I have read that also addresses the need to remain trustworthy–and therefore creditworthy (hyperlinks added):

5. Conserve creditworthiness – Just like you don’t want to be your customers’ banker, don’t get into the position of being overextended with vendors, especially the ones you really depend on. This is often the opposite of what your instincts are – we all think our key vendors need us, which is true right up until they decide they can’t afford you as a customer. If you have to stretch payments, do it with ancillary vendors, and don’t wait for them to call you – tell them that you’re going to pay them later than you think you can, so you then pay them sooner than you said you would.

6. If things are tight, pay off all the little bills first – You’ll spend as much time and energy answering calls from the little guys as you do from the big ones. And remember the old adage: “If you borrow $1,000 and can’t pay it back, you have a problem. But if you borrow $100,000 and can’t pay it back, the lender has a problem.” Your bigger vendors will work with you – they don’t want to lose you if they can help it. So pay off the little guys, and then communicate with the big ones openly and frequently. And pay something – it shows good faith, and makes it harder to cut you off.

Evers wrote an earlier post in December of 2007 “Should You Raise the Ceiling or Lower the Floor” which used a great visual metaphor for business planning: headroom.

Essentially, a business has “made it” when you can stand up inside the “room” that you’ve created. Obviously, there are two different ways to create more headroom: you can raise the ceiling (revenues), or you can lower the floor (expenses). It’s a physical analogy, but one that I’ve found is really useful in both understanding what’s going on, and in figuring out what to do.

Many owners spend a lot of their time focused on controlling costs (lowering the floor). Some degree of this is healthy, especially when it comes to building a culture within your company that encourages thrift. It’s also the easiest thing to do when you hit a bump, generally, because expenses are something you can control. But it is exceedingly rare that cost control – in any size of business – paves a path to success. The best you can hope for is to buy time.

Most bootstrappers tend to be risk averse: they have all of their eggs in one basket so they have to guard the basket. Given that, attacking an existing expense stream makes a lot of sense, it’s much more tangible than identifying and attempting to exploit an opportunity. Cost management and accounting tools are more mature, especially for small businesses, than marketing and opportunity identification tools. What’s the marketing equivalent to QuickBooks for a small business or a VSB (very small business with less than 15 people, less than four million on revenue)? Please contact us if you know of or are using a good one.

I think for the most part cost saving requires less change in behavior (obviously there are exceptions like the lean model, which requires a fundamental re-think, and some well constructed re-engineering efforts) than going after new customers and so requires less “social cost” inside the business to implement. The negative side effects from a cost savings effort typically take a while to manifest, where the costs savings themselves are normally quickly available.

The place where the most successful business owners focus their energies is on raising the ceiling: growing revenues to the point where the business can stand up comfortably, and keeping it there. And, paradoxically, in many cases the path to a higher ceiling involves increasing expenses – for example, adding a new salesperson, upgrading equipment, or investing in marketing – so as to be able to attract more customers or increase sales to your existing customer base. (More about this in a later posting, but as the old saw goes, “You have to spend money to make money.”)

“What else can I do?” Give us a call.

Our promise is “early customers and early revenue” and our focus is on “raising the ceiling.” We work as virtual members of your team to build on your strengths: your current customers and current products. We help you to sell better what you have. We use low cost methods to explore current and potential markets for new customers. We gather feedback from your current customers, prospects, and lost opportunities, looking for ways to improve your offering to meet their needs more completely.

And we teach founders how to do all these things for themselves over time because we believe that this is the best way to build trust and a long term relationship. We started this firm in 2003, some of our early clients had barely survived the dotcom bust of 2001-2 and were concerned about how to add new customers: we’ve “seen this movie before” and understand how to help you spot the opportunities that are available.

Daniel Pink’s “Free Agent Nation” Worth Revisiting

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

In April of 2001, as the euphoria from 1999 started to fall to earth again (by October it would be accessible only by Deep Submersible Rescue Vehicle)  Daniel Pink wrote “Land of the Free” in Fast Company that was a teaser for “Free Agent Nation” as a hardback in May of 2001 and paperback in May of 2002.

He offered 7 laws for the new “Free Agent Nation” (I have highlighted my top 3)

Law 1: Independence is the best hedge against a downturn.
Law 2: When times get tougher, quality counts.
Law 3: Free to be you and me? We’ve got to be you and me.
Law 4: You’re on the line. Where else would you want to be?
Law 5: Up isn’t the only direction.
Law 6: Bigger isn’t better. Better is better.
Law 7: Forget survival of the fittest. Think Golden Rule.

The three that I find most useful as guides are the importance of quality in tough times, that better is better (and sometimes different is better),  and that it’s really about the Golden Rule.

We are all part of interlocking partially overlapping groups, networks and communities. We can really only prosper if other folks in our group, network, or community also prosper. Not that there isn’t competition, and fierce competition in a downturn, but few other firms are your direct competitor, and many can be partners of varying levels of engagement.

6 Work Weeks (or Less) Until 2009

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, skmurphy

  1. Nov-17: the last full week before Thanksgiving, if you are trying to close business it can get much harder between Thanksgiving and New Years Day [Full Week]
  2. Nov-24: a half week at best. [Half-Week]
  3. Dec-1: normally a good week [Full Week]
  4. Dec-8: normally a good week [Full Week]
  5. Dec-15: unless you are chasing end of year budget can be very slow [Half-Week]
  6. Dec-22: normally a good time to reconnect with friends and family [Full Week for hermits]
  7. Dec-29: last chance to file paperwork with a 2008 deadline [Half-Week; Full Week actually but halfway through it you are in 2009]

Some logistics issues you should take care of now instead of early 2009:

  • If this is your first year in business get your accounting system (in most cases in the US this will be QuickBooks) in order now, schedule a meeting with your accountant (or interview candidates and select one) before December 15. If you are based in Silicon Valley we are huge fans of Ogden Lilly.
  • If you are not chasing active opportunities the first two weeks in a December this can be a good time to sit down for a recap of 2008 and some planning for 2009. You may want to do the recap the week of Dec-1 or Dec-8 and the planning the week of Dec-29.
  • If you’ve been working on a startup but haven’t incorporated yet, you may want to get all of your paperwork in order but postpone filing until the first week in January, in some states this will save you paying 2008 annual fees for a few weeks of operation in December and then 2009 annual fees. We like to see teams incorporate sooner rather than later if only because it gives you a vehicle to do business with that’s better than a collection of sole proprietorships.

We will have our normal Bootstrappers Breakfasts in December, RSVP now we would be delighted to see you. If you’ve been meaning to come for a while, find time in December and see if it’s something you want to make a habit in 2009

  • Friday December 5th at 7:30am at Hobee’s in Palo Alto
  • Friday December 12th at 7:30am at Omega Restaurant in Milpitas
  • Tuesday December 16 at 7:30am at Cocos in Sunnyvale

Tips For Handling Referrals

Written by Theresa Shafer. Posted in 5 Scaling Up Stage, Lead Generation, Sales

Tips for Nurturing ReferralsNurturing Referrals Is Critical to Growth

Nurturing referrals is a critical activity for every entrepreneur. A referral is an introduction to a prospect with an endorsement. They come from shared success with your customers or colleagues, someone who knows your potential and can vouch for you or your team’s ability to deliver. These individuals are the best way for you to get new business.  However, it requires time and energy to build and maintain the relationships that foster referrals. When someone gives you a referral here are a couple tips on how to nurture it.

7 Tips For Nurturing Referrals

  1. Model your relationship after the Save-the-Children Sponsor Program: Pictures and Thank you Letters
  2. Be proactive with Thanks
  3. Communicate on Progress
  4. Keep Them in the Loop
  5. Manage their Reputation
  6. Deliver for them
  7. Be clear on service demarcation (small overlaps are better than gaps)

Three Key Things to Remember

  • They are sponsoring you
  • Reputations are hard to build and easy to dent
  • You are creating “customers in common”

Tristan Kromer left a comment: “It’s rarely possible to overdo follow-ups!”

SKMurphy E-Mail NewsletterRelated Blog Posts

We Started With Two Empty Hands

Written by Sean Murphy. Posted in Quotes, skmurphy

“We started with two empty hands.” Icelandic expression

It’s hard to believe the frugal and hardworking Icelanders have gone bankrupt. I re-read Njal’s Saga every few years and find new nuggets each time. In Letter from Iceland, Robert Jackson reported November 14, 2008 in the Financial Times on the complete meltdown of Iceland’s financial system.

There is no daytime TV in Iceland. Parents are at work and children at school, so the test card, that feature of a bygone age, is the only thing aired. For the transmitters to be switched on in mid-afternoon and a sombre-looking Geir Haarde, the prime minister, to appear behind a desk, a national flag at his side, it had to be serious – and it was. The country was on the verge of bankruptcy; the government was taking control of the banks and was going to assume far-reaching powers to secure the safety of the nation and its savers.

“Fellow countrymen … If there was ever a time when the Icelandic nation needed to stand together and show fortitude in the face of adversity, then this is the moment. I urge you all to guard that which is most important in the life of every one of us, to protect those values which will survive the storm now beginning. I urge families to talk together and not to allow anxiety to get the upper hand, even though the outlook is grim for many. We need to explain to our children that the world is not on the edge of a precipice, and we all need to find an inner courage to look to the future … Thus with Icelandic optimism, fortitude and solidarity as weapons, we will ride out the storm.

“God bless Iceland.”

Icelanders have seen their economy swell and shrink from time to time over the centuries, and always handled it calmly. Perhaps their heritage in fishing and agriculture enabled them to meet good years and bad with equanimity. Now they must cope equally well with an attack of economic bulimia. To understand what makes this crisis – kreppa, as it is known here – so unlike any other, a little history is needed.

For Icelanders, the golden years were the early years, shortly after the land was settled in the ninth century. The Viking tradition, the Althing – the legislative assembly dating to 930 – and the literary canon of Sagas and Eddas are the nation’s cultural bedrock. But after that, Iceland almost disappears from the history books. While the agricultural revolution, the Renaissance, the industrial revolution came and went, while the fine cities of Europe were being built, while artists from Michelangelo to Mozart were pouring forth their creations, while the great inventions and discoveries were being invented and discovered, Icelanders were hunkering down in their turf houses, meeting the hardest challenge of all – survival.

They survived plague, famine, earthquakes and volcanoes. There were times when some even considered abandoning the island. But they stayed on. They stayed and survived. Icelanders will tell you that only the fittest survived, but that is only half the story, because survival requires another key attribute: stubbornness. And Icelanders have it in spades. It is a national trait, and they view it not as a weakness but as a virtue. It comes from experiencing hardship and enduring it. It means finding satisfaction in a simple task done well and sticking to it; finding comfort and solace in family and kinship and being bound by those familial bonds and duties. And perhaps most important of all, it means believing in the independence of the individual as part of the fabric of nationhood, and fighting for that independence. Put simply, the country has values.

And this is what sets this catastrophe apart from the earthquakes and plagues of former years. This is a man-made disaster and worse still, one made by a small group of Icelanders who set off to conquer the financial world, only to return defeated and humiliated. The country is on the verge of bankruptcy and, even more important for those of Viking stock, its international reputation is in tatters. It hurts.

At a key point in Njal’s Saga, Njal observes “With law, the land shall be built; without law, the land shall be laid waste.” I am afraid that the next decade will sorely test Iceland.

Odd Jobs With an Even Temper

Written by Sean Murphy. Posted in 2 Open for Business Stage, Founder Story, Rules of Thumb, skmurphy

When you are very angry, think about how momentary a man’s life is.
Marcus Aurelius

I worked in the router software marketing group at Cisco in the early 90’s. I had left engineering and taken up residence in the marketing department. I was playing asteroid to a number of dinosaur protocols: we had realized that it wasn’t about supporting as many different protocols as possible (PUP, Chaosnet, Arcnet come to mind as examples) but to be really good at supporting IP. At one point I sent out an e-mail with the subject line “The following protocols are ‘on the roof‘.”

We had male admin named Ken. Cisco was a rapidly growing company then, with the stock doubling every year, and the culture was tolerant of a high level of direct conflict, what we would refer to as “a full and frank exchange of views.” Ken maintained a small but durable force field of calm in the midst of the frenzy.

I made him a sign for his cubicle wall (clearly I didn’t have enough to do):

“Boy Scout in Residence: Odd Jobs With An Even Temper”

He was always prepared and never rattled. He came from a family of four boys raised by a single mother. He told me a story of the time that his mother had saved up and bought a couple of gallons of yellow paint to re-decorate the kitchen. The boys woke up early and decided to paint her Volkswagen bus with the latex paint. He said “she went right past anger to tears. She was so angry and then she just started to cry. It took a while to get most of the paint off the windshield and windows, the rest of the car stayed more or less yellow.”

Ken passed away a few years later. It was a sad death for so young a man. I am not sure how he maintained his calm, perhaps it was such a huge opportunity for him compared to where he started that he was just grateful to be there. Or he may have been blessed with equanimity.

I think every startup above a certain size needs someone who can do “odd jobs” with an even temper. Especially as things get tougher in Silicon Valley, don’t underestimate the value of small kindnesses, a sense of humor, and cultivating calmness.

Update June 20, 2014: I think everyone on a startup team needs to do “odd jobs with an even temper.” It’s useful to bring on someone, even part time, who is detail oriented and can tackle the swarm of small tasks that need to get done.

Plan For Customer Reference as Much as Payment

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

JL Gray left a short but thought provoking comment on yesterday’s post  about customer reference, “Negotiate the Level of Reference in Parallel with Price and Others Terms and Conditions.”

Asking for references is something I’ve never felt especially comfortable with (gasp – what if they say no!) but can be crucial in getting your foot in the door with a new client. You’ve done a good job categorizing the types of references and describing how one might go about including the possibility of a reference in an initial contract. It seems like most of the above would work for product companies, but would be more difficult for service companies. Any thoughts on that?
Thanks Sean, JL

I wouldn’t start by asking for a reference, I would ask for feedback on the quality of your services and the business results that you enabled. If it’s positive you then have the basis for asking for a reference. If it’s negative then you have a chance to remedy and ask after they are satisfied.

We do most of our work with early stage software firms. They often have to wrap their technology in a thick protective blanket of services to protect their customers from jagged cuts by the rough edges of tomorrow. So to their early customers a young software firm can look as much like a consulting company as a technology company.

One of the key concerns that early customers have about a new company’s offering is not whether it works–they know “nothing new ever works” from Secrets of Consulting

The first line of defense is accepting that the new system willfail, possibly in several ways. When I find myself thinking, “I must have this change because I can’tafford failures,” then I’m in big trouble. If I can’t afford some failures, a new system won’t help. And neither will an old one.

Nothing new ever works, but there’s always hope that this time will be different.

What’s harder for them to assess is the level of commitment to persevere through the normal challenges of new technology introduction so that they don’t get a dent in their career. One of the ways that they make that assessment is your past performance and the best way to substantiate that is through customer references and testimonials.

I think that the suggestions I made yesterday would be appropriate for consulting to a large firm or a public firm. It’s very reasonable to address up front how you can talk about the engagement and ask them up front for an honest quote, endorsement, testimonial, or joint technical paper as an outcome. Certainly asking for a LinkedIn endorsement after a long engagement is very reasonable.

One other thing to consider is to have another member of your firm do a periodic ‘quality check’ on how the engagement is progressing, certainly at key milestones or deliverables. One reason to use someone else is that sometimes a customer may be more candid with a third party than they will with you directly (it’s also more credible when another member of your firm has a discussion about what is going well and less well as it implies a corporate commitment to customer satisfaction even if there are aspect of your performance that they are not happy with).

We will also do these “customer view” exercises when we are helping a new client build or verify a positioning. We not only interview customers but as many “near misses” or prospects that proceeded some way forward in the sales process and then dropped out as we can. We have uncovered examples of “reference customers” who were unhappy (and shouldn’t have been used as a reference until their issues had been addressed) as well as novel uses for a product, different perspectives on how to talk about a product and what the true benefits were.

I wrote about some aspects of this about a year ago in “Best Feedback From Early Customers is a Story” and built on Peter Cohan‘s formulation of four categories of customer success story (with the applicability to consulting engagements in parentheses).

  • Vision: what were their reasons when they gave you the purchase order (or statement of work).
  • Initial Implementation (perhaps first or second milestone in a consulting engagement) what are the initial benefits and problems they observed.
  • Consumed: what actually got used (what is the impact of your work on the overall project as it progresses)
  • Evolved: how did they ultimately use the solution (when they look back in a final project after action or they start the planning or kickoff  for the next project, how do they plan to use your services).

When you consider the introduction of a new methodology or a new project that is early in your support of a new technology, the reference that a customer can give you is often what will tip the balance for future work: both with that same customer and with other prospects with similar challenges.

An internal project plan that addresses not only how to manage the delivery of quality consulting services but their substantiation by your customer is therefore an important component of your long term business success.

The current economic downturn will only exacerbate technology firms’ risk aversion. This will increase the need for  references to complement your credentials and technical competence as demonstrated by technical papers and professional presentations.

Negotiate the Level of Reference in Parallel with Price and Others Terms and Conditions

Written by Sean Murphy. Posted in 3 Early Customer Stage, Rules of Thumb, skmurphy, Startups

Steve Bengston is the Managing Director of Emerging Company Services (ECS) at PricewaterhouseCoopers, a frequent explainer of the PWC MoneyTree report, and the host of “PricewaterhouseCoopers Startup Show.” He is also a nice guy who is knowledgeable and very approachable. He was interviewed by Anthony Nassar in April 2004 and had some good advice for entrepreneurs on negotiating a reference at the same time they are negotiating the rest of the contract.

I advise entrepreneurs to secure a referenceability clause when entering into beta agreements with customers, and perhaps refrain from entering into a beta agreement if the customer is unwilling to serve as a repeat reference with investors or prospects.

I have had three conversations in the last two weeks about the fact that there are many levels of reference, so I have put the following list together to document my perspective. It starts with an agreement with an individual (potentially at a company that refuses to allow any mention of their use of your product) and work up to a full endorsement with a logo.

  • Basic: Your customer agrees to take calls from new prospects. We normally specify a maximum rate (e.g. one a month, three per quarter) as this forces us to prioritize and not waste folks’ time on low probability events. You may mention their name, title, and company verbally and share contact info verbally or in an e-mail to a serious prospect.
  • NDA only: You can use name, title, and company on a slide that’s part of a presentation that’s delivered under non-disclosure.
  • LinkedIn: for service firms you can ask for a reference on LinkedIn.
  • Web Release: You can use name, title, and company on your website with a testimonial statement.
  • Press Release: You can issue a press release with an agreed upon quote or set of quotes.
  • Other (Public) Document: e.g. a case study, white paper, joint paper for a technical conference. Consider other ways that a happy customer can support you and help to evangelize your shared success. These documents normally sidestep an highly territorial PR or corporate identity or branding group who will pay more attention to what’s being messaged directly to media and analysts.
  • Joint Press Release: You and the customer issue a joint press release. This is a very big deal with a public company and can be difficult for an early stage firm to secure. We have helped clients do this but you need to start this negotiation as a part of the purchase as Steve Bengston advises above and be prepared to make concessions on price and other terms.
  • Logo: Using a customer’s corporate logo is normally involves more effort than securing an endorsement or testimonial from an individual employee. It carries with it a stronger level of endorsement. It may be NDA only, or agreed to on a case by case basis for a particular web page or collateral piece. This is a very strong endorsement that we don’t normally try and negotiate as part of an initial purchase, although it’s very appropriate for other kinds of joint ventures and partnering activities.

You should start discussing the form of a reference as soon as it becomes likely that you are involved in a serious evaluation. One way to approach this issue indirectly is to ask how they supported or acted as a reference for other suppliers/partners. With a large company you may want to pursue a two track negotiation model where you at least secure a private agreement from your direct customer to act as a reference and answer some number of calls and e-mails. Normally your customers will want you to be successful: they don’t want to pay for all of your development efforts but see them spread across other customers. If your prospect has never acted as a reference for a vendor/supplier/partner at least at a phone call or e-mail level or is unwilling to do so it may be wise to invest effort elsewhere: if you can’t substantiate your success it gets hard to talk about it.

We never ask for a positive reference as a part of a negotiation, only an accurate one: the prospect will more readily agree to tell the truth than shill for you and it’s up to you to convince them with your performance and results that your product is worth bragging about to strangers.

After the fact we try and encourage the customer to be as positive as they feel, but in their own words. We do this by interviewing them and ask them for their perspective on a client’s performance and results delivered. This can sometimes be negative, in which case the issues have to be addressed directly and forthrightly to the customer’s satisfaction. There can be a temptation to “put words in the customer’s mouth” whereby they regurgitate your preconceived advantages. We have come into the middle of several situations where this didn’t end well: when the customer was called by a prospect they offered their real perspective, not the press release phrasing. This created a serious perception mismatch that stalled or killed the sale.

Veterans Day

Written by Sean Murphy. Posted in skmurphy

“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
Edmund Burke

A thank you to all of the men and women in our armed forces who make this Silicon Valley oasis of rationality and innovation possible.

Pippin: It’s so quiet.
Gandalf: It’s the deep breath before the plunge.
Pippin: I don’t want to be in a battle. But waiting on the edge of one I can’t escape is even worse.
From the movie “Lord of the Rings: Return of the King”

I worked with a sales manager once, years ago, who was unflappable. We had a meeting with a customer who was irate and I was not looking forward to the meeting. I asked him how he stayed calm. He said “I don’t think you know this about me: I flew fighter combat missions in Vietnam. I understand what trouble looks like and how important it is to stay in the moment and not worry about what might happen.”

“There’s no such thing as a crowded battlefield. Battlefields are lonely places.” – Lt Gen Alfred M. Gray

I will close with a Veterans Day post my brother wrote in 2005, it’s as true now as it was then.

Today is Veterans Day, the day we honor those who have served in the military and lived. Memorial Day is the day we honor those who died while serving in the military. While that seems like a big difference, the reality is that chance plays a huge role in which soldiers live and which soldiers die. So to all you veterans out there, thanks for the willingness to put your life on the line for all the things I hold dear.

Update Sep-3-2012: The Quote Investigator looked at the opening quote on Nov-7-2011 and concluded it should be sourced to a 1993 article by Richard Grenier who was paraphrasing Orwell who may have been inspired by Kipling. It’s in the Wikipedia list of misquotations for Churchill as unsourced.

EDA Bloggers’ BoF at ICCAD 2008 Wed-Nov-12 4-6pm in Fir Room

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

As I mentioned last month, there is an EDA Bloggers Birds of a Feather at the 2008 ICCAD Conference.

It will be this Wednesday November 12, 4-6pm in the Fir Ballroom. It’s listed in the ICCAD program as an additional meeting: EDA Bloggers’ Birds-of-a-Feather

If you are interested in learning more about blogging or how it’s affecting the evolution of the EDA industry, please attend and lend your ears and your perspective. There will be plenty of time for a serious conversation with a number of bloggers from different points on the EDA compass–users, vendors, journalists, consultants…

Please contact me if you are interested in attending and want to put some questions or topics on the list for the open discussion forum.


  1. Promote blogging in EDA / ASIC Design Industry
  2. Allow bloggers to meet and get to know one another in a community of practice setting.
  3. Educate interested parties, readers and others interested in blogging.


  1. Opening remarks Juan-Antonio Carballo (our sponsor for the event at ICCAD)
  2. One Minute intro by each attendee: Name, Company/Affiliation, Blog; Can Suggest Issues or Discussion Topics.
  3. Three minute Lightning Talks
  4. Open Discussion

Confirmed presenters (in alphabetical order by last name)

Cost: Free (since this a related event at ICCAD , it will not require ICCAD registration to attend).

There is a mailing list for EDA bloggers at It’s is a very low traffic (1-2 messages a month) moderated E-mail distribution list for announcements and other notices of general interest to EDA Blogging community. It’s intended to help coordinate Birds of a Feather and other events for bloggers at EDA related conferences and other venues.

Most folks are choosing to talk about different aspects of what they have learned from blogging. This is a good cross section of folks and their talks should jumpstart a variety of interesting discussions in the two hours that we have.
Related links on this blog

Other Blog coverage:

Overnight Success

Written by Sean Murphy. Posted in 1 Idea Stage, 3 Early Customer Stage, skmurphy

Some thoughts on aspiring to “overnight success.”

  1. If you define success as making a lot of money quickly you should go into sales and cut out the middleman.
  2. You can buy one lottery ticket and make a lot of money. You can buy many lottery tickets every day of your life and never recover the cost of your lottery tickets.
  3. Most of the time the opportunity for “overnight success” is sold by folks who are interested in making a profit on your dreams without actually fulfilling them.
  4. Of all the sources of funds for an early stage venture, revenue is the most compelling demonstration of traction. Too many entrepreneurs view fund raising as an accomplishment in and of itself.

Quick Links

Bootstrappers Breakfast Link Startup Stages Clients In the News Upcoming Events Office Hours Button Newsletter SignUp