Every few days I post a quotation on www.twitter.com/skmurphy that I think will be useful or thought provoking for entrepreneurs. On the last day of the month I collect these quotes for entrepreneurs into a blog post and add some context. For a list of all my blog posts that are related to quotations see https://www.skmurphy.com/blog/category/quotes/ Here is the roundup for June. Enter your E-mail if you would like Feedburner to deliver new blog posts to your inbox.
Archive for June, 2009
Michael Schrage offers some useful insights on innovation: he stresses the need for collaboration both within the startup (or new product team) and between the startup and its early customers.
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.
“Bootstrappers Breakfast” was registered June 23, 2009 as a trademark of SKMurphy, Inc. “For education services, namely providing live and on-line seminars, workshops, and mentoring sessions in the field of entrepreneurship.”
No claim is made to the exclusive right to use “breakfast” apart from “Bootstrappers Breakfast.”
Details as they unfold: we will do six breakfasts a month starting in July.
Update Jul-1-09: we wanted to thank Athol Foden of Brighter Naming for his advice on trademark strategy and assistance in navigating the registration process. We were pleased to retain him and would encourage other startups to do likewise. We filed our application November 7, 2008.
Rajeev Madhavan has founded three companies, ultimately taking Magma Design Automation public. We cover his background and lessons learned as a successful serial entrepreneur.
Craig Shirley, VP of Sales at Apache Design Solutions has attended a couple of Bootstrapper Breakfasts™ in 2009 and always gives very practical advice on sales and negotiation issues. No surprise, he has more than two decades of experience in sales and sales management and has negotiated more than 100 deals with key accounts. He is joining Tuesday June 16 in for the Sunnyvale breakfast to talk about his experiences, some lessons learned, and an answer any questions on deal and negotiation situations attendees may be contemplating or in the midst of.
I sat down with him earlier this week and got a preview of coming attractions. He advises startup teams that preparation is essential and the negotiation with a key account begins with the very first meeting. Craig will outline an approach to negotiating with major accounts that focuses on maximizing both revenue and profit over the lifetime of the relationship, something that bootstrappers need to manage very carefully. His focus will be less on tactics and more on how to differentiate your product on features other than price.
He believes that a startup should strive for two goals in negotiations with early customers:
- Maximize near term Average Selling Price / Unit Price
- Maximize long-term Annual Contract Value
Craig outlined three key requirements for success:
- You have to target mission critical problems that the prospect is facing, preferably on more than one mission critical project or initiative.
- You need to be clear on what aspects of you product provide them with compelling value, value that they are not able to gain from alternatives/competitors (don’t forget that the status quo can frequently be a competitor in its own right).
- You need to align your engagement and sales efforts with the customer’s buying process, typically by identifying a compelling event or upcoming unavoidable deadline (e.g. taxes are due, industry transition, new project starting).
We are running five breakfasts a month now, if this Tuesday isn’t convenient or gets full, consider another:
- First Friday of the Month: 7:30am-9am at Hobee’s in Palo Alto
- Second Friday: 7:30am-9am at Omega in Milpitas
- Third Tuesday: 7:30am-9am at Coco’s in Sunnyvale
- Third Friday: 7am-9am at Boudin Bakery at 4 Embarcadero Center in San Francisco
- Fourth Friday: 9am-10:30am at Red Rock Coffee in Mountain View
Update July 2: Craig’s slides are available here
Slide is copyright Craig Shirley 2009
- ASP = Average Selling Price
- ACV = Annual Contract Value
I spent today at the Hadoop Summit 2009 (hadoopsummit09). Although I paid my $100 registration fee in advance I made the mistake of getting there a few minutes after 9am with the first keynote underway and joined a thick knot of hangers on in one of the doorways to the ballroom (don’t tell the fire marshal). Finally at 10:30 they broke the wall down that separated the adjacent salon and expanded the ballroom.
The first keynote I listened to was a long sales pitch from Sun. I don’t know why you would give a room full of hundreds of engineers and scientists a basic sales pitch for cloud computing, but it was a waste of time for both Sun and the audience.
Enough whining, the rest of the conference was very thought provoking, some quick impressions:
- If Moore’s Law has delivered roughly a million fold improvement in computing performance in the last 40 years, Hadoop, Zookeeper, and similar orchestration layers allow another thousand fold improvement for suitable problems.
- Amdahl’s Law trumps Moore in many situations but some of the problems now being solved were intractable, at least for a reasonable budget, if not unthinkable five or ten years ago.
- To put a million fold increase in perspective, that’s a lifetime of calculation (40 hours a week, 50 weeks a year, 40 years working lifetime) compressed into 288 seconds, 12 seconds shy of five minutes.
- The ability to orchestrate a thousand to ten thousand machines on a problem (admittedly you need a suitable problem) means we are looking at project CPU budgets measured not in CPU years but CPU millennia.
- This is not entirely new: certainly there were DoD and NSA projects working at that level with specialized hardware two and perhaps three decades ago. Pixar announced in 2006 that their movie Cars took 23 CPU millennia to produce, again with specialized hardware.
- But Amazon EC2 uses commodity hardware and makes CPU hours available for a dime with a credit card. Admittedly a CPU millennium will set you back roughly $876,000 at current prices.
- Several requests or comments on the need for fractional hour billing, which I took as at least anecdotal evidence for good parallelization of a lot of the tasks.
- Amazon reminded us that they are quite skilled at accepting (and shipping back) physical media containing data sets for their Elastic Compute Cloud.
- “Never underestimate the bandwidth of a station wagon full of tapes hurtling down the highway.” Andrew Tanenbaum
- The show reminded me a lot of INTEROP 88, the year that Interop transitioned from workshop to trade show with a few dozen vendors at the Santa Clara Convention Center. The vendor ecosystem for Hadoop is not yet as diverse, but the focus was clearly on system administration and technology, with the applications discussed in highly technical language. The crowd seemed to be researchers and system programmers for the most part, but the potential business impacts are starting to become a lot clearer.
Postscript June 14: Jinesh Varia made a remark during his keynote about “please check out our security whitepaper, some firms are building HIPAA complaint applications” so I did and found this paragraph which clearly telegraphs their strategic intent to move to the heart of enterprise applications:
Certifications and Accreditations
To provide customers with assurance of the security measures implemented, AWS is working with a public accounting firm to ensure continued Sarbanes Oxley (SOX) compliance, and attain certifications and unbiased Audit Statements such as recurring Statement on Auditing Standards No. 70: Service Organizations, Type II (SAS70 Type II). AWS will continue efforts to obtain the strictest of industry certifications in order to verify its commitment to provide a secure, world-class cloud computing environment. The flexibility and customer control that the AWS platform provides permits the deployment of solutions that meet industry-specific certification requirements. For instance, customers have built HIPAA-compliant healthcare applications on AWS.
I don’t know how I overlooked Andrew Chen’s “Your Ad-Supported Web 2.0 Site is Actually a B2B Enterprise in Disguise” He succinctly outlines some hard facts that many founders of media startups spend a year of their life to learn:
Brant Cooper and I are doing another conference call for entrepreneurs actively engaged in customer development. We facilitated one on June 3 and have another planned for 1pm Thursday June 18. To participate, you must:
- be actively engaged in practicing customer development principles;
- clearly articulate one or two issues that you would like to discuss;
- have a Skype address to be able to take part in a parallel text chat to the conference call.
We are facilitating another website peer review Thursday June 11 at PATCA. At our April 17 website peer review, we were asked by Jerry Rice to produce a similar event for PATCA and were happy to oblige. Theresa is a member of PATCA and regularly attends their events. She blogged about “Three Reasons to Attend a Website Peer Review” in April and her points are still valid:
We have done three other events like this in conjunction with sponsoring organizations like Innovation Denmark, SDForum, or Startup Epicenter. Participants have told us that they had three benefits.
- In reviewing another firm’s website and providing concrete feedback, they developed new perspectives on how prospects and other visitors might assess their own site.
- There are always so many things that can be done to improve a website it can be an endless sinkhole of time. Helping a peer with their site helped them identify the most important improvements to make next. Also some of the feedback provided by fellow CEOs were directly applicable to their own.
- They learned about a number of free and low cost tools and resources that are available for website design and analysis.
Details about the event:
- Date: June 11, 2009, 6:00-9:00pm
- Pre-registration Cost: $20 for PATCA members, $25 for non-members, $20 guest(s) of members, and $20 for first-time attendee
- Register here : advance Registration by June 8 strongly encouraged; register online by 5:00 pm June 8 to guarantee a meal. You can also call or email the PATCA office for reservations: 800-747-2822 or email@example.com.
- Dinner included:Oven roasted tri tip with cabernet demi glace OR Sauteed Portobello mushroom and sun-dried tomato risotto in a Parmesan cream sauce
- Location: Pruneyard Plaza Hotel, 1995 South Bascom Avenue, Campbell, CA 95008
We have been invited to join the “EE Times Trusted Sources” list of blogs. At the discretion of EE Times editors a blog post may be selected from one recently published and a capsule summary placed in their “Trusted Sources” area. EET has characterized the section as follows.
This section features posts from around the Web by authors with passion, integrity, authority, and community support in our industry. Our Trusted Sources are not only prominent industry bloggers specifically identified by EE Times — but also influencers who have earned the trust of our community. With Trusted Sources our goal is to provide the platform to activate and engage in dialogue, and nurture conversations for all participants–beyond just our own voices
A link to the full blog post will be appended. They have selected the recent “Interview With John Sanguinetti” post for our first appearance there.
Robert Dang, partner and attorney at Fortis General Counsel, http://www.fortisgc.com returns to our Bootstrapper Breakfast™ this Friday, June 5 at Hobee’s Palo Alto (4224 El Camino Real) at 7:30 am. Robert will answer questions and discuss the legal issues facing entrepreneurs in today’s economy. Fortis is a startup friendly firm and endorsed by attendees.
Rob’s practice focuses on providing general counsel services to technology startups, with an emphasis on corporate finance, mergers and acquisitions, technology licensing, corporate governance and general business counseling. Rob currently serves on the Executive Committee of the MIT/Stanford Venture Lab (VLAB). Have your questions ready for a great discussion.
Join Other Entrepreneurs Who Eat Problems For Breakfast. RSVP now – this location fills up.