Cisco Presents Collaboration Technology as Sufficiently Advanced

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

I worked at Cisco for more than a decade in two stints between 1990 and 2003–taking time off from 1995-98 to work with a number of web startups–so I was intrigued to see John Chamber’s picture on the cover of the December issue of Fast Company. In the feature article by Ellen McGrit titled “Revolution in San Jose” Chambers deploys his personal sales skills and his marketing team in a well coordinated approach to “shape the battlefield” for new (or at least acquired and integrated) collaboration technologies from Cisco.

We have been early enthusiasts of web based collaboration technologies and have worked diligently to leverage them not only within our business but in our engagement model with partners and customers.  But their benefits can be oversold and they require considerable change in your internal processes and methods to take advantage of.

Just as the steam engine, the telegraph, electricity, and the telephone took decades to go from invention to full business impact, I keep George Meredith‘s guidance in mind when it comes to the perseverance needed to discover new technology applications and deploy them in production: “The future not being born, my friend, we will abstain from baptizing it.”

I was surprised to read “Cisco as an Emerging Enterprise 2.0 Case Example” by Jim McGee, an astute observer of knowledge management and collaboration technologies, that the Fast Company article as “…a well-documented case study that is an existence proof to other skeptical executives that the combination of Enterprise 2.0 technologies and the right organizational principles and practices can succeed.” A number of activities are described in the article but only three proof points are offered. The first is cited by McGee in his recap:

“The boards and councils have been able to innovate with tremendous speed. Fifteen minutes and one week to get a [business] plan that used to take six months!”

But I would be very cautious that this was anything more than hyperbole. It’s also only an intermediate result: how much revenue has the innovation actually delivered. The second and third proof points are offered by Ron Ricci:

“Across the company, Ricci says, fiscal 2008 saw “a tenfold increase in new projects.” And he points out that operating expenses have been trimmed from about 38% at the height of the tech boom to between 35% and 36% today: “We’re shaving 2% to 3% of profit off of every dollar of revenue we get in.”

But this offers scant proof of a new level of competitiveness: it’s always easy to start new projects, the real challenge is to get them to complete on time with the features that deliver new revenue. Offering as a cost reduction benchmark a comparison between the organization at the height of the bubble and today is unintentionally misleading at best: anyone who doesn’t have better expense control in place compared to a time of hypergrowth probably didn’t survive the dotcom collapse. Cisco’s market cap is perhaps one fifth of what it was then–and still about 25% below where it was five years ago. This sentence in the article goes to the heart of my misgivings:

“Taken to its ambitious conclusion, Chambers wants customers to remake their companies in Cisco’s image, a prospect possible only because of their dependence on Cisco technology.”

One of the hallmarks of a real test case would be some false steps and clear lessons learned. Most new technologies don’t work in the beginning and require a long period of experimentation and process re-design. This story is just too wonderful. And I say this as an everyday user of Office 2.0 technologies. Merlin Mann has some related thoughts in “Real Advice Hurts

Turns out that, as with a lot of injuries, the entirely sensible impulse to protect and baby a wounded area was the opposite of what Anne actually needed in order to fix the problem. So, by enduring the excruciating pain of chewing gum for just a few minutes, the muscles in her throat suddenly unclenched, and Anne’s pain went away forever.

The advice Anne wanted wasn’t the advice she needed. And, like we all eventually learn, the best advice you’ll get in life hurts like hell at the time. Because it has to.

A startup, lacking Cisco’s brand power, must tell real success stories that address the key changes that an organization must make to be able not only to use but to leverage a new technology fully.

On a side note I am not sure why they let Ellen McGirt take off with a “socialism” angle on their emerging management structure. Tom Malone presciently described how computer networks would lower the cost of coordination to the point that command-and-control management models would give way to cultivate-and-coordinate models in a 1991 article in Scientific AmericanComputers, Networks, and the Corporation” (1995 reprint here with graphics). There is a nice short interview with Malone by Peter Schwartz entitled “Re-Organization Man” in the July 1998 Wired that opens with these three exchanges that succinctly encapsulate the impact on collaboration technologies on organization structure and management:

Wired: You advocate for business leaders to “cultivate and coordinate.” How so?

Malone: The classic management phrase is “command and control.” If we believe that top-down, centralized management will become less and less desirable and less and less common, the question becomes, What could take its place? The notion of cultivation provides perspective from which we can legitimately think it’s fine if we’re not in control.

Wired: The other part comes from your idea of coordination science?

Malone: Right – part of which comes from the work of economists like Ronald Coase and Oliver Williamson. Compare two generic ways of coordinating any business transaction. One is to have hierarchical authority, a boss, who tells each person what to do so that two activities fit together. The alternative is to coordinate the same two activities as separate players in a marketplace. While with market-based coordination you are able to take advantage of economies of scale, you may have to do more negotiation. You almost certainly have to have more contracts or formal billing mechanisms. Markets allow you to have lower production costs, but generally result in higher coordination costs.

Wired: Yet your studies also suggest that infotech reduces coordination costs.

Malone: Exactly. In general, information technology reduces the costs of coordination, so what makes markets undesirable in some situations becomes less important.

Needless to say this is not socialism, it’s capitalism. Wired and Scientific American are not obscure publications, why Cisco didn’t credit Malone (or look back further and credit Doug Engelbart and J. C. R. Licklider) in addition to Gary Hamel is odd. The title of this post is a riff on Arthur C. Clarke‘s Third Law of Prediction: “Any sufficiently advanced technology is indistinguishable from magic.

Update December 17: Jim McGee and I have had some useful exchanges on his FastForward blog and he has left a question that I need to give some thought to:

What’s the most useful balance between tracking what Cisco is doing as both a large scale organization and a technology vendor with an interest in promoting Enterprise 2.0 as well as taking advantage of it? Perhaps the next question is how can we get Cisco to tell us more about what’s worked and what hasn’t worked in their early adopter efforts.

I welcome your advice and observations either here or on the original thread.

Update December 18: Michael Sampson‘s latest blog post “PTG Implements SharePoint Server to Improve Project Collaboration for PWC Sales” contains the following succinct advice:

The key takeaway though: if you want an independent opinion on which technology platform to use to support business needs, don’t ask a vendor-aligned partner for advice. That’s generally true of any vendor and its partners, so this isn’t a Microsoft-specific comment.

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

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.

Why NDA’s Are Not On the Startup Maturity Checklist

Written by Sean Murphy. Posted in 2 Open for Business Stage, Legal Issues, skmurphy

What follows is an e-mail thread converted into a blog entry. I got a suggestion on our contact form related to the Startup Maturity Checklist:

Some software companies will require you to sign an NDA before giving a presentation or sharing any other details about the company’s product. You may want to add this to the checklist.

My answer was that we don’t advise that approach. We do believe that employees should sign an invention and patent assignment form to protect internally developed IP but if you can’t give a basic demo w/o an NDA you are probably either giving the wrong demo or overly concerned.  I covered this a little bit in “NuSym De-Cloaks Part 2”  about two years ago:

  • Quiet mode (stealth mode): I am normally in favor of this, but if you are advertising jobs for folks and identifying yourself as associated with the startup in public forums it can’t hurt to to at least talk about the problem you plan to solve. Other opinions on “stealth mode startups”

He replied with some clarifications (link added, some identifying info removed at his request).

Thanks for the reply. I’m at a start-up in Santa Clara. I mentioned adding the NDA to your list, because I had talked to a few companies in the past who were selling ERP software, and they wanted me to sign an NDA prior to demonstrations.

These days as a startup you normally have to sign a larger company’s NDA form which tends to slow down the whole process for talking to a prospect to the point that it’s counterproductive.

Normally you only get into an NDA level presentation if you are discussing product roadmaps or other confidential information that would not be available in a standard datasheet or website briefing. What may be going on here is that they want to make the presentation seem special because it’s “under NDA.”
How did you come across our site?”

I came across your website and saw the section on bootstrapping breakfast gatherings. I would like to attend, but I do not have a software start-up company.

We get a number of technical consultants (some of whom are hoping or planning to add a software offering to their mix) as well as engineers who are considering striking out on their own. But we tend to have serious conversations that are most useful to folks already in a startup or close to starting one. You are welcome to attend if you have an entrepreneurial itch. Each meeting is different because we get different people attending with new information and new challenges.

With your permission I would like to convert this e-mail thread into a blog post (I would not name you or identify you by company, but mention that the startups that are calling on you ask for an NDA first). Thanks very much for your question and follow up, I will use it as an excuse to write a short blog entry if you don’t mind.

Please go ahead, but don’t use my name or company name. Thanks for taking the time to answer my question and for the various links in the email. I’ll check them out.

I welcome comments, questions, or suggestions on our Startup Stages Model or on other challenges you face bootstrapping your startup. Please use the contact form or e-mail me directly.

“The Check is NOT in the Mail” this Friday at Bootstrappers Breakfast

Written by Sean Murphy. Posted in 2 Open for Business Stage, 3 Early Customer Stage, Events, skmurphy

Compare notes with entrepreneurs who eat problems for breakfast.At a Bootstrappers Breakfast you can:

  • Take part in a serious roundtable conversation among bootstrapping entrepreneurs
  • Compare notes and exchange ideas
  • Learn from others’ mistakes
  • Find potential business partners and co-founders

The Check Is Not In The Mail


Len Sklar joins us in Milpitas this Friday, he will make a short presentation on why “The Check is Not in the Mail” and answer questions on effective approaches to getting paid in full, on time, at less cost and without losing valued customers.

Len came to our March 7 breakfast and facilitated some very well received interactive exercises: several bootstrappers in turn took the role of a delinquent customer and Len demonstrated a variety of low key techniques to move beyond a current deadlock.

One of the key points he made was that you have to prevent payment issues before they start by being clear in writing about your credit terms and polite but no-nonsense once a slow payment situation starts to occur.  To many entrepreneurs are afraid to pick up the phone and see if it’s a quality problem or a slow payment problem, letting the situation fester until they become angry and less effective or staying ignorant of real defect in their offering that need to be addressed.

Here are some comments from Amazon reviews:

“Author Leonard Sklar knows his stuff. As well as ‘what to do’, Sklar is right on in covering the areas ‘you shouldn’t go’, or more particularly, waste your time.”

“Definitely a great read/reference for the beginning entrepreneur. I’ve learned quite a bit from it.”

“Any small business owner has faced reluctant-to-pay-in-full clients. Author Leonard Sklar has some great tips about asking for money firmly without pissing people off–which often is enough to get them to pay in full.”

Bootstrappers Breakfast Friday Aug 8

RSVP and bring your questions Friday August 8 to the Bootstrappers Breakfast.

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Paul Graham’s Six Principles for Making New Things

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, Customer Development, Rules of Thumb, skmurphy

This article compares Paul Graham’s “Six Principles for Making New Things” with Bob Bemer’s “Do Something Small But Useful Now”,  Gary Hamel’s Innovation Hacker, and Peter Drucker’s list of seven places to search systematically for opportunities.

Fostering Technology Adoption: Early Customers & Early Revenue

Written by Theresa Shafer. Posted in 2 Open for Business Stage, Customer Development, Startups

Software companies typically have to convince prospects to adopt new technologies based on their shared history, their service track record, and their ability to accurately predict and deliver real results that overcome the cost and friction of adopting new tools and methodologies. There are a number of lessons we draw on to help startups fostering technology adoption to attract their first paying customers.

Startups Should Sign Their Work

Written by Sean Murphy. Posted in 2 Open for Business Stage, 3 Early Customer Stage, skmurphy

A great post by Tim Bonneman on “Startups Without Face Nor Name

I always find it surprising:

You sign up for a beta invite. Time passes. One day, you get an email after all stating the app, project whatever is now live. You sign up, you log in, and then, when you try to see who’s behind all this — nothing. No names. No pictures. No (real) address. No background info whatsoever about the founders or the team or the management or the backers or the first customers or their mother or their cat. Nothing. Nada. Zilch.

Sorry, but what do you think this is? Hide and seek?

I think it stems from a fear of failure. But unless you commit how can you expect other folks to spend time (and ultimately bet a chunk of their business and/or career) working with your application. I am coming to the conclusion that “stealth mode” as currently practiced by many firms (often a variation on “I’ve got a secret”) gets the team off on the wrong foot. I think it’s better to tell what truth you can and to say who you are.

Dharmesh Shah wrote about this in “Stealth Mode Schmealth Mode: the Real Reasons Startups Don’t Talk

  1. Lack of Direction
  2. Lack of Focus
  3. Lack of Commitment
  4. Lack of a Solution
  5. They Have a Secret


Before you decide to clam-up and guard your “super secret business idea”, make sure that you have something worth guarding, and that it’s in your best interests to do so. More often than not, you’re better not being coy, and doing some talking.

Silicon Valley: Not as Nuts as 99…Yet

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

So we are starting to pump a little hot air back into the bubble every week now. The streets of Silicon Valley witness young entrepreneurs looking for department store Santas venture capitalists to listen to their list of needs and make their dreams come true. It’s “not as nuts as 99” but not as sane, or dour, as 2003. Roger McNamee blogged for the better part of 2004 on “The New Normal” with this as his inaugural post:

Wake up and smell the coffee. This is not your father’s economy. And it’s not the boom that inflated our expectations and then exploded. But it’s also not the doom and gloom we’ve been mired in for nearly three years now! So, wake up. Pull yourself together. Get on with it. With what you ask? With the rest of your life. It’s a bright, fresh world full of opportunities. I know that runs counter to many of the opinions all around us, but it’s true, and I can show you why. It’s true for the investor, the entrepreneur, the CEO, the unemployed, and the human being seeking balance. This blog will be dedicated to insights and discussion about life, business, and investment in what I call The New Normal.
Please join in!

Now I regularly have conversations that remind me of 1997-2000. I am routinely admonished that “the old rules no longer apply” and advised that successful firms spend much of their treasure on PR social media and viral marketing (regular marketing is a waste of money since viral marketing is free). YouTube’s 1.6 billion dollar exit is the exemplar burned in 10 mile high neon letters into the back of everyone’s retinas.

This is not a lament nor a longing for the early 90’s (or early 80’s), now is the best time to be alive and an entrepreneur. It’s a wish that more firms would aim for creating value for their customers.

Note: This is cross-posted from  “Report from Silicon Valley” on FunMurphys, my brother’s blog.

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