Nusym De-cloaks 4

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

Venk Shukla, CEO of Nusym, commented on Nusym De-cloaks 3 on Dec 4

We had met a long time ago but lost touch afterward. The points you make about website credibility are valid. We will measure the information we put out against this criteria once we decide to emerge from the shadows. Thanks for paying attention, anyway.

I think Nusym has emerged from the shadows because 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.

Veteran EDA user and consultant Sean Murphy brought Nusym to light earlier this year in his blog, which covers a variety of topics including EDA. Murphy has some interesting comments about the claims made in Nusym’s web site.

See also Nusym De-cloaks from Oct 21 and Nusym De-cloaks 2 from Oct 22 for a critique of the site and some suggestions for other startups. But the next sentence shows the difference between a journalist blogging and a consultant blogging: Goering picked up the phone got an interview.

Intrigued, I put in a call to Venk Shukla, Nusym CEO. I asked him about the claim that Nusym’s technology will be as revolutionary as logic synthesis. “With logic synthesis, instead of focusing on individual gates, people started focusing on the outcome, and the tool did the rest,” Shukla said. “With verification also, our goal is to make this more of an outcome-oriented tool than the input-oriented effort that people have today.”

Shukla said that Nusym is focusing on “simulation or the tools that work off simulation,” and is just now going into beta sites with its technology. The real value, he said, is not so much simulation speed as completion and coverage. “What’s important is how much more quickly you can complete simulation,” he said.

Certainly the folks who started O-in and Silicon Sorcery would agree, as well as the folks at Verisity and Systems Science. It’s actually hard to argue with. Richard Goering continues

What else do we know? Google Nusym, and you’ll find documents that name Woodside Fund, Draper Richards, and Silicom Ventures as venture capital investors. Shukla said that Lucio Lanza and John Sanguinetti are investors in Nusym, and he said that about $6 million has been raised so far. Nusym currently employs around 20 people, he said.

Goering has some interesting speculation on what Nusym may really be doing, and he then offers another quote from Mr. Shukla.

“What attracted me is that this is the first genuinely good idea we’ve heard in verification for a long, long time,” said Shukla. “There’s been no innovation in that space for the last 10 to 12 years, and the problem is getting worse.”

I think that there has been a fair amount of innovation in the verification space in the last decade. It’s an odd position for Venk to stake out, that there hasn’t. It also neatly sidesteps the specifics of the insertion point in the flow or the actual nature of the benefits they hope to deliver. Cutting time to achieve high verification coverage is a generic promise at this point. For example, Cadence, a potential exit for Nusym, makes the following promise for their Incisive platform:

The Cadence Incisive® platform delivers the fastest and most efficient way to verify large, complex chips. It ensures that your product will meet specifications, ship without defects and arrive on time by removing productivity, predictability and quality risks in the development process.

Ann Germany and Shankar Hemmady, writing at EDACafe on “Verification Languages: 3 points to ponder beyond which one?” list this as their second point:

2. Is there a way out of this mess?

Deploying thousands of simulations, directing resources across geographically dispersed teams and achieving total coverage across the block, chip, system and project levels are today’s verification reality. Exasperating isn’t it? With modern SoC’s consisting of one or more processors, embedded software, instruction and data caches, large register sets, multiple buses, dedicated hardware accelerator, and a dozen or more interfaces to industry standards, simply keeping track of where we stand and what comes next becomes a problem on its own. How can we capture the verification process and what can be done to automate this process? What if the specification changes in the middle of the project? What if a critical bug is identified a week before tapeout? How can we manage the verification process to gain control over this flood of information?

Nusym should consider situating their brand promise in the realities of design and verification as outlined above. This is also an approach other software startups should consider as well: don’t try and position yourself as bringing fire to the savages, acknowledge the challenges and real pain your prospects are experiencing and offer a specific measurable benefit that differentiates you from other potential solutions.

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.

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.

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.

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 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.

Nusym De-cloaks 2

Written by Sean Murphy. Posted in EDA, Startups

Some follow-ups to yesterday’s post on Nusym

  • Why de-cloak? Don’t most stealth startups emerge? Yes, at least according to Google and EET. But a good Star Trek allusion (or is it Harry Potter?) always enriches a blog post and the Duke “invisibility cloakdemonstration announcement had recently gone out over the mojo wire, so it was fresh in my mind. Technically I think you have a cloak of invisibility and boots of stealth, so a stealthy start would de-boot (debut?).
    • you might wonder how they could have been “on my radar” if they were in stealth, but think Jorn.
  • 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 at least talk about the problem you plan to solve. Other opinions on “stealth mode startups”
  • Other “stealth mode startups” that have emerged in 20006 according to EE Times:
    • Gear6 (FYI their news page allows you to enter your E-mail to be notified of new developments).
    • Takumi Technology (they “emerge from stealth” here).
    • Micro Magic (reborn in stealth after being acquired by Juniper; their CEO believes “What separates Micro Magic from other EDA companies is that we are actually designers.”)
  • The Company page contains a paragraph that looks to be more appropriate for B round solicitation than a customer oriented briefing:
    • The company’s technology is based upon ground-breaking research done at Stanford combined with 60+ years of design and verification experience of the founders. The company has attracted funding from individuals that are legends in the EDA industry and Silicon Valley and from venture capital firms prominent in the EDA industry. We have assembled a team of outstanding technologists and a seasoned management team.
    • You have to be careful that you don’t base your customer briefing on your funding pitch and instead work from scratch on customer pain points. I guess the counter-argument is that it establishes their financial viability.
  • I got an e-mail from Howard Landman (he of the Law and Lemma) that pointed out Patterson’s Precept was coined by “David Patterson, co-author of Patterson and Hennessy computer architecture book, professor at U.C. Berkeley.” I have amended the original post to reflect this.

Details as they frolic in plain view but beyond understanding, like the invisible ineffable cues that a school of fish use to synchronize their movements.

Bill Trenchard at SDForum Startup SIG Oct 16, 2006

Written by Francis Adanza. Posted in Events, Startups

Last night, I attended an SDForum Startup SIG featuring Bill Trenchard, CEO of LiveOps.  Bill is a prime example of a serial entrepreneur.  In 10 years he has been a founder and CEO of three successful start ups.  One of which was Jump Networks, Inc., that was acquired by Microsoft in April 1999.

Bill said that he had learned to do the following things routinely:

  1. Do not be afraid to ask for help
  2. Learn from failure
  3. Understand your limitations

One experience Bill shared was from when Jump Networks started taking off.  He received a call from Microsoft stating they were interested in buying his company.  At the time, Bill had very little experience with negotiating.  He turned to his advisory board for help.  The most important thing he learned was, “no matter how big the deal is, sometimes it is best to walk away.”

Another experience Bill shared was trying to start a company that provides software for PDA’s.  After designing the software, he realized that the market did not exist.  The problem was, at this time, there were only 1 million PDA users.  Essentially, Bill had never failed before and he became depressed.  Bothered by thoughts of being a one hit wonder, he evaluated his experience, learned from his mistakes, and tried again.

“When you start a new company as an entrepreneur or a founder, you need to recognize that they are building something bigger than yourself.”  Good CEO’s can handle pressure and have experience in many aspects of business: Marketing, Finance, Sales, Engineering, etc.  CEO’s must have the ability to multi-task and make decisions.  “You need to ask yourself if you truly believe you are the one for the job, it is okay to be the inventor and not the entrepreneur.”

For more background: Bill has an extensive video clip set in the Cornell eClips collection (registration required, but this transcript matches last night’s talk pretty closely if you are interested); he was recently profiled by BusinessWeek as one of dozen technology entrepreneurs under 30.

Office 2.0 Tools for Consultants

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

Attending Office 2.0[1] in San Francisco, we discovered some useful tools for consultants and small teams.

What is Office 2.0? Office 2.0 tools are collaboration tools that you can connect to from anywhere. They are perfect for virtual businesses or small teams. Most are sold as software as a service (SaaS) and for a low monthly fee you get web access to the tools. All that is needed on your machine is a web browser.

Here’s what I found interesting:

  • Site Kreator – pick a template and get a basic website up and running very quickly. You don’t need to get a web designer or know HTML, Java, etc. It supports wiki, blogs, and forms. Everything is click and point.
  • Another way (and the one we selected) is WordPress. We did use a web designer, Dave Horner from Silicon Ridge. But we picked a template and he quickly built our website. I can build new pages, changes pages, or add blog post without coding.
  • Invoicing might be a consultant’s least favorite thing, but it’s impossible to get paid without it; check out FreshBooks.
  • Do you need a part time admin to put together conference material? Work on your website? Virtual admins are a great way to go. They charge by the hour and can answer your phone or perform other tasks you need.
  • One area we have been hunting for quite a while is a shareable calender. Our team is virtual and scheduling appointment used to take many emails. We have been using with WebEx WebOffice and quite happy with it. It is more expensive than many we tried but it fits us the best, so far.
  • Podcast/RSS for e-newsletters or training. Podcast and voice in general allows you to make an emotional connection with your audience or prospect. This one is still under construction for us.
  • We use wikis (e.g. from Central Desktop, EditMe, Jotspot, and Socialtext among others) with all of our clients. A wiki provides a private work space which we can leave behind after our engagement is over and they cut down considerably on having to e-mail attachments. We have used it for collaborating on datasheets, web site mock-up, backgrounder and other strategy and planning documents.

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

Krishna Kolluri at KASE’s Success Stories from Serial Entrepreneurs

Written by Francis Adanza. Posted in Startups

Last Tuesday, October 3, was the first of four seminars in the KASE Entrepreneurship Academy.  One of the featured speakers of the evening was a serial entrepreneur by the name of Krishna “Kittu” Kolluri.   Kittu was Co-Founder of Healtheon/WebMD, an on-line resource for heath information.  While at WebMD he was responsible for key operational and business development roles. Kittu was CEO of Neoteris, the leader of SSL-based Application Security Gateway market.  Under Kittu’s leadership, Neoteris excelled and grew considerably despite adverse market conditions.  Neoteris was acquired by Netscreen and Kittu became GM of Netscreen’s Secure Access Products.  Subsequently Netscreen was acquired by Juniper Networks and Kittu became VP and GM for the Security Products Group at Juniper Networks.

From Kittu’s presentation, I learned:

  1. The Importance of a Strong Vision & Values
  2. The Value of Marketing
  3. Understanding Your Customer’s Needs

The Importance of a Strong Vision & Values

In order to succeed, start ups must develop and follow a sustainable, strategic vision, and they must offer compelling value to customers.  All technology driven companies need a compelling value proposition.  Compelling value is determined if your technology is revenue enhancing or cost cutting.  Furthermore, you must deliver a “must have” solution and demonstrable return on investment.  Three questions that can help you determine if you solution is compelling is:

  • What is your benefit?
  • Can you give your customer a reason to believe?
  • What is the dramatic difference?

The Value of Marketing

Most people think marketing is designing colorful fliers and brochures.  Collateral is an important aspect of marketing, but start ups need to understand that strategic marketing is mostly about trial and error.  Kittu asks, “where do you add value and how will you evolve?”  Often start ups try to sell to Fortune 500 companies, but they lack credibility.  Put yourself in your customers shoes.  They fear you will not be around the following year.  Furthermore, they know that nothing new ever works, so they want validation from another customer who can verify your technology.

You can overcome the challenges of building credibility by influencing the influencers.  Influencers are analyst, trade press, business press.  Talk to start ups in your target market.  You will most likely find people intrigued by new technology and that are willing to help you refine your product.  It might be that you are targeting the wrong people in the company.  If you are not getting the traction you anticipate don’t give up on the company, try the actual end user.

Understanding Your Customer’s Needs

How will you best service your target markets? Take care of the customer. Give them what they need, a product that works on its own and seamlessly with other applications.  World class customer care is vital, make customers feel like they got more than what they paid for. Kittu states “customers will tolerate mediocre technology, but will not tolerate mediocre service.”  The customer is the ultimate stakeholder.  You must have a clear channel of communication within the company.  This means vertically within teams, and horizontally across them.  Make it easy for the customer to contact appropriate team members and obtain accurate information.

It is hard to take criticism about your baby.  Inventors pour hours into developing technology trying to make the perfect application and forget to talk to prospects.  Instead of designing something you think some one will buy, go and ask potential customers what they want to buy.  Entrepreneurs, you can’t fall in love with the technology and ignore the marketing.  Get out there, talk to strangers, and focus on customer care.

Mike Van Horn on “Are You Ready for Growth?”

Written by Sean Murphy. Posted in checklist, Startups

Mike Van Horn has a lot of good articles on his small business website. One in particular that’s worth reading is “Are You Ready for Growth?”  Here are some highlights:

  • The better teams you can build… the faster you can grow.
    People who grow companies rapidly know how to put a good team in place, then move on to the next thing. They become a leader of independent teams.
  • The better you use your time–the faster you can grow.
    Invest your time strategically; be less concerned with saving time or managing time.
  • The more you think things through ahead of time–the faster you can grow.
    That means planning, including strategic plans, action plans, and project plans, with built-in review and accountability.
  • The savvier your advisors–the faster you can grow.
    You let go of the “lone ranger” approach to running the business. As your business grows, get advisors who are one step ahead of you.
  • The more you insist on top performance… the faster you can grow.
    Do not let mediocre performers dictate your rate of growth, whether they are employees, customers, vendors, or professionals.
  • The more knowledge you can get out of your head and the more systematized you get–the faster you can grow.
    Create manuals, checklists, and training seminars that teach employees all the magical things that you think only you can do. Then you and your people can focus attention on the big, creative challenges.

The first rule is “The more you can let go, the more you can grow.

Welcome Entrepreneurs!

Written by Sean Murphy. Posted in Startups

Welcome Entrepreneurs

This blog is dedicated to entrepreneurs at any stage of their journey:  as individuals, in teams, and collectively.  We all hope to create a better world for our customers, our employees, our stakeholders, and our children.

Our Focus: Finding Early Customers For Emerging Technologies

Our focus is helping startups find early customers for emerging technologies. This is very different from the traditional sales and marketing at established firms. Correctly identifying early customers who can be references to others is key to introducing emerging technologies.

Although emerging technologies change the rules and often enable far reaching growth most early adopters are focused on near term risks and benefits, and it is to those concerns entrepreneurial teams need to speak to get a foothold. The decision to act as a “beta” software site or early user of new software tools often resembles a hiring decision (does the prospective customer want to “hire the team”) more closely than a technology adoption decision.

Emerging technology marketing is a distinct domain from classical product marketing, most of the traditional market assessment techniques are not effective: focus groups, surveys, etc…

Emerging Markets Require Key Commitments

Emerging markets require a strong commitment by the founding team to

  • appreciating the prospective customer and customer’s view,
  • rapidly evolving the product specification in response to feedback and customer experience,
  • ongoing refinement and delivery of customer focused solutions.

A Blog Is a Dial Tone For a Website

As to why I am adding a blog to this website I was very impressed by a blog entry I read in August of this year by Tim O’Reilly titled Round 2: Dial Tone

New applications often start out requiring operators, but eventually move towards dial-tone. For example, you can look at blogging as the “dial tone” equivalent of creating a web site. For ordinary folks (not most of my readers, but non-technical folks), creating a web site was something that required an operator. You went to a web design shop or an ISP and had them do it for you. The blogging revolution, the wiki revolution, the MySpace revolution, the CyWorld revolution, are really about providing a kind of self-service dial-tone for creating a web presence and community.

I think a blog also acts a dial tone for a website in that it signals a commitment for interaction and participation on the part of the authors. And that’s certainly the case here.

O’Reilly describes his Round 2 series as occasional postings around the theme that patterns and ideas recur. He closes the “Dial Tone” post with:

Once you frame the problem in this way, you understand that one of the challenges for IT departments and companies used to the IT mindset is to get the operators out of the way, and to build new processes that let users do the work for themselves. You also can ask yourself, where is dial tone going next?

I like that “Round 2” captures the sense of recurring business trends that can act as guides: you do not need to innovate in all aspects of your startup, making the technology work can be differentiation enough. I welcome your comments and a chance to learn more about your startup.

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