Exciting news this morning from Cloud content management and collaboration company Huddle. The UK founded but now US/UK headquartered company is this morning announcing a Series C funding round to the tune of $24M. The round takes Huddle’s funding to $40 million in the five or so years since it was launched.

Huddle is an interesting company – it sits in a similar space as Box but has generated less Silicon Valley buzz – partly because the Huddle founders, Alastair Mitchell and Andy McLoughlin are British and hence stereotypically a little reserved (at least compared to the hyper-exuberant Box CEO Aaron Levie). While not being as flashy as the competition however, Huddle has quietly been building momentum – I wrote about their previous all-of-Government deal for the UK government, but outside of that Huddle boasts of serving over 100000 organizations including deployment within 80% of the Fortune 500 companies – some big names using Huddle for at least part of their operations includes Diageo, Kia Motors, Procter and Gamble, NASA, Sodexo and Unilever.

Interestingly enough, Huddle’s Series C is a huge $10M more than Box’s Series C. While these sorts of comparisons are, at least to an extent, some kind of Freudian penis envy game, it’s fair to say that the number, relative to Box’s number, is quite an achievement given the stronger awareness that Box has – at least in Silicon Valley. I surmise that this has something to do with Huddle’s success globally, including the high profile UK Government deal – these wins give VCs faith that Huddle’s proposition can scale geographically.

Huddle is trying to differentiate itself in the content collaboration landscape – a very busy place with both facebook and Google entering the market and joining Box, Dropbox, Syncplicity (recently acquired by EMC) and many others. Part of this differentiation comes from something I wrote about previously, their “intelligent file synchronization tool”, a tool that utilizes aggregate data from employee usage patterns to determine which files are most relevant to users and these files are fully synchronized between devices – the idea being to save bandwidth and precious storage on mobile devices and also to offer users a faster collaboration experience.

Content collaboration is a massively hot area – and already we’ve seen some M&A activity that will only increase over time. Both Box and Huddle are well places to provide a consistent and credible enterprise story in the space and they’re both building successful businesses. Box looks set to IPO in the next 18 months or so which will heat things up even more. As for Huddle, they’ll use this money to increase head count and continue building a customer base globally.

(Cross-posted @ The Diversity Blog - SaaS, Cloud & Business Strategy)

The US Government wants to modify 22 USC 1461 sec 501 so that they can put propaganda on the internet. There is a risk of people being exposed to said propaganda, but wouldn’t you really like to know what the US Government is saying to other countries, and specifically to the citizens of those other countries? Watchdog groups on both the left and right are going to have an amazing new source of information, right from social media, YouTube, and other resources, at least the way I am reading this one.

I am coming at this from a Social Media viewpoint, and how this could open the flood gates to not only more careful citizen monitoring of what the Government is saying, but that some of this is going to be directly attacked by the Left and/or Right depending on what the Government is saying, and the political opinions of those reading it. Americans are going to engage with this material, and any effective propaganda processes might be lost on the nations/states/citizens that the propaganda might be targeted to, the confusion this is going to create in the international propaganda market is going to be phenomenal. This interaction might actively reduce the propaganda value of the works, because Americans are ornery critters and will find this stuff on line anyways, we already listen to the Voice of America, and that is one of the Agencies that does international propaganda.

There seems to be an overblown hysteria and hoopla over the proposed changes to 22 USC 1461 sec 501 proposed by Rep. Mac Thornberry from Texas and Rep. Adam Smith from Washington State we need to sit down and work out exactly what the proposed changes mean, and how they may influence you in what we see on TV, or on the internet, or other places. Propaganda has been with us since day one, humans spin things, we always have we always will and it is important to understand that, we will say and do things that make us look better than anyone else. That essentially is propaganda, the idea that we spin things or give an alternative view point to things that are going on, like we see in the battle between Fox News and Current TV. If you don’t believe both is propaganda, when you need to stop for a moment and think about what audiences they cater to, and how they inflame, inform, and otherwise seek to change people’s perception of events.

The best I was able to find in the original context/text of 22 USC 1461 sec 501 reads as such, this was pulled from two sources, here and here.

Sec. 1461. General authorization

(a) Dissemination of information abroad

The Secretary is authorized, when he finds it appropriate, to provide for the preparation, and dissemination abroad, of information about the United States, its people, and its policies, through press, publications, radio, motion pictures, and other information media, and through information centers and instructors abroad. Subject to subsection (b) of this section, any such information (other than “Problems of Communism” and the “English Teaching Forum” which may be sold by the Government Printing Office) shall not be disseminated within the United States, its territories, or possessions, but, on request, shall be available in the English language at the Department of State, at all reasonable times following its release as information abroad, for examination only by representatives of United States press associations, newspapers, magazines, radio systems, and stations, and by research students and scholars, and, on request, shall be made available for examination only to Members of Congress.

(b) Dissemination of information within United States

(1) The Director of the United States Information Agency shall make available to the Archivist of the United States, for domestic distribution, motion pictures, films, videotapes, and other material prepared for dissemination abroad 12 years after the initial dissemination of the material abroad or, in the case of such material not disseminated abroad, 12 years after the preparation of the material.

(2) The Director of the United States Information Agency shall be reimbursed for any attendant expenses. Any reimbursement to the Director pursuant to this subsection shall be credited to the applicable appropriation of the United States Information Agency.

(3) The Archivist shall be the official custodian of the material and shall issue necessary regulations to ensure that persons seeking its release in the United States have secured and paid for necessary United States rights and licenses and that all costs associated with the provision of the material by the Archivist shall be paid by the persons seeking its release. The Archivist may charge fees to recover such costs, in accordance with section 2116(c) of title 44. Such fees shall be paid into, administered, and expended as part of the National Archives Trust Fund.

(Jan. 27, 1948, ch. 36, title V, Sec. 501, 62 Stat. 9; Pub. L. 92-352, title II, Sec. 204, July 13, 1972, 86 Stat. 494; Pub. L. 96-60, title II, Sec. 208, Aug. 15, 1979, 93 Stat. 401; Pub. L. 101-246, title II, Sec. 202, Feb. 16, 1990, 104 Stat. 49.)

The changes proposed by Rep. Mac Thornberry from Texas and Rep. Adam Smith from Washington State add additional language to 22 USC 1461 sec 501 that would include the use of the internet, social media, and other newer and quicker ways of disseminating information that as the two Representatives think the “The United States Information Agency” and through its processes like the Voice of America do not have the ability to use some of the newer tools out there like YouTube, Social Media, and others to engage people where they live. Social media is a huge component of propaganda, research, and given all the hoopla about the FBI, CIA, NSA, and other three letter acronym agencies having an interest in them as well, it makes sense for the Voice of America to also be available on the internet. It already is, but there are deeper shadier bits to American Propaganda that we really don’t see like the leaflets dropped on Iraq, Afghanistan, and other places. These are the changes proposed according to Adam Smith’s US Congress Page:

SEC. 10

ll. DISSEMINATION ABROAD OF INFORMATION ABOUT THE UNITED STATES.

(a) UNITED STATES INFORMATION AND EDUCATIONAL EXCHANGE ACT OF 1948.—Section 501 of the United States Information and Educational Exchange Act of 1948 (22 U.S.C. 1461) is amended to read as follows:

‘‘GENERAL AUTHORIZATION‘‘SEC. 501. (a) The Secretary and the Broadcasting Board of Governors are authorized to use funds appropriated or otherwise made available for public diplomacy information programs to provide for the preparation, dissemination, and use of information intended for foreign audiences abroad about the United States, its people, and its policies, through press, publications, radio, motion pictures, the Internet, and other information media, including social media, and through information centers, instructors, and other direct or indirect means of communication.

‘‘(b)(1) Except as provided in paragraph (2), the Secretary and the Broadcasting Board of Governors may,  upon request and reimbursement of the reasonable costs incurred in fulfilling such a request, make available, in the United States, motion pictures, films, video, audio, and other materials prepared for dissemination abroad or disseminated abroad pursuant to this Act, the United States International Broadcasting Act of 1994 (22 U.S.C. 6201 et seq.), the Radio Broadcasting to Cuba Act (22 U.S.C. 1465 et seq.), or the Television Broadcasting to Cuba Act (22 U.S.C. 1465aa et seq.). The Secretary and the Broadcasting Board of Governors shall issue necessary regulations

Then we move onto the Foreign Relations Act modifications which are from Adam Smith’s web site:

(c) FOREIGN RELATIONS AUTHORIZATION ACT, FISCAL YEARS 1986 AND 1987.—Section 208 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987 (22 U.S.C. 1461-1a) is amended to read as follows:

‘‘SEC. 208. CLARIFICATION ON DOMESTIC DISTRIBUTION OF PROGRAM MATERIAL.

‘‘(a) IN GENERAL.—No funds authorized to be appropriated to the Department of State or the Broad casting Board of Governors shall be used to influence public opinion in the United States. This section shall apply only to programs carried out pursuant to the United States Information and Educational Exchange Act of 1948 (22 U.S.C. 1431 et seq.), the United States International Broadcasting Act of 1994 (22 U.S.C. 6201 et seq.), the Radio Broadcasting to Cuba Act (22 U.S.C. 1465 et seq.), and the Television Broadcasting to Cuba Act (22 U.S.C. 1465aa et seq.). This section shall not prohibit or delay the Department of State or the Broadcasting Board of Governors from providing information about its operations, policies, programs, or program material, or making such available, to the media, public, or Congress, in accordance with other applicable law.

‘‘(b) RULE OF CONSTRUCTION.—Nothing in this section shall be construed to prohibit the Department of State or the Broadcasting Board of Governors from engaging in any medium or form of communication, either directly or indirectly, because a United States domestic audience is or may be thereby exposed to program material, or based on a presumption of such exposure. Such material may be made available within the United States and disseminated, when appropriate, pursuant to sections 502 and 1005 of the United States Information and Educational Exchange Act of 1948 (22 U.S.C. 1462 and 1437), except that nothing in this section may be construed to authorize the Department of State or the Broadcasting Board of Governors to disseminate within the United States any program material prepared for dissemination abroad on or before the effective date of the Smith-Mundt Modernization Act of 2012.

Basically in my non lawyer non diplomat might run for office someday viewpoint, of all the legislation that has been crossing the desk of Congress and the Senate lately, this one is benign. In relationship to ACTA, CISPA, NDAA 2012, and everything else we have seen that have eroded our rights, all this act seems to be doing is stating that we need to modernize how we as a government engage with other countries and the people in those countries. While VOA and printed propaganda is awesome and we as a nation use it, well time to start using the internet as well. There is a risk that Americans will come across the propaganda, and we think using the internet is important enough that it is worth running the risk.

In my opinion if the USA is saying things abroad that Americans shouldn’t see then we are in pretty dire straits to begin with.

On the good side of this, given the sorry state of regular news in the country, if our watchdogs like the Huffington Post, Daily Kos, Red State, and others see this stuff, and they don’t agree with it, the Streisand Effect will happen in full force. This gives both the left and the right, including the crazies on both sides a better ability to watchdog and monitor what the government is doing and saying, then splashing that puppy across the internet. Personally I am willing to risk being exposed to what the Government is telling other countries, because I would really dearly want to know. Save your battles for things that truly erode our rights to free speech, our ability to be private when we want to be, and otherwise be responsible adults on this one. We all need to as a nation, understand what is happening, why it is happening, and what the effects of any legislation is going to be. The current state of hysteria on this one is overblown in my opinion.

Related articles

• Are ‘Sock Puppets’ Propaganda?(theamericanconservative.com)

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• Senate To Consider “Propaganda” Amendment This Week(buzzfeed.com)

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(Cross-posted @ Techwag)

I’ve spent the last few years watching the meteoric rise of cloud content management vendor Box. Their approach has been to empower individual groups or business units within an organization to collaborate more effectively around their content and then to expand their presence within the organization. The “land and expand” strategy is a valid one, but one which puts some specific requirements on the vendor in terms of fitting in with the needs of corporate IT. Box is announcing a swathe of updates today that help with some of these functional areas.Box currently has 11 million users across 120000 businesses – they’ve already signed enterprises such as Avaya, Lennar Corporation, MGM Resorts International, Netflix, Stanford University, and Webcor Builders and this release aims to increase that enterprise velocity.

So what’s coming?

New Enterprise Administrator Tools

• Advanced Admin Console & Enterprise-wide Search: giving more granular controls and visibility regarding folder and file access from within a single command center in the admin console.
• Mobile Security Settings: new, granular mobile security settings to ensure content is protected regardless of access device. Available
• Multiple Email Domain Support: admins can provision accounts for more than one managed domain
• Email Archive & eDiscovery: new archiving functionality for regulated industries, admins can now archive and log activities

New Box Enterprise Licensing Agreement

Box has also introduced a new Enterprise License Agreement (ELA) for new and existing customers deploying Box to their entire organization. Available today, the Box ELA offers organizations predictable pricing over the lifetime of a multi-year contract, saving businesses money and simplifying the management of account contracts.

MyPOV

While Box has been quick to talk up its success within enterprise, the fact is that deployments across entire enterprises were few and far between. despite the hand waving about millenials, bottom-up adoption and the consumerization of IT, large enterprises require granular administration control over all the tools their users have access to – the admin tools help ease this pain point and hence lessen the barriers to entry. More importantly however is the licensing changes. In talking with enterprise IT staffers I have often been told that, while Box is a great product, the lack of visibility and clarity over enterprise licensing is a show stopper. An ELA that works across the entire enterprise and gives IT predictable pricing no matter how large the deployment is, will do much to reduce the resistance that corporate IT feels towards tools such as Box.

(Cross-posted @ The Diversity Blog - SaaS, Cloud & Business Strategy)

Let’s say you’re an executive at a larger size organization with around 100,000 employees and are looking to infuse your company with collaboration, where do you start?  Now, I don’t mean starting in term of  developing use cases or reviewing vendors.  I mean, which department or group do you start with if you want to do a controlled pilot?  Assuming you have around 50-100 departments how do you figure out where you should begin?  A bit of a daunting and intimidating task!

There are two approaches to this.

What others are doing

The first thing you can do is put together some research on what other companies in your vertical are doing.  For example if you run a hotel company you may want to see where Marriott or Hyatt hotels got started.  Not a bad approach when you think about it right?  I mean, if other companies in your industry are seeing benefits from deploying in a specific department then you should to?  It might be interesting to learn about what other companies in your industry are doing and how they are doing it, but it’s not a good idea to base your deployment decisions on what other companies are doing.  Why?  When it comes to collaboration organizations each take a unique path.  The variables are too great to just emulate what other companies are doing.  Corporate culture, overall company situation, internal politics, team structure, business needs and drivers are most likely all going to be unique for each organization (to name a few).  From working with and researching hundreds of companies at this point, I can safely say that while some broader trends may exist, for the most part, every company is a unique case.  It’s a bit like trying to become a great chef by reading the recipes of others.  Sure, this might give you some ideas and inspiration but at the end of the day the greatest chefs in the world are the one’s who can take ingredients and make a unique dish that they can call their own.

Ask your employees

Why bother trying to play guessing games when you can ask your employees?  Again, it’s great to know what other companies are doing around collaboration but the best way for you to decide on where to get started is by asking your employees.  This doesn’t need to be a very difficult process.  A corporate survey distributed by email which asks a few questions such as the one’s mentioned below should do the trick:

• What department are you in?
• Are you using collaborative tools at work?
• Are you seeing value from using these tools?

You might want to add/remove based on what makes sense for your organization, but just these three simple questions will tell you which department you should be looking at for a possible controlled pilot (assuming that a pilot is where you are going to be starting from vs an enterprise-wide deployment).  This approach is going to be the most accurate and more important the most relevant for your company.

(Cross-posted @ Social Business Advisor: Social CRM and Enterprise 2.0)

Many observers of the venture capital industry have questioned whether its best days are behind it.  They are frustrated by the past decade of subpar returns for the sector.  The most recent report to weigh in on the troubles of the industry was produced by the esteemed Kauffman Foundation.

There are obvious reasons the industry has had less-than-desirable returns, including: massive over-funding of the sector, huge increases in inexperienced venture capitalists that took a decade to peter out, and the massive correction in the value of the public stock markets that closed many exit opportunities for half a decade.

I can’t help feel a bit of rear-view mirror analysis in all of “VC model is broken” bears in our industry. I have been close to the tech & startup sectors for more than 20 years and I can’t think of a period in which I felt more optimistic about the innovation and value creation I see in front of us.

Looking ahead at the next decade I am excited by what I believe will be viewed as one of the best and most rational investment periods for venture capital due to seven discrete factors:

1. The number of startups being created has increased by an order of magnitude

Cloud computing and the open source movements have brought down the costs of starting a company by more than 90%.  If you want to understand the details of why this is, I covered it in detail in this post, Understanding Changes in the Software Industry.

This has led to the creation of incubators, accelerators and seed funds. From this we have seen a commensurate boom in the number of startup companies. When I was graduated from university in 1991 it was only the really committed who eschewed the corporate world for creating tech startup businesses.

When I came out of college LA Law was one of the most popular shows on TV and made being a lawyer sexy, so most of my peers made that career choice.

But in 2012 a visit to any major college in America will show you the massive increase in aspirations of our young talent to become the next Mark Zuckerberg and build a future Facebook. The movie, “The Social Network” might have had more of an impact on creating future entrepreneurs than any other event of the past 5 years. Thank you, Aaron Sorkin!

Contrary to some press reporting, the boom in startups, the creation of accelerators and seed funds as well as the deserved popularity of AngelList do not signal doom for our industry. They are, in fact, great news for traditional venture capitalists. The most successful of these businesses will still need venture capital to scale their businesses.

They need a combination of capital and experience to separate from the rest of the pack – the low cost of starting a business means it is even more vital to become the market leader more quickly. What the explosion in startups really means for our industry is a much bigger pipeline of potential deals if we VC’s can be patient.

Yes, it’s true that FOMO (fear of missing out) is driving some irrational behavior and valuations amongst uber competitive deals and well-financed VCs. I’ve written in detail about that in this post, “On Bubbles, And Why We’ll Be Just Fine.”

It doesn’t seem too irrational for seed or A deals, just a bit higher than the norm. And by the C round it seems like investors feel more confident in setting a fair market value. But in a race to be sure you don’t miss the next Pinterest, some people are paying huge premiums for “market risk” B rounds. Some will pay off, others will not.

For those patient enough to source great companies at reasonable prices and prepared to weather the next inevitable downturn, I believe firmly there will be economic rewards for discipline and patience.

2. The number of venture capital funds has shrunk by two-thirds

To really assess what opportunities the VC industry has over the next decade, one needs to first look at some of the root causes of poor returns in the past decade.

The Funding Problem

In 1998 there were around 850 VC funds and by 2000 there were 2,300.  Thomson Reuters data shows that around $10 billion of LP money went into VCs per year pre bubble. By 2000 the total LP commitments had mushroomed to more than $100 billion.

Everybody knows that most funds are 10-year funds (and that strangely 10-year fund really means 12-year funds). So it is unsurprising that an over-funding environment and the commensurate returns hangover would have lasted until about – well – 2012

Just why does over-funding dampen returns? For starters we saw a huge influx of inexperienced managers enter the VC industry proving clearly that being a VC is not a purely quantitative job.

But on micro level, over-funding also creates performance problems for specific companies. In a rational funding environment you might see 3 or 4 great competitors slug it out over the market, each with enough funding to prove their performance until the next milestone where the market decides whether they deserve more funding. They compete on features, price and execution.

In an over-funding environment companies are encouraged to eschew revenues in a land grab to acquire eyeballs, clicks, page views or whatever other vanity metrics give VCs the false comfort that they’re sitting on a gold mine. Try charging customers for your product when you have 12 competitors giving the product away free finances by $20 million of VC.

The Exit Problem

And of course the funding problem coincided with the stock market correction that took away most exit options for years to come. IPO markets had burned an entire cycle of retail stock investors and many institutional investors to boot.

The numbers of potential buyers had decreased dramatically both because large companies were shedding jobs and because many past buyers simply lacked resources to make acquisitions. And in a market with too much capacity (too many startups) the leverage was completely in the hand of buyers at M&A activity finally picked up.

So of course returns from 2000-2010 were subpar on average for the industry.

Today’s Normalization

Fast forward to 2012 and none of these conditions hold.

While the number of startups has increased exponentially, the number of active venture capitalists has shrunk by more than 2/3rds in the past decade to less than 750 today and still shrinking. Put simply, more deals and fewer venture capitalists mean better access to deals, more stability for winners and great returns for the best in our industry.

Money flowing into our industry has also massively downsized.  LP contributions to VC firms shrunk from 2000 and by 2005-2008 had stabilized to around $30 billion per year.  By 2010-2011 this had shrunk by half again, averaging under $15 billion.

It’s also worth noting as data would suggest from this SVB venture funding report, lower costs to build tech & operate businesses implies the possibility of lower loss ratios in portfolios. It will take some time to prove out this hypothesis, but the data above suggests it may be the case.

So it’s hard to make a compelling argument that the performance on average in the past decade will prima facie have any predictive powers in determining the next ten. In fact, the market conditions would argue for quite the opposite, which is what makes rear-view-mirror analysis so blurred.

3. There are 20x more consumers online

In 1997, the year the Kauffman Report begins its analysis; there were 70 million users online globally. In 1998 it was 150 million, 1999 250 million and by 2000 it had crossed 350 million. Even at this staggering pace it still represented less than 6% of the world’s population.

By the end of 2011 the Internet population was estimated at 2.3 billion, with 275 million in North America alone (source: Internet World Stats) and an astounding global penetration of 33% of the world’s population. Considering how much world poverty exists this penetration rate is truly mind-boggling.

Put simply – doing business online is significantly more valuable than it has ever been. There is no sector of the economy that isn’t being transformed by the online community that is now voraciously consuming media, applications, communications and buying global products.

To ascribe past poor performance in our industry to the current market situation we face is myopic.

4. We’re online all the time and at high speed

It’s not just that more people are online, it’s that we’re online all the time.

Internet usage a decade ago was less than 1 hour per day and was restricted to narrowband communications. Today we’re online 3.1 hours per day on average, and that’s excluding the other 13 hours a day where we have our mobile devices, our connected TVs, our iPads and Kindles and soon our cars connected to the web.

The ability to interact, transact and disrupt is an order of magnitude greater at broadband speeds than at 56k dial-up modem speeds. Just how transformative is broadband? As of January 2012 consumers were watching 4 BILLION video views per day on YouTube. A decade ago the idea of even watching video online would have been laughable.

THAT is disruption. And as the recent VC fundings of Maker Studios, Machinima, Movie Clips, Big Frame and Fullscreen will attest – opportunities for massive growth in our sector are anything but moribund. The video industry will be disrupted just as books, newspapers and music before it.

And retail, financial services, hotels, the auto industry, taxis, flowers and every inefficient or protected industry out there is being altered by technology changes that change market dynamics and create opportunities for the innovative, the nimble and the risk takers.

5. Mobility really changes everything

It’s not just that we’re connected to the Internet at higher speeds and for longer; we’re actually always tethered to the web. In fact, the majority of Americans are now carrying computers in their front pockets.

The opportunity to transact at the point of purchase increases the sheer number of revenue opportunities. This world of local meets retail meets digital advertising portends to technology disruption and with it VC opportunities.

This never existed a decade ago. Heck, this opportunity didn’t exist three years ago.

According to Google data 30% of all restaurant searches now come via mobile devices. Our societal behavior is now to look up things we want to book or purchase at the point & time of need.

The desktop web introduced banner ads that offered “brand advertising” opportunities akin to television.  Mobile devices deliver “bottom of funnel” sales opportunities that deliver real & immediate economic results.

Search for a restaurant, book a table, eat in 30 minutes. Search for movies times, book your tickets, see a show. Bottom of the sales funnel.

The mobile world brings enormous business opportunities and changes to business models that were unthinkable when VCs made investments ten years ago that produced the last decade of results.

And the future?

Nearly 25% of US users access the web primarily through only mobile devices and these are our youth and thus our future. It is estimated that more than 30% of all YouTube videos are now being consumed on mobile devices and I’ve seen actual data that shows in some youth genres mobile video consumption now exceeds 50% of video views.

When you look at the developing world this is the majority of users (due to lack of landline infrastructure) and it portends future opportunities in payments, entertainment, application development and services.

This doesn’t seem like the end of VC to me, it feels more like the 2^nd inning.

6. Everybody is now payment ready

Often overlooked in the importance of what has changed during the past decade is that we’re all payment ready now. We’re all one-click away from buying, watching, renting or ordering just about anything.

When you order an Amazon Kindle it comes pre-configured with your user name already configured into the device so that you can click a single button and buy shit. And buy people are doing en masse. It’s not a tablet – it’s an order entry device!

A decade ago most of the country was fearful of entering their credit cards or using mobile banking. Today all of our banking and payment information is accessible online and we are one-click from buying from Amazon, iTunes, the AppStore and PayPal.

Businesses are also one-click from advertising through Google and now Facebook. Web businesses can now grow revenue before they can even afford sales people.

This trend is often overlooked yet the results or palpable. When businesses really work – they explode financially at a pace that we haven’t seen in history and with limited investments to prove out this case.

If you think back to just the past couple of years we’ve seen enormous growth on limited capital in businesses like Words With Friends and OMGPop (both now Zynga) as well as Angry Birds.

This has spawned growth in related VC-backed businesses like Burstly, TapJoy and Flurry who help enable real-time transactions in mobile apps.

The whole ecosystem grows rapidly because the distance between, “I like this application” and “give me an upgrade” is one click with none of the traditional abandonment that comes with having to pull out your credit card.

Consider this: 5 years ago VCs were debating whether US consumers would ever adopt “virtual goods” in the way that Asian consumers did and thus saw the popular rise of QQ (TenCent) in China (which did $5 billion in revenue in the past 12 months).

Virtual goods are in fact booming on a global basis and in many instances deliver a much higher ARPU than advertising revenue. 2012 virtual good revenue is expected to top $12 billion this year. [thank you to Kidlandia for the chart]

And here’s the thing – 55% of the entire market of purchasers are 15 years old or younger. There is no stronger evidence of the power of one-click purchasing (as these people clearly don’t have credit cards).

Imagine how these consumers look in 10 years time. Will they really even understand cash? Unimaginable to you? Just remember that 10 years ago you had no: YouTube, Facebook, iPhone or iPad. In fact, you were cool because you had a Palm Pilot while your friends still used a Filofax (yes, you know I’m on to you).

7. We’re all socially linked

And finally it can’t be ignored that we’re not only payment ready, but we’re socially connected. Look at the rapid adoption of Groupon, LivingSocial or Instagram as proof of how rapidly businesses can grow through viral means.

It’s not just that businesses can monetize more easily, when people like products or services they are diffused more rapidly through the population than has ever been the case.

Nowhere was this more evident than the rise of Zynga, one of the fastest growing companies in history. But this is also spreading through non-game types of businesses.

Evidence Fab: Just 18 months ago they started selling products and through a unique offering and a flawlessly executed social model they are reportedly on par to cross $100 million in sales in 2012.

That type of growth on limited VC dollars was unthinkable a decade ago.

Morning in VC

These seven factors are leading to better and more sustainable opportunities in venture capital than have been present at any time in our investment histories.

We have lower costs to create companies – leading to more early stage innovation. We have a more normalized venture market with less capital and fewer firms. We have consumers who are online at higher speeds and for more of their days. People are connected all the time and when they’re mobile. Each of these pocket computers is payment ready & social linked.

Given these seven factors – it’s hard to look in the rear view mirror and imagine you can see the future.

I believe it’s truly morning in the technology sector. And I remain convinced this bodes well for our venture capital industry.

Top image courtesy of Fotolia.com

(Cross-posted @ Both Sides of the Table)

In my latest post, I recapped on the previous posts and started to take Integration from a business point of view. I’ll continue to do that here, and try to mix in technical details without it getting too confusing. Wish me luck!

Here’s the conversation again:

1. Hey Tom! What did the Red Sox do last night?
2. Dunno, didn’t watch the game, haven’t read the papers. Try Hank
3. Hey Hank! Did you watch the Red Sox game last night? What’s the score?
4. Oh man it was quite a game. Lots of excitement, bases loaded with two down, but they scraped it at 15-13

This conversation could happen anywhere, and any time. You’ve probably created an image in your head that this is in an office or public place, and the person sits close to Tom and Hank.
That is one option – but there are many others:

• The conversation is not real-time, but takes a few minutes, hours or even days
• The people aren’t located in the same room or place
• The people don’t speak to each other, but use different media: SMS, tweets, IM; even a quick call or email could be feasible here

Would any of that change anything to the content of this conversation? Well obviously the last one doesn’t fit in one tweet, but it would in two – other than that, nothing should change, of course. Right? Right.
It would be odder than odd to change anything to the conversation here, just because you’re using a different medium.
And it would be even more odd, to change it now, wait for a few years without the medium itself changing, and then having to change it again – wouldn’t that be so? Yet that’s what the REST fundamentalists advise – and in 5 years or so there will be another “invention”, and other people, or the same-ish, who now praise the new new New Black.
REST assured that the majority of those people advocated SOAP a decade ago, for the same lack of (business) reasons

In my eyes, most if not all of these are amateurs who have little to none experience in the field of Integration, and probably all come from one environment: one ERP package, one programming language, one operating system – well maybe 1.5, or even 2 at best

What would make sense? It would make sense that the I’s in the picture, the Enterprise Functions, remain unchanged -in essence- while being exposed to the “device layer”.
It would mean that you can have the same conversation across any medium: real-life interaction, phone (landline or mobile), social media, text, fax, telex, whatever. Makes sense? Please shout out if you don’t think so

Now, into the technical depths of one of these scenarios

Take the mobile device, for example: that would probably be a client-server scenario where the mobile requests an Enterprise Function. For old phones that would be GPRS (offered by GSM) and for modern, WCDMA and HSDPA are offered by UMTS. Those are the physical networks these devices live in, yet doesn’t mean they can’t use transport protocols like FTP, HTTP, and so on.
So, at least 4 protocols there you can or even should support if you want to “go mobile”, i.e. gain market share by embracing the mobile model.
So how about the syntax of “mobile messages”?
Well, anything goes really, doesn’t it? What is the syntax Angry Birds uses, or Wordfeud, or Draw Something? You don’t know, do you? What if you would love to tap into those mega-favourites?
The message is easy there: the supply isn’t in your hands, yet the demand is, so you have to suit up

Basically, this is the lesson to learn for this post: all you Enterprise people who read it, used to the world being mostly blue or green: heads up! The world isn’t mostly blue or green, never has been, and really is very reluctant about being treated as such – regardless of so-called architectures devised over a decade ago

Dear ERP people: you can’t cover the world in your blanket, because the world does change. The larger your blanket gets, the harder it becomes to change it along with it, and especially: the longer it takes. Your time has come, don’t you hear the bells ringing? Your customers do…

(Cross-posted @ Business or Pleasure? - why not both)

Sometimes people ask me why I’m always writing blog posts and speaking at events. “Simple,” I say. “Silicon Valley has a short attention span. If I don’t keep my name in front of people, they’ll forget who I am.”

If they don’t believe me, I respond with what I like to call the Yahoo test.

“Can you name Yahoo’s first outside CEO? He ran the company from 1995 to 2001.”

Almost no one can do it, even if they lived through the Dot Com boom.

Only a tiny fraction of people even hazard a guess, and the vast majority of those guess Terry Semel, which is incorrect.

Remember, from 1995 to 2001, Yahoo was the world’s largest Internet company, making its CEO the most powerful man on the Internet. And less than a decade later, the vast majority of people can’t even think of his name.

The great thing about Silicon Valley is that you can go from rags to riches in the blink of an eye. But that same feverish pace makes it all too easy for people to forget you, no matter what your accomplishments.

Does it take work to write blog posts, moderate panels, and try desperately to stay in the public eye? You bet. But it beats obscurity.

P.S. Yahoo’s first outside CEO was Tim Koogle.

P.P.S. I once shared this story with a prominent Valley figure (who, incidentally, remembered Tim Koogle right away). He countered with what might be an even better story. Apparently, the first time Mark Zuckerberg met Marc Andreessen, Zuck asked Marc, “So, what did Netscape do?”

(Cross-posted @ Adventures in Capitalism)

Emphasis on  “assemble”, as opposed to develop.  For years SAP and Oracle fought a religious war of acquire/assemble vs develop in-house.  SAP’s view was (even under the current Co-CEOs) that you can only get to a coherent, seamlessly integrated suite by development.  Apparently they have changed religion, borrowing a chapter or two from Larry Ellison’s playbook.

After ill-fated attempts at conquering the market vith in-house developed Business ByDesign, SAP got a huge shot of Cloud DNA by acquiring SuccessFactors, whose CEO Lars Dalgaard has become SAP’s  On-Demand Czar.  The ink has hardly dried on this deal, when today SAP announced the acquisition of Ariba, the procurement / sourcing leader.  So now SAP has Procurement, HRMS, and Finance – the latter coming from ByD. After speculation before/during the recent SAPPHIRENOW conference today we saw confirmation that SAP intends to carve Financials out of ByD and make it the Finnacial cornerstone of their On-Demand portfolio.

What a change in a few months!  From pathetic half-hearted attempts SAP now has major drive into Cloud, one that aims to be competitive with Workday, Salesforce, NetSuite amongst others.  Enterprise Software in the Cloud has just become a lot more exciting. Watch this space.

Oh, and before I forget: watch Spendmattters, where I am sure fellow Enterprise Irregulars and procurement guru Jason Busch will soon open the floodgate of his expert analysis.  Jason is the God of all spend matters (pun intended) and he has proposed this deal to SAP three years ago.  For additional coverage also keep an eye on the EI thread as it unfolds.

Messenger sees salesforce roll out technology they gained from the acquisition of DimDim – real time aims to build upon the usage of Chatter by offering a whole raft of real time functionality that will remove the need for organizations to continue using a number of tools they currently do. Real time enables presence for all Chatter users so one can see if a particular contact is online and available – it include instant messaging, group chat and screen sharing. The idea being that colleagues can move collaboration out of its existing silos (be it skype, other IM tools or whatever) and have it become an intrinsic part of the business process. Messenger was first announced at DreamForce last August raising some questions about the nine months it’s taken to go from announcement to general availability.

It’s a compelling proposition – the ability to create a Chatter group on the fly, to pull people into a conversation around a particular topic or workflow, and to have visibility over all of that is valuable. But it’s not all plain sailing – at this stage there is no archiving for messenger – any conversations that occur within Messenger are lost once the browser is closed – not only does this cause some real problems for the very problem Chatter is trying to solve – data surfacing – but it also introduces some real challenges around compliance – having messages disappear is a Sarbanes Oxley nightmare. King told me that archiving is definitely coming in the winter 2012 release – but personally I believe it should be released at the same time as the Messenger product itself. Bear in mind that full archiving occurs with Google Messenger product – GChat.

An interesting features is Chatter favorites – this gives users the ability to apply filters to Chatter and set up “favorites” that, over time, lead to Chatter delivering up a contextualized Chatter feed. This is the real opportunity area – filtering the deluge of data and serving it up in a highly refined and contextualized manner. We can see some of the opportunities around this with the suggested contacts feature in Chatter which uses analytics to suggest contacts with relevant interest areas to connect with. I would imagine that over time we’ll see this sort of semantic functionality rolled out across Chatter so that pages on certain topics are automatically created on the fly.

This is the key challenge and opportunity for Chatter. While it currently has great uptake, my assessment from talking to organization who use Chatter is that it’s still only reaching a small percentage of users. There are, according to Benioff, 150000 active Chatter networks globally – we need to see those networks move deeper and deeper into the organizations they touch. The key for salesforce is to create functionality that allows the product to remain compelling even when it is producing a veritable firehouse of information. To do so they’re going to need to weave a fabric of analytics and semantics into the platform – my feeling is they’re already making moves to do so and Chatter will progressively increase filtration as quantity increases.

Here’s a video Robert Scoble made about Chatter Messenger soon after it was announced last year.

Related articles

• Upcoming Salesforce.com Release Adds Real-time Chat Capabilities (pcworld.com)
• Salesforce goes real-time with IM and screensharing for the enterprise (venturebeat.com)
• Salesforce Chatter To Add Instant Messaging and Screensharing (techcrunch.com)

(Cross-posted @ The Diversity Blog - SaaS, Cloud & Business Strategy)

CloudBees (previous CloudAve coverage), the PaaS company behind the Open Source Jenkins project, today announced that they are offering a high availability plugin to their Jenkins Enterprise product. They made this announcement at the Jenkins User Conference at New York City. This plugin will help in better uptime and improved governance/oversight along with increased productivity. This High Availability plugin is very important from the enterprise point of view. When you have large number of developers distributed around the world working on a project, the uptime of Jenkins server become very important. Any time lost in the process of getting the server rebooted, especially taking into account the timezone differences, can have significant impact on time bound projects. The time lost could range from several hours to days, drastically impacting the project timeline.

With the high availability plugin installed, a standby Jenkins master automatically detects the machine failure and steps up to take over the failed instance. The build is recovered and restarted in minutes. This ensures that there is no serious downtime affecting developer productivity. As enterprises consider PaaS as a serious option, the focus shifts to issues like security, high availability, etc.. In fact, at DeployCon 2012, we are planning to discuss all these topics related to PaaS from an enterprise standpoint. If you are an enterprise customer and want to know how PaaS can fit into your organization, you should attend the event. In fact, CloudAve is a media sponsor for the event and we have some free tickets exclusively for CloudAve readers. If you are interested in a free ticket, please drop your email in the comments section. CloudBees’s release of this HA plugin is targeted towards this increasing enterprise interest in PaaS.

CloudBees also announced few other plugins targeting the enterprises, especially focussed avoiding project failures. They are:

• Custom Update Center Plugin -  A central update center containing approved plugin versions
• Validated Merge Plugin – This ensures only code that won’t break the build is checked in
• Secure Copy Plugin – This quickly and securely transfers jobs between Jenkins masters
• Fast Archiving Plugin

I am bullish in this blog on PaaS being the future of Cloud Services and we are also seeing enterprises warming up to PaaS. In this context, this announcement by CloudBees is the next logical step. I will be seriously interested in hearing from enterprise IT on their take on HA for Jenkins.

Netflix Similarity Map

In 2006 Netflix offered to pay a million dollar, popularly known as the Netflix Prize, to whoever could help Netflix improve their recommendation system by at least 10%. A year later Korbel team won the Progress Prize by improving Netflix’s recommendation system by 8.43%. They also gave the source code to Netflix of their 107 algorithms and 2000 hours of work. Netflix looked at these algorithms and decided to implement two main algorithms out of it to improve their recommendation system. Netflix did face some challenges but they managed to deploy these algorithms into their production system.

Two years later Netflix awarded the grand prize of $1 million to the work that involved hundreds of predictive models and algorithms. They evaluated these new methods and decided not to implement them. This is what they had to say:

“We evaluated some of the new methods offline but the additional accuracy gains that we measured did not seem to justify the engineering effort needed to bring them into a production environment. Also, our focus on improving Netflix personalization had shifted to the next level by then.”

This appears to be strange on the surface but when you examine the details it totally makes sense.

The cost to implement algorithms to achieve incremental improvement isn’t simply justifiable. While the researchers worked hard on innovating the algorithms Netflix’s business as well as their customers’ behavior changed. Netflix saw more and more devices being used by their users to stream movies as opposed to get a DVD in mail. The main intent behind the million dollar prize for Netflix was to perfect their recommendation system for their DVD subscription plan since those subscribers carefully picked the DVDs recommended to them as it would take some time to receive those titles in mail. Customers wanted to make sure that they don’t end up with lousy movies. Netflix didn’t get any feedback regarding those titles until after their customers had viewed them and decided to share their ratings.

This customer behavior changed drastically when customers started following recommendations in realtime for their streaming subscription. They could instantaneously try out the recommended movies and if they didn’t like them they tried something else. The barrier to get to the next movie that the customers might like significantly went down. Netflix also started to receive feedback in realtime while customers watched the movies. This was a big shift in user behavior and hence in recommendation system as customers moved from DVD to streaming.

What does this mean to the companies venturing into Big Data?

Algorithms are certainly important but they only provide incremental value on your existing business model. They are very difficult to innovate and way more expensive to implement. Netflix had a million dollar prize to attract the best talent, your organization probably doesn’t. Your organization is also less likely to open up your private data into the public domain to discover new algorithms. I do encourage to be absolutely data-driven and do everything that you can to have data as your corporate strategy including hiring a data a scientist. But, most importantly, you should focus on your changing business — disruption and rapidly changing customer behavior — and data and not on algorithms. One of the promises of Big Data is to leave no data source behind. Your data is your business and your business is your data. Don’t lose sight of it. Invest in technology and more importantly in people who have skills to stay on top of changing business models and unearth insights from data to strengthen and grow business. Algorithms are cool but the data is much cooler.

Related articles

• How does Netflix know? A look into the logic behind the media giant’s recommendation system (nj.com)
• Netflix spent $1 million on an algorithm it doesn’t use (slashgear.com)
• Netflix explains its recommendation system, can’t find a reason for Adam Sandler’s last movie (engadget.com)
• Netflix Never Used Its $1 Million Algorithm Due To Engineering Costs (wired.com)

(Cross-posted @ cloud computing)

B2B buyer behavior has evolved in adaptation to the Internet. A new B2B buyer species has arisen that is more connected, more impatient, more elusive, more impulsive, and more informed than its pre-millennium ancestors. Just as the new B2B buyer has evolved in adaptation to the Internet, B2B sales and marketing professionals must adapt their strategies and tactics to the expectations of the new B2B buyer for online independence and instant gratification. For each new behavioral trait that differentiates the new B2B buyer species from its pre-millennium ancestors, there is a new rule of engagement that complements that behavior to maximize B2B sales and marketing effectiveness.

This eBook consolidates and expands on my popular New Breed of B2B Buyer series. It defines 6 behavioral traits of the new B2B buyer and explores how they lead to 6 new rules of sales and marketing engagement. It also introduces the concept of the “fuzzy funnel” and includes tactical highlights such as the evolving roles self-service, search, marketing automation and B2B sales in new B2B buyer engagement. Share and enjoy!

(Cross-posted @ Chaotic Flow by Joel York)

Image courtesy of NetSuite

At the NetSuite SuiteWorld event recently the company announced SuiteCommerce an end-to-end solution that ties back end ERP functionality with customer facing e-commerce solutions that are optimized across any endpoint – desktop, mobile, tablet etc. It’s a compelling proposition and one which continues the theme of tying together similar services to provide a complete solution for a particular use case. Before discussing my thoughts on the offering, a quick introduction. SuiteCommerce itself consists of several differng offerings:

• SuiteCommerce Experience – The SuiteCommerce Experience is the page serving and development framework that enables companies to deliver rich user experiences, regardless of touchpoint
• SuiteCommerce Services –The SuiteCommerce Platform includes a new group of services called SuiteCommerce Services that expose NetSuite’s back-end commerce functionality and data as services to the SuiteCommerce Experience and any other commerce front-end application
• NetSuite Commerce Platform –The NetSuite Commerce Platform provides the core native business processing capabilities to run commerce operations

So in effect it is an aggregation of front end delivery, back end enablement and a flexible platform fabric running between the two. The bringing together of customer facing and backend functionalities is important as it opens up for a number of functional possibilities – want to tie customer history to purchasing options? This is the way to do it. Want to allow a host of end point devices to talk to the core business software? You need integration to power it. As Denis Pombriant pointed out in his post;

The Internet of things will be much bigger than the Internet of people and the Internet of things will be a major acquisition portal for business and consumers as well as a major user of automated commerce technologies.  Commerce solutions that make it easier for people to buy and receive products through efficient channels is a great first step.

MyPOV

I’ve long talked of the value that organizations can leverage by using one system that ties together disparate parts of the business. SuiteCommerce is a good example of this and importantly ties ERP, often thought of as the central system for a business, to what is actually the systems of note – customer interactions and the buying experience. In his keynote, NetSuite Zach Nelson told the audience that NetSuite is the fifth largest E-Commerce system on the web – that is, only four other organizations (among them e-commerce monsters Amazon and Ebay) have interactions with higher numbers of e-commerce transactions. That being the case, by closing the loop between customer and core systems – NetSuite is uniquely placed to provide a higher value offering to e-tailers. The other e-commerce sites can’t do it because, outside of integrations, they don’t have visibility over the financial aspects of the system. The other financial providers meanwhile haven’t provided compelling e-commerce solutions and hence also have to rely on integrations with the e-commerce providers. NetSuite is betting that large e-tail operations will prefer a suite solution rather than bolting together separate best of breed solutions.

Of course it’s not quite as simple as that. In order for SuiteCommerce to succeed, the e-commerce solutions needs to be as flexible as the best e-commerce solutions in the marketplace. That’s a difficult ask for a company that is primarily focused on back-end systems. While there is no denying that NetSuite is a robust ERP solution – one only needs to look at their user experience to see that they’re not an organization that is laser focused on UI or UX – both aspects that are critical once the customer has to interact with the system.

It is also going to be interesting to see how NetSuite handles the challenges of scaling hi throughput e-commerce needs. SuiteCommerce is currently being trialed by around ten NetSuite customers and Nelson told us that they’re limiting its rollout to only 100 customers this year. That’s something of a worry as it suggests that either NetSuite is worried about scale impacts of adding more users, or else that the solution isn’t actually yet ready for prime time.

At the event I spoke with Peter Maccauley from Kitchenware Direct, a kitchenware e-tailer from Australia. They told me that SuiteCommerce absolutely solves a pain point that they have and that they’re keen to sign up to it as soon as possible – the risk for NetSuite is that retailers like Maccauley get sick of waiting for a less rapid roll out and go looking elsewhere for solutions. At the moment they’re unlikely to find anything as compelling as SuiteCommerce – the challenge for NetSuite now is to ensure that customers have access to it as soon as possible.

[Disclosure: NetSuite funded my travel and accommodation to attend]

(Cross-posted @ The Diversity Blog - SaaS, Cloud & Business Strategy)

Having spent the last year discussing the issues with a large numbers of cloud newcomers, and as part of my position in Newvem, I found that the cloud can be really great if managed correctly – but what exactly does that mean?

I opened a new topic on Quora “Cloud Management” and asked a simple question: “What is “Cloud Management” and what areas does it cover?” I got several answers from companies that define themselves as “Cloud Management” providers. IMHO, all of their answers were good, but none were perfect. Some of the guys described cloud management as the abstraction layer of the infrastructure and used the terms delivery, design, and deploy. Others mentioned SLA and used terms such as tracking and auditing. The answers lacked the objectivity I looked for and it was really hard to find true uniformity between the suggested definitions/descriptions.

Presenting my own view, yet trying to remain objective, I finally decided to coin my own simple definition of cloud management:

Cloud Management refers to all cloud environment aspects and their related tasks.

Tasks include deploying, monitoring, analyzing and more. Cloud aspects include capacity, utilization, availability and more. Continuing my research, I backed up and checked the Wikipedia definition of “Systems Management”. I wasn’t surprised to find the term “administration”. The Wikipedia article details the different administration tasks, such as managing servers’ availability and security. At first glance it would actually seem relevant for the cloud as well – but is that really the case?

It is interesting to try and compose a list of  cloud environment aspects. Currently it seems to only some of the Systems Management aspects from Wikipedia, though I expect it will need to include additional items. The same is true for the list of tasks. For example, in the cloud you can find new operations such as analysis and federation.

Another important cloud management issue is the recognition that you will never reach saturation. In a cloud solution,  the amount of users changes all the time as do their behavior and needs. These usage pattern changes force the cloud environment to change. The difference between the deployment investments and the ongoing costs should be minor. The same team that deployed the cloud needs to maintain a continuous deployment practice. Cycles of learning, designing, and changing must be part of any cloud management policy.

If we are not delivering the right quality of services, you should be able to walk away. You, the consumer of these services, should be in full control.

Dr. Werner Vogels’, Amazon AWS CTO at the 2012 AWS Cloud Summit in New York

The cloud management market is on shaky ground, and the related terminology is in flux. Cloud management is not only for the IaaS layer. I am still looking for relevant management solutions for PaaS and SaaS. Enterprises and ISVs leaders push to reach their cloud services but unfortunately are not aware of the importance of having a management solution and eventually find themselves lost. Don’t be afraid to fall, quick managed moves to the cloud help us understand the mistakes and lead to an ongoing great successful business.

Image via CrunchBase

IBM’s foray into public cloud services is through their IBM SmartCloud portfolio. It is targeted at enterprises wanting to move legacy applications into the cloud. It helps them optimize the IT costs and add organizational agility through self provisioning and other features. Yesterday, IBM announced some numbers on the SmartCloud which will give us some insights into where they are headed. According to IBM

• Cloud is expected to deliver $7 billion in revenue by 2015 and cloud revenue nearly tripled from the year before
• More than 1 million enterprise application users are working on the IBM Cloud
• IBM analyzes more than $100 billion in commerce transactions a year in the cloud
• IBM hosts 4.5 million daily client transaction through IBM’s public cloud

They are also pushing their cloud offerings through various verticals like Health Care, Smarter Commerce, etc.. IBM’s current market power is helping them sell their Cloud to these customers. According to IBM, they are successful in selling their IBM Social Business on SmartCloud to healthcare customers because social software not only cuts costs for health care providers, it also helps them better treat their patients. IBM also announced they IBM SmartCloud will be available in Europe in the 3rd quarter of this year.

 Disclosure: IBM is a client

Related articles

• IBM Expands SmartCloud Capabilities (itproportal.com)
• IBM Advances SmartCloud and Adds New Customers, Partners (eweek.com)
• IBM SmartCloud: As Much Cloud As You Want (informationweek.com)

I’m fond of saying that I look for entrepreneurs that have a chip on their shoulder. That they have something to prove. That they’re not afraid to stick their noses up to the establishment.

I have always felt this way. It’s something I kind of seek out. I guess my thoughts are that if you’re part of the country club you have a vested interest in protecting the existing order and that disruption happens more from those that are on the outside wanting to change the rules.

I’m ok with founders who have “father issues.” I like people to have a healthy bit of motivation derived from wanting to stick their middle finger up at somebody who once dissed them or held them back.

It’s a certain edginess that I like. Grit.

In fact, I think those around me must tire of my repetitive advice,

“Be careful of wanting to be liked too much. It leads to bad decisions. It’s your job to be polite and inquisitive but skeptical. To be liked? To fit in? That’s herd mentality.”

I’ve written about similar topics:

1. Entrepreneurs Should be Respected, Not Loved
2. Why I Give Direct Feedback

I have a healthy appetite for working with immigrants or children of immigrants. I am a product of one so maybe there’s resonance there. But they’re seldom country club kids. [relax, I mean "country club" as a metaphor, I'm not hating on you just cuz you were good at tennis & golf.]

I’m looking for the Visigoths, not the Roman.

BUT.

And this is the point of this post – be careful about your chip.

Edgy “change the world and eff the establishment” chip is different than “all you haters suck and why won’t anyone back me wah wah wah” chip.

Here’s a story.

I was at a conference 18 monts ago or so. I met an entrepreneur. He sought me out in the hallways. He has the “perfect business for me” given my blog commentary. Would I hear him out?

Sure.

Well – he had this awesome platform that was super technical – great IP. He was from Harvard. Smart – check. He had raised a few million dollars – social proof. But the more he spoke the more he kept complaining about his existing investor. They were unsupportive. They were terrible bordering on unethical. He has so much negative energy it was draining.

I had no doubt he was telling the truth and was probably right. But he seemed so beat up and bitter that I doubt he will ever attract more capital. The chip was misplaced. Was on the wrong people. Investors screwed you a bit? Yes, that does suck. So either leave and start fresh or bite your lip. Nobody wants to get excited about spending time evaluating a company with a miserable CEO. I told him as much.

And usually it’s much more subtle.

I recently was with a group of investors and watched an entrepreneur try to pitch his concept. The investors asked some cynical questions. It would be easy for the entrepreneurs to say, “What a dumb freaking question. Why are you guys all the same?” But I guess that wouldn’t get very far.

But his body language and tone said it all for him. Exasperation. Frustration. He clearly didn’t want to be doing this. Yet it’s his job. And it’s his job to do it with a smile on his face.

Another friend of mine has been out raising his first institutional money. He has tried to go down the angel route, too. He has been turned down a lot. It’s starting to show in how he talks about his company. He seems despondent. When he pitches he seems like a dog ready to be kicked. When he responds he isn’t earnest – he seems frustrated because you asked the same questions as the last 5 guys who turned him down.

I told him,

“Trust me. Every great entrepreneur has been turned down dozens of times. Laugh it off! Wear it like a badge of honor! Hell, most entrepreneurs who were funded by VCs were probably told ‘no’ by that exact same VC one time before!

That’s what motivates them – turning a ‘no’ into a ‘yes’

You ain’t gonna do that with your negative energy.

So [prominent angel] said ‘no’ and was a dick. Get over it. The best revenge will be to be successful so you can be smug around him for the rest of your life!”

It sucks but trust me if you have a chip on your shoulder that says, “How could you guys fund yet another Pinterest competitor and you won’t even give my original concept a chance?” it will show. People will know. You will either give off frustration or lack of confidence. Neither is good.

I don’t mean to go all New Age on you. But trust me – before the meeting force yourself to smile and laugh out loud. Get yourself in the right mental mindframe. Remind yourself, “This is going to be a great meeting. Even if he says ‘no” I know it’s his job and I’m going to be thankful.”

When you start thinking positive and confident thoughts you start showing it non-verbally. When I meet with somebody I don’t really like and when they’re speaking I literally sometimes think out loud in my thoughts, “He’s not so bad. He’s a good guy. It will all be good.” Or whatever. And I hope that this avoids me openly showing disdain.

So remember:

- chip on your shoulder, “I’m going to change the world, just try and stop me” = good.
- chip on your shoulder, “Investors are all lemmings and I’ll prove it”  = not so good. Even when you don’t say it out loud – it shows.

Image courtesy of BlakeSpot on Flickr

p.s. No. I didn’t spell check this. Get over it. I’ll fix it later when I have time. Right now it’s midnight. I’m at a hotel. I need some sleep. Feel free to ping me with corrections but please don’t be annoyed.

p.p.s. Yes. I do get people who occasionally show a big frustration with me that I don’t edit my posts more carefully. C’est la vie.

(Cross-posted @ Both Sides of the Table)

With Facebook’s IPO just around the corner, the timing of Google’s latest press blitz should probably be regarded with a healthy dose of suspicion, but the unveiling of the Knowledge Graph is an important step in Google’s journey — and a reaffirmation of values diluted by recent dalliances in social networking. Writing for The Atlantic, Alexis Madrigal perhaps describes it best;

“To me, this update is the epitome of what Google does best. The graph makes the process of Googling something faster, easier, and better. The corporate imperative to keep people searching on Google in the face of renewed competition matches up very nicely with consumers’ desires for the best, fastest search experience. That hasn’t always been the case with the company’s social search integration, so this update feels so refreshing. It’s like a friend in the midst of a midlife crisis returning the Porsche and embracing a trusty new four-door.”

(my emphasis)

Exactly. As I’ve written before, I strongly believe that semantic smarts should be hidden very, very deep, and that semantic technologies are at their best when they quietly and unobtrusively make some existing process better. That’s why I like TripIt so much. It gets travel plans into my calendar faster and more accurately than I could type them, and throws in a whole heap of added value as a byproduct of the data ingest process.

Google’s Knowledge Graph is similar; it works with existing search behaviour, and unobtrusively adds a little extra value.

It’s going to be fascinating to see which direction Google takes this capability, and my latest column for SemanticWeb.com explores that in a little more detail.

Those (like me) based outside the US need to remember that none of this works on sites other than google.com right now.

And if you’ve not seen Google’s introductory video, take a look.

Related articles

• Google Knowledge Graph Brings Smarter Semantic Results to Your Google Searches [Video] (lifehacker.com)
• Google Gets Semantic, Launches Knowledge Graph Starting Today (allthingsd.com)
• With Knowledge Graph, Google Can Finally Tell The Difference Between Apple Inc. And Apples (fastcompany.com)
• Google Goes Back to What It Does Well: Finding Things (readwriteweb.com)

(Cross-posted @ Paul Miller - The Cloud of Data)

Flexiant yesterday announced the release of Flexiant 2.0, the updated and highly polished version of their cloud software. Flexiant is a UK based cloud software provider with their heritage from the hosting market. With this Flexiant is telling the world that they are a serious competitor in the Federated Cloud Ecosystem and they are going in full speed to attract the service providers to their platform. It is too early to say how well they will do in a segment dominated by open source platforms like OpenStack and CloudStack but they are putting out a really strong product in the market. The level of flexibility offered by their platform could be very attractive to many service providers. Unlike other cloud platforms, they not only offer some interesting features like highly customizable UI, flexibility, etc., they also offer professional services based on domain expertise so that service providers can go well beyond infrastructure services and offer higher value products .

Some of the key features of this release includes:

• Single pane of glass
• Multi hypervisor
• Multi Cluster
• Highly configurable UI
• Flexible self service
• Multi level metering and billing
• Fine grained control
• Application management
• Intelligent workload placement

Even though some of the features like application management and intelligent workload placements are in the early stages of their evolution (not in terms of maturity but it terms of potential to do really interesting things in the future), I am pretty excited because it fits well into how IT will change as we have Intelligent Platforms available, converting IT itself into a complex adaptive systems. Some of the features I see in the Flexiant platform fits very well into this theme and I am really excited to see how they develop these features in the future.

Their presence in UK gives them a strong footing in Europe where federated cloud ecosystems are norm and I am sure they are focusing on the US market where OpenStacks and CloudStacks of the world dominate the mindshare. People whose thinking is shaped by the economics of scarcity are skeptical about any additional competition but my thinking is shaped by the economics of abundance. With such a worldview, I see Flexiant’s push in the infrastructure market as a welcome move as the competition ultimately benefits end users in terms of variety and rapid innovation. I will keep a closer watch on this platform in the years to come.

I’ve spent a lot of time over the last few months identifying some underlying themes within the cloud space, and some corresponding big opportunities which dropout of those themes. One bucket of opportunities that I’m excited about is services that straddle a number of different IT resources – this could be heterogeneous infrastructure management, application integration or whatever, but platforms that bring various solutions together are hot.

One of these big areas of opportunity is in single sign on. As organizations, and the workers within those organizations move to using a wider variety of applications, they are looking for solutions that ease the pain they feel around authentication and provisioning. IT is also searching for solutions that reduce the tedium and low value work involved in rolling out solutions to users.

One vendor working hard on building significance in this identity and access management space is OneLogin – we’ve written about them a bunch in the past. I took the opportunity recently to spend some time talking with company founder Thomas Pederson for an update into the business.

Pedersen was quick to boast about the success that OneLogin is having in the marketplace – they’re seeing a number of customer sign on with 10k plus users. While the sweet spot that Pederson sees for identity vendors is in the over 150 user bracket – OneLogin is actively moving up the food chain somewhat – they’ve recently won deals for Steelcase, a furniture maker with over 35000 users, as well as a variety of customers in the tens of thousands of users category.

OneLogin has also recently open sources a SAML toolkit and they’re seeing significant take up of this from new SaaS startups that are enjoying being able to offer backwards integration into directory services. Of course the win for OneLogin is that if a startup uses their SAML toolkit, they are well poised to easily integrate with OneLogin itself – and one important aspect of the opportunity for identity vendors is that the larger the number of applications they integrate with, the easier it is to convert customers.

OneLogin has also introduced a free plan that gives companies the ability to use the product free across three different apps. I put it to Pedersen that the three app limit is fairly tight and that most prospects would use a far higher number of apps than this – however he rightly pointed out that many of those customers will use Google Apps and at a later date will add other SaaS applications. It’s also the case that Google Apps users can leverage the Google Apps Marketplace and the SSO offering it has so in a round about way the three application limit on the free plan makes sense..

OneLogin has recently introduced modules for a number of additional applications, including Drupal, Joomla, WordPress and Jira/Confluence from Atlassian – again the integration with these applications just increases the proposition for the product. Alongside this a new reporting engine is proving popular with customers to give visibility into the use of different applications and the like.

The cloud SSO space is an interesting one to watch – I predict there will be significant consolidation in the space over the next year or two as large traditional vendors acquire startups to build out their own portfolios. OneLogin is well placed in all of this and I’m looking forward to seeing them grow in the months and years ahead.

(Cross-posted @ The Diversity Blog - SaaS, Cloud & Business Strategy)

If we keep on comparing everything to Facebook we are forgetting that people are the objects that create the community. Each community from Facebook to G+ to Pinterest to all the others we interact with, we have created those communities. Each one has its place, and each community is like visiting the different communities in the cities we live in. We have our China Towns, our downtown districts, our parks, and neighborhoods and other places we interact with.

Facebook feels like a major downtown district, it is Times Square; everyone goes there at least once in their lives if they can afford it and gawks at the tall edifices that companies and other people have built around their reputations. It is so noisy so chaotic, that we can easily become overwhelmed with the experience.

Google Plus feels more like the arts district, it is our own Freemont Seattle, pictures, books, arts, creativity, and places to hang out and talk about esoteric things with your friends over coffee. It is brilliant in its own way, and while devoid of hipsters, G+ is a thriving dynamic arts community that we can go visit, see beautiful things, and be inspired.

Pinterest has ended up being our fashion district, or our place for personal inspiration, and sometimes a place for our darker thoughts about our self-image, our self-esteem, our place in the world in relationship to who we interact with. It is our place for darker secrets to be exposed by what we idealize ourselves to be, or who we want to be from body image to cooking to shoes.

MySpace has become the run down tenement district filled with dark corners, advertising at its basest level, it is our place to take a look at those who are less fortunate, maybe find people who are living on the darker side of the planet. It is our ghetto, our place to go gawk at the natives and wonder what will become of them later on in life. It is like a dark jazz club in 1930’s Harlem, people go, but lord knows you do not want to be photographed there.

Instagram is our scrap book; it is a place where we drop our memories from where we are, regardless of what we think we are doing. It is food, people, places, snapshots of our lives in ways that no other neighborhood can be. It is our place to push our memories, events, people, and places, things, where we are now, now now, not five seconds ago now. It is our box of memories that we tuck under the virtual bed and sometimes look at and smile thinking how much fun it was to be there.

That is what makes all the discussion around G+ being a ghost town, or indeed anything else being a ghost town. We miss the vibrant communities that have been built up around our personalities. We do not look at them as if they were districts in one big community like Seattle, or even a global community. We have our hucksters, our get rich quick people, and our people standing on street corners with baggies of items that will put your brain into altered states of consciousness. We have all that, and these are the communities that have been built up by the user base.

Some are darker and seedier than others, but if we look at the social landscape as districts in a city, or provinces in a country then we are going to realize that each one of these social communities, even Twitter all serve a purpose, they serve a neighborhood, they serve an area with the things that those who have built the communities feel are important. Ghost town or no, each one has carved a special place in their member’s hearts and minds, and if we deal with each of these communities like the unique expressions of who we are when we are visiting the area, then we can forget about the “ghost town” effect.

We all built this on the software that companies thought would be cool, it is time to start realizing that we have built multiple dynamic communities, just like we build neighborhoods in our cities.

(Cross-posted @ Techwag)