tag:blogger.com,1999:blog-47960262000625186812024-03-12T16:39:17.934-07:00Lars Leckie's BlogA collection of thoughts on topics around venture capital, early stage software, enterprise software, SaaS, virtualization, cloud computing and whatever else crosses my mind as interesting.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.comBlogger36125tag:blogger.com,1999:blog-4796026200062518681.post-7031521657036815062012-09-19T13:42:00.000-07:002012-09-19T13:42:12.099-07:00The Waning Days of the VP of Marketing<span style="background-color: white;"><span style="font-size: x-small;"><br /></span></span>
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<span style="font-size: x-small;"><i><span style="font-family: Helvetica, sans-serif;">Note: This is a guest post I contributed to the Flite blog (</span></i><a href="http://blog.flite.com/home/2012/9/19/the-waning-days-of-the-vp-of-marketing-guest-post-by-lars-le.html"><span style="font-family: "Helvetica","sans-serif";">http://blog.flite.com/home/2012/9/19/the-waning-days-of-the-vp-of-marketing-guest-post-by-lars-le.html</span></a><span style="background-color: white; background-position: initial initial; background-repeat: initial initial; font-family: Helvetica, sans-serif;">)<span class="apple-converted-space"> </span></span><i><span style="font-family: Helvetica, sans-serif;">and
reposted here. </span></i></span><o:p></o:p></div>
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<span style="font-family: Helvetica, sans-serif; font-size: 16px; line-height: 16.5pt;">Technology and obsolescence have always done a ruthless dance
with each other. That’s why the best technology watchers know that it is as
important to forecast when trends will die as it is to predict how long they
will flourish. If you happen to maintain an obsolescence calendar, then you
should add a particular person to it: the VP of Marketing.</span></div>
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<span style="font-family: Helvetica, sans-serif;">That’s right, start clearing out that corner office. The
traditional VP of Marketing belongs to a dying breed, and technology is driving
this.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif;">With urgency, companies are changing the way they engage with
their customers. Engagement is more social, and increasingly happens in
real-time. <a href="http://www.businesswire.com/news/home/20120731005228/en/Constant-Contact-Chadwick-Martin-Bailey-Study-Shows" style="-webkit-transition: all 0.3s;" target="_blank"><span style="color: #00b8e3; text-decoration: none; text-underline: none;">A recent study</span></a> from
Chadwick, Martin Bailey, involving 1,433 consumers, showed that 50% of them are
more likely to make a purchase after viewing tweets from a company. Meanwhile, <a href="http://www.comscore.com/Press_Events/Press_Releases/2011/12/Social_Networking_Leads_as_Top_Online_Activity_Globally" style="-webkit-transition: all 0.3s;" target="_blank"><span style="color: #00b8e3; text-decoration: none; text-underline: none;">comScore reports</span></a> that
82% of global Internet users use some form of social network.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif;">Deeper dives into bigger data are driving engagement strategies,
and titles are toppling. Vamoose goes the VP of Marketing, and in come the VP
of Social Media, the VP of Data and Analytics and a new kind of CMO.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif;">The pace of interaction that companies have with their customers
has grown exponentially in the past several years. Meanwhile, the fluency
requirements for effective marketers bear little resemblance to the tapes that
play in the head of the traditional VP of Marketing. The companies that
we believe in used to look for people who played those tapes. Now they don’t.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif;">Mail-based marketing is going through an electronic renaissance.
Not only has paper-based collateral diminished, but email collateral is driven
by ever more sophisticated platforms. Capable of producing very customized
email newsletters, spitting out precise analytics, and steering readers to
embedded video content, campaign management tools from companies such as <a href="http://www.e-dialog.com/" style="-webkit-transition: all 0.3s;" target="_blank"><span style="color: #00b8e3; text-decoration: none; text-underline: none;">eDialog</span></a> and <a href="http://www.yesmail.com/" style="-webkit-transition: all 0.3s;" target="_blank"><span style="color: #00b8e3; text-decoration: none; text-underline: none;">Yesmail</span></a> require
experts to optimize their capabilities.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif;">Meanwhile, video is driving a siege on the written word, with
epic repercussions for marketers. The new leaders will be fluent with today’s
affordable, approachable and sophisticated video platforms, applications and
tools. They will produce persuasive, customer-facing online video content
themselves, work with business partners on video-based narratives and use
platforms such as <a href="http://www.videogenie.com/" style="-webkit-transition: all 0.3s;" target="_blank"><span style="color: #00b8e3; text-decoration: none; text-underline: none;">VideoGenie</span></a> to tap into customers’
passions through user-generated videos.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif;">The new leaders will be fluent with engagement marketing
platforms such as <a href="http://www.marketo.com/" style="-webkit-transition: all 0.3s;" target="_blank"><span style="color: #00b8e3; text-decoration: none; text-underline: none;">Marketo</span></a>, and will run campaigns that
change with real-time events, as handled by tools such as <a href="http://www.flite.com/" style="-webkit-transition: all 0.3s;" target="_blank"><span style="color: #00b8e3; text-decoration: none; text-underline: none;">Flite</span></a> <em>(Disclosure: Hummer Winblad is a
venture partner of Marketo and Flite.) </em>These leaders will
empower their advocates through <a href="http://influitive.com/" style="-webkit-transition: all 0.3s;" target="_blank"><span style="color: #00b8e3; text-decoration: none; text-underline: none;">Influitive</span></a>. They will be
buyers of big data analytics and make data-driven decisions in unprecedented
ways.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif;">My prediction is that the average age of the head of marketing
in organizations will drop by a decade or two, very quickly. It’s not enough to
know that the new platforms exist; it’s about having experience with them in
your DNA. The new marketing leaders will have grown up on the new, social
platforms.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif;">In large and small organizations, they’re already arriving.<o:p></o:p></span></div>
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Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-37748399560243687762012-04-19T13:32:00.000-07:002012-04-19T13:34:08.797-07:00Software Defined Networking - Incoming Disruption<span id="internal-source-marker_0.7222165882121772"><span style="font-family: Arial; font-weight: bold; vertical-align: baseline; white-space: pre-wrap;">Trends and Opportunities in Software Defined Networking</span></span><br />
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<span style="font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">At Hummer Winblad, we spend most of our time focusing on the software space. Within software, Software Defined Networking (SDN) is an area that we are particularly bullish on at the moment. A lot of interesting companies are emerging that are challenging the silicon oriented networking dominance using creative SDN solutions. Imagine a world where you can have the software innovation cycle sitting on top of one of the most important pieces of the infrastructure world; networks. Servers have been virtualized, storage has been virtualized...now the next category to fall is networking. </span><br />
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<span style="font-family: Arial;"><span style="white-space: pre-wrap;">It is early in this trend, but if the attendance and excitement at the <a href="http://opennetsummit.org/?utm_source=SDNCentral.com+Mailing+List&utm_campaign=49c182a720-ONS_ticket&utm_medium=email">Open Networking Summit</a> this week is any indicator it will be a very fast moving market. Attendance has tripled since last year and my guess is they will need a new venue for next year.</span></span><br />
<b><span style="font-family: Arial; vertical-align: baseline;"></span></b><span style="font-family: Arial;"><span style="white-space: pre-wrap;"><br /></span></span><span style="font-family: Arial; font-weight: bold; vertical-align: baseline; white-space: pre-wrap;">Challenges to the Cisco Networking Dominance</span><br />
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<span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">Cisco has dominated the commercial networking sector for a long time and is a fantastically competitive company. With their acquisition of Linksys in 2003 they have expanded to dominate the residential and small business markets as well. This has typically meant that users of Cisco and Linksys networking hardware were limited by the features built into their devices through proprietary firmware and hardware. This is also true of the hardware provided by many other networking manufacturers. Cisco used to stay well clear of the other technology areas and work well with partners like server vendors. This is changing and forcing everyone to rethink their alliances. Dell has added over 1000 networking engineers in the last year because of this shift. Cisco’s dominance, coupled with operators’ desire to control network flows themselves prompted a new era, and standard…</span><br />
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<span style="font-family: Arial; font-weight: bold; vertical-align: baseline; white-space: pre-wrap;">…Enter Disruption: The OpenFlow Standard</span><br />
<span style="font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">The OpenFlow standard</span><a href="http://www.technologyreview.com/biotech/22120/" style="font-weight: bold;"><span style="color: black; font-family: Arial; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">originated at Stanford University</span></a><span style="font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">, and was founded by Nick McKeown and some of his colleagues. We first heard about this from the postgraduate work of one of the founders of a company we funded in 2001 called <a href="http://www.voltage.com/">Voltage Security</a>. Guido then went on to start BigSwitch in the OpenFlow space. The standard was created in reaction to a general frustration that companies like Cisco and Hewlett Packard were essentially “walled gardens”. It was not easy for network technologists to control the flow of data and information through networks. With OpenFlow, McKeown and his colleagues were able to circumvent Cisco and HP hardware to optimize and establish their own desired network flows.</span><br />
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<span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">OpenFlow was the pioneer in SDN, and it officially</span><a href="http://www.openflow.org/wp/about/" style="font-weight: bold;"><span style="color: #222222; font-family: Arial; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">launched as a networking specification in 2008</span></a><span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">. It was hailed as one of the</span><a href="http://www.technologyreview.com/web/22120/" style="font-weight: bold;"><span style="color: #222222; font-family: Arial; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">top 10 emerging technologies in 2009</span></a><span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">, and paved the way to the</span><a href="http://opennetsummit.org/why.html" style="font-weight: bold;"><span style="color: #222222; font-family: Arial; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">Open Networking Foundation</span></a><span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;"> in 2011. As of 2012, OpenFlow can be</span><a href="http://opennetsummit.org/why.html" style="font-weight: bold;"><span style="color: #222222; font-family: Arial; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">installed on a list of commercially available routers</span></a><span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">.</span><br />
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<span style="font-family: Arial; font-size: small; vertical-align: baseline; white-space: pre-wrap;">Changes in the Data Center</span></h2>
<span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">Using software defined networking such as that provided by OpenFlow, a network administrator can quickly implement changes to an entire network or specific segments by</span><a href="http://opennetsummit.org/why.html" style="font-weight: bold;"><span style="color: #222222; font-family: Arial; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">writing code which can modify the logical map of the network</span></a><span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;"> within the software. This means that network administration can be done remotely, including making changes to the physical network through software. What once required a technician to physically move a cable from one port to another can now be done through software. This is similar in scope to virtual servers and the Amazon Elastic Compute Cloud.</span><br />
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<span style="font-family: Arial; font-weight: bold; vertical-align: baseline; white-space: pre-wrap;">The New Networking Alliances</span><br />
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<span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">The development of software defined networking has created new alliances between various networking companies. Currently, Cisco, Juniper, HP, NEC, T-Mobile, Ericsson, and NNT DoCoMo are</span><a href="http://www.technologyreview.com/web/22120/" style="font-weight: bold;"><span style="color: #222222; font-family: Arial; font-weight: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;">working with OpenFlow</span></a><span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;"> to set the standard for software defined networking. These new alliances will hopefully lead to greater innovation at a pace that looks more like software than 2+ year silicon cycles.</span><br />
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<span style="color: #222222; font-family: Arial; font-weight: normal; vertical-align: baseline; white-space: pre-wrap;"> </span></div>
<span style="vertical-align: baseline;"><span style="font-family: Arial;"><span style="white-space: pre-wrap;">One thing is for certain – SDN will be a widely adopted standard in the near future. I cant say for sure that it will be OpenFlow, or if it will be 2013, but there will be some fantastically interesting and big companies that are created in this technology wave. We are still at the early stages of SDN, and exciting things are bound to happen in the space. </span></span></span>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-69243491174802821852012-03-25T17:33:00.003-07:002012-04-19T13:16:51.204-07:00C100 Guest BlogHere is a link to a recent blog post from me that originally appeared on the <a href="http://www.thec100.org/blog/2012/3/22/c100-the-not-so-secret-canadian-entrepreneur-organization.html">C100 website</a> titled<br />
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<a class="journal-entry-navigation-current" href="http://www.thec100.org/blog/2012/3/22/c100-the-not-so-secret-canadian-entrepreneur-organization.html" style="color: black;">C100 – The Not-So-Secret Canadian Entrepreneur Organization</a></h2>
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I am deeply honoured to be stepping in as co-chair of the C100. It is an amazing organization that Chris Albinson, Anthony Lee and other Canadians have worked tirelessly in their free time to build. I wanted to write this blog post to give you a little of the reasons why I'm excited…I will start with a quote from our founding co-chair, Chris Albinson as I think this should be our new C100 motto…<br />
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“This is beyond owning some podium. It’s about claiming the podium as ours, painting it red and white, crushing it, and sprinkling the dust into the eyes of our competitors. And not apologizing ever.” [see the video <a href="http://embed.vidyard.com/landingpage/BEKHutOlGPZidAEcesSdBA">here</a>]<br />
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Me and Chris Albinson at the 3rd Annual CEO Tech Forum.<br />
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The C100 is going to help make the next billion dollar Canadian tech company. We are going to show people that Canada has the smartest engineers on the planet and founders who run circles around their brethren. I believe this strongly enough that I’ve already invested in two, Brian Wong from Kiip and Joshua McKenty from Piston Cloud. I’m encouraging teams I work with to build out engineering organizations in Canada the way other tech giants like Facebook, Zynga and others are doing. We will do it by being bold, by breaking some rules and by working together. Lets make it so the next great canadian tech acquisition is about a canadian company buying up US companies…I was just at the Digital Puck Growth Stage event for Canadian tech companies and there are some clear candidates for this role including <a href="http://www.freshbooks.com/">Freshbooks</a>,<a href="http://www.athinkingape.com/"> A Thinking Ape</a>, <a href="http://www.vineyardnetworks.com/">Vineyard Networks</a>, <a href="http://www.intelliresponse.com/">Intelliresponse</a>, and many more. We are on a roll.<br />
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I want the next Canadian who visits the valley like I did 15 years ago to have a team of Canadians rooting for their success and helping them along the way. When I moved here, I might as well have been from somewhere in the Midwest…there was probably a better organized group of founders and tech folks from Minnesota or some far flung eastern European country than from our great homeland. That’s changing, and I’m excited to be a part of it.<br />
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I am joined in this pursuit by a fantastic organizing committee and sponsors who share the vision of building something great. We couldn’t do this without the people at KPMG, BDC, SVB, PageMill Partners, Sheppard Mullin, EDC, SDTC and many others. The Canadian Consulate, especially Thierry has had a huge hand in pulling the group together. The C100 is off to a rocking start thanks to the leadership of Chris, Anthony and Atlee. To be clear for everyone, Chris isn’t going anywhere and is as dedicated to C100’s success as he ever was. We are fortunate to have him remain on the Organizing Committee and heading up a few of our important initatives. Here are some amazing stats over the last two years:
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30 Events Organized<br />
100+ Charter Members<br />
2500 People in the C100 Network<br />
3000+ Entrepreneurs attended C100 Events<br />
$417M venture investment into C100 companies<br />
$3B in exit market cap including Radian6, Kobo, Rypple and many others.<br />
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I believe it's working. The organization is an all-volunteer army of Canadians who care about Canada. We are still a toddler as far as an organization and have lots more growing to do.<br />
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I want to work with people who when they use all the famous start up quotes like ‘hockey stick revenue projections’, ‘skating to where the puck will be’, etc actually give (to use the tragically hip line) a f$*k about hockey. Or at least name a hockey player beyond Gretzky.<br />
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So, I’m sneaking into the arena to put a loonie under the ice, and I’m asking you to skate hard with me. Lets have some fun and build something great together. Go Canada.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-22999993785838199192011-01-05T10:18:00.000-08:002011-01-05T10:26:34.303-08:00Metrics for High Velocity BusinessesLate late year I was at the <a href="http://www.mediabistro.com/freemiumsummit">Freemium Summit</a> in NYC put on by Charles Hudson and it reminded me that I had planned to do a follow up from a previous post on the <a href="http://larsleckie.blogspot.com/2010/02/upcoming-freemium-summit.html">High Velocity Business Model</a>.<br /><br />At Hummer Winblad, since we invest only in software companies so we pay careful attention to disruptive trends like the high velocity business model. I describe this model as one that breaks the enterprise selling model to reach both enterprise and SMB customers. <br /><br />In my previous post I pointed out that these businesses focus heavily on consumer style online marketing, have awe inspiring products that are easy to try (specifically getting a quick time to value without talking to a sales person), leverage web sales plus low touch inside selling teams and rely heavily on metrics. Later in this post I will give a sample of metrics from one high velocity business that I have had the pleasure of working with.<br /><br />Once a high velocity businesses coalesces on their metrics they have unprecedented advantages on the sales model – I believe this represents one of the biggest disruptions in the application market that we have seen in 10+ years. <br /><br />There are a lot of people to give credit to here, most notably SolarWinds who went public in may 2009 and is an incredible business engine. If you haven’t spent some time understanding their customer acquisition model, it will be worth your time to download their S1. My current poster child for this model would be <a href="http://www.zendesk.com">Zendesk</a> in the customer support area – take a run through their funnel by doing the google search for “customer support software”, following their link to watch a video, sign up for an account and see how long it takes to customize your own version and start collecting tickets. I would be surprised if you aren’t a customer 30 minutes later. Rumor on the street is that they actually have no sales reps at all, so are really leading the way in the high velocity model. From the recent freemium summit I could add <a href="http://www.surveymonkey.com">SurveyMonkey</a>, <a href="http://www.yousendit.com">YouSendIt</a>, <a href="http://www.yammer.com">Yammer</a> and others.<br /><br />Below is a set of metrics pulled together from a high velocity business that I am familiar with. To protect the innocent, I will decline to name the company or when these metrics were collected. To give a rough order of magnitude for the business, it is profitable at about $15M annual runrate and growing by about 80% year over year. I have sat down with three other companies in the last quarter who validated many of these metrics as either comparable with theirs, or good achievable goals to pull into their businesses. <br /><br /><span style="font-weight:bold;">High Velocity Model</span><br /><br />This company runs a true high velocity model where they spend $80K in key word buying to generate about 500 high quality ‘warm’ leads per month. These leads are then fed into a round robin system for eight inside telesales team members. There are no assigned territories and you have to be in your seat in the office to get leads. The team is:<br />7-8 telesales reps<br />2 account managers (work on upsell opportunities in install base)<br />1 hands on VP of Sales<br /><br />They manage aggressively to weekly metrics, focus on hiring and managing out any non-top performers. The process is highly repeatable and in the eyes of the company the business is an endurance sport – one which you can succeed at if you follow the process and drive your leads forward. The timeframe is interesting to note as most enterprise companies work on a quarterly/yearly cadence whereas high velocity companies are more of a weekly/monthly metrics pace. This is a huge cultural change for most organizations but one that can provide sustainable advantage just like when engineering can truly deliver on a weekly agile deployment schedule.<br /><br /><span style="font-weight:bold;">The Numbers</span><br /><br />Sales Cycle 45 days<br />New Deals per month 45<br />Deals per rep per month 6.5<br />ACV per deal 16K (average)<br />ACV quota per rep per year 1.2M (100k per month)<br />Target 8% conversion to sales<br />Rough efficiency model = 80K ad spend plus 80K salary spend yields 1M in ACV per month.<br /><br /><span style="font-weight:bold;">Rep Profile</span><br /><br />The average age of the current sales reps is in the mid thirties. The company looks for people with SaaS, domain and inside selling experience and specifically for people who do not have field rep experience as historically they do not work culturally as they cannot transition to the pace and urgency needed for inside selling. The reps are trained for 2-3 weeks and nurtured by the VP Sales with a goal of getting them productive within 3 months. The training is around the product, the value proposition, the sales model (and metrics).<br /><br />Their hiring model has reached a steady state where they are replacing about one rep a quarter. All of the metrics are public in the company so the culture drives the performance. You can’t walk into their sales area without seeing the whiteboard with all the stats. If you want further details on how the reps are compensated in this model, drop me an email and I’d be happy to share my insights.<br /><br /><span style="font-weight:bold;">Sales Process</span><br /><br />The sales process is an eight step methodology that is implemented through (no surprise here) <a href="http://www.salesforce.com">Salesforce</a>. <br /><br />Step 1 (10%) – lead is qualified (interest, project has requirements, timing is <6 months) If a rep doesn’t act on a lead in two hours it is sent to another rep.<br />Step 2 (25%) – product identified, value estimated, pricing discussed, discovery process, demo scheduled<br />Step 3 (50%) – demo completed (prerecorded, webinar or 1:1), tech requirement reviewed, decision maker identified<br />Step 4 (60%) – trial in progress, SE engaged, verified requirements<br />Step 5 (75%) – selected as vendor, pricing sent<br />Step 6 (90%) – awaiting signed paperwork, verbal commit<br />Step 7 (95%) – received paperwork, submitted to finance for review<br />Step 8 (100%) – received payment<br /><br />The sales reps run the process and use the SE’s for running demos. The company uses an prerecorded demo heavily and have tracking to see when a prospect views it. The SE’s run webinars three times a week for contacts that the sales team has in process. Private SE demos are used for well qualified customers and larger accounts that identify themselves early.<br /><br /><span style="font-weight:bold;">Metrics</span><br /><br />The process is heavily followed by metrics on a weekly basis. They have weekly commit and review meetings to follow the progress. Typically a rep needs to have somewhere in the area of 30 active deals to make their monthly numbers so this is watched closely. Successful reps are at a >25 calls per day volume. They have found that tracking bookings alone is not enough – you need to pull out the underlying activity rate to get a good pulse on the process.<br /><br />Tracked (by rep by week):<br />Activities (moving people through process)<br />Total call volume<br />Ave Daily Calls<br />High Quality Leads<br />Demos driven (broken out prerecorded, webinar, 1:1)<br />New trials<br />Net new deals<br />Net new large accounts<br />Seats<br />MRR<br /><br />Hopefully this is thought provoking for those of you in, or aspiring to, the high velocity model.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com3tag:blogger.com,1999:blog-4796026200062518681.post-41282221020698083262010-02-21T14:22:00.000-08:002012-08-15T14:17:32.838-07:00Upcoming Freemium SummitBelow is the details for a great event that is worth attending called the Freemium Summit. The organizer, Charles Hudson, has pulled together a solid list of speakers on this important topic. I will see you at the event!<br />
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At Hummer Winblad, we are very focused the freemium model as well as on other new models of B2B and enterprise software. Our name for this new model of software selling is the "high velocity business model" and we have a number of companies who are leveraging this model successfully including <a href="http://insidesales.com/">InsideSales.com</a> <a href="http://www.sliderocket.com/">SlideRocket</a>, <a href="http://www.vkernel.com/">VKernel</a>, <a href="http://www.five9.com/">Five9</a> and some of our open source companies.<br />
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The High Velocity Business Model<br />
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- Leverage Consumer Internet Techniques on the Front End of Your Cycle. This means reaching your B2B customers by taking a consumer approach to marketing, lead gen, keywords, search marketing, etc. Take all the spend from traditional marketing (trade shows, PR agencies, etc) and put it into well run keyword campaigns.<br />
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- Use Only Inside Sales Teams. To make this work you will need a hands on VP of Sales who has run an inside sales team before. The team needs to be able to sell strategically over the phone and resist the temptation to go visit the customer.<br />
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- Nurture Prospects. Develop deep content on your site and reconnect with prospects often to keep this material in front of them. Let the prospects start the sales cycle with your content and then have them talk to a sales rep once they have identified themselves as a prospect. Use the new era of tools (MarketBright, Manticore, Marketo, ActON, etc) to automate this process.<br />
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- Develop Strong Metrics. The high velocity model is an endurance sport and you need to have your handle on every step of the process. Unlike traditional enterprise models with monthly and quarterly cycles, the high velocity model moves in weeks and months. I will follow up with a blog on these metrics in more detail.<br />
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- Make the Product Accessible. This is the core of the freemium and high velocity models. The customers need to be able to rapidly try the product - so you need to architect the product and provisioning system so that there is no friction to having a prospect get their hands on the product. Drive them to value quickly.<br />
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The high velocity business model requires a different approach to enterprise sales and marketing. In many cases it takes team members with different DNA and a commitment to continually improving the process. As we have seen with a number of our companies, once you make this commitment it can start to freewheel in a very impressive way.<br />
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<br />
Freemium Summit<br />
Friday, March 26th, 2010<br />
UCSF Mission Bay Conference Center<br />
San Francisco, CA<br />
<a href="http://freemiumsummit-nextgen.eventbrite.com/">Register</a> <br />
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The first Freemium Summit is a one day event focused on exploring what it takes to succeed under the freemium business model. Across all segments of the media landscape, entrepreneurs and executives are pioneering models that combine a free offering with a premium, paid offering. This hybrid business model is one of the most exciting areas of business model innovation impacting the world of media and the Freemium Summit will explore the most important topics on the minds of leading practitioners.<br />
Confirmed Speakers<br />
• Toni Schneider, Automattic (WordPress)<br />
• Matt Brezina, Xobni<br />
• Aaron Levie, Box.net<br />
• Phil Libin, Evernote<br />
• Tom Conrad, Pandora<br />
• Drew Houston, Dropbox<br />
• Ranjith Kumaran, YouSendIt<br />
• Ben Chestnut, Mailchimp<br />
• Lance Walley, Chargify<br />
• Isaac Hall, Recurly<br />
• Lincoln Murphy, Sixteen Ventures<br />
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Agenda for the Day<br />
• 8:00 AM - 9:30 AM Registration<br />
Join us for coffee and other assorted treats during registration. Bring your ticket confirmation and ID to help expedite registration. <br />
• 9:30 AM Welcome to the Freemium Summit<br />
Charles Hudson, Host, Freemium Summit <br />
• 9:45 AM - 11:15 AM Freemium for Consumer Internet Businesses<br />
Our consumer Internet content block features 20 minute talks from leading companies making the freemium business work in consumer Internet applications.<br />
o Toni Schneider, Automattic<br />
o Phil Libin, Evernote<br />
o Tom Conrad, Pandora<br />
o Drew Houston, Dropbox <br />
• 11:15 AM - 11:40 AM The Abuse that Comes with Free<br />
Switching to a freemium model isn't always easy. What can go wrong when switching to a freemium model? How do you handle the influx of new users? Hear one company's cautionary tale of what can happen when switching to a freemium model.<br />
o Ben Chestnut, Mailchimp <br />
• 1:00 PM - 2:00 PM Freemium and the Enterprise<br />
Curious about what it takes to make freemium succeed when developing enterprise or business applications? Our group of esteemed experts will share their thoughts on what it takes to succeed in this space.<br />
o Aaron Levie, Box.net<br />
o Matt Brezina, Xobni <br />
o Ranjith Kumaran, YouSendIt<br />
• 2:00 PM - 3:00 PM Making Freemium Work on Mobile Platforms<br />
Mobile is a rapidly growing opportunity for people interested in the freemium model. What does it take to succeed using a freemium model in mobile? Our speakers will share their thoughts on this exciting topic. <br />
• 3:00 - 3:30 PM Break<br />
Take a moment to recharge your batteries and top up your tank with sugar or caffeine. <br />
• 3:30 - 4:15 PM Freemium Games - Succeeding with Free-to-Play Games<br />
Free-to-play games are revolutionizing the games space. Why is this working? What does it take to succeed? Our pair of speakers will share their thoughts on how to build a successful freemium games business. <br />
• 4:15 PM - 5:00 PM Building a Freemium Business on Someone Else's Platform <br />
Are you a developer looking to build a successful business on someone else's platform? How do you mitigate risks? Is this something that is in fact doable? Join us for a set of interesting talks on this critical topic. <br />
• 5:00 - 5:45 PM Payments and Monetization for Freemium Businesses<br />
We'll close the day talking about what it takes to succeed in generating revenue from your users. Should you build your own billing system? Should you support alternative payments? Our closing panel will shed some light on this important topic. <br />
• 5:45 Closing <br />
Within the major themes above, the Freemium Summit will focus on the most important specific topics facing entrepreneurs and executives today:<br />
• Product segmentation for freemium success<br />
• Analytics, metrics, and measurement best practices<br />
• Customer acquisition and retention strategies for freemium businesses<br />
• Success stories<br />
• Lessons learned - the limits of the freemium model<br />
• Businesses that looked at freemium and opted for another model (subscription, advertising, etc)<br />
We will start announcing our first set of speakers in early January. To stay in touch with us, you canfollow us on Twitter, join our Facebook fan page, or subscribe to our mailing listLars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-90625799138431776292009-03-20T11:32:00.000-07:002009-03-20T11:56:00.657-07:00Cloud ComputingCloud Computing is topic that has been on our minds at Hummer Winblad for a few years now. It represents a very interesting shift in the data center that we are all used to working with.<br /><br />You can see a recent cloud computing session I moderated <a href="http://www.undertheradarblog.com/blog/video-cutting-through-the-cloud-round-table-with-james-urquhart-and-friends/">here</a>. This event was organized by the good team over at DealMakerMedia who also recently published the <a href="http://www.undertheradarblog.com/blog/cloud-computing-ecosystem-map-2009/">cloud computing ecosystem map</a>. This map covers a large and growing (thanks to some creative rebranding of many companies around cloud computing) list of companies in the space. We were pleased to see several of our companies there including <a href="http://www.elastra.com">Elastra</a> - the enterprise cloud company, <a href="http://www.vkernel.com">VKernel</a> - Systems management and chargeback for private clouds (virtualization), <a href="http://www.birst.com">Birst</a> - cloud BI and <a href="http://www.ariasystems.com">Aria Systems</a> - cloud billing infrastructure.<br /><br />Cloud computing is following some interesting adoption patterns. Amazon.com has lead the way by providing a public cloud offering and they are rapidly adding enterprise features and partners such as IBM. The adoption of cloud computing is rapid in the start-up space - almost every company we meet now has some leverage on the back end from cloud infrastructure. From our discussions with larger companies, CIO's and enterprise developers cloud is also starting to get traction there as well. This is one of those trends where if the corporate IT department cannot offer cloud solutions that are blessed, the developers will put their credit card in and start using Amazon Web Services. It just takes too long to get resources inside an organization compared to firing up an instance on EC2 in 5 minutes to beta test an idea.<br /><br />In our informal survey the adoption of cloud is progressing in the following categories:<br /> - financial services<br /> - technology (including startups)<br /> - Medical<br /> - education<br /> - government<br /><br />The initial use cases are usually non-core applications and batch processes. It is being followed by more sustaining use cases over time. This wave is happening...and corporate good corporate IT departments are trying to get ahead. We believe the future of cloud computing will include public clouds like Amazon, private clouds run in corporate datacenters, semi-private clouds managed and run by the likes of IBM on behalf of corporate clients - and a common language/infrastructure to move between these infrastructures.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-35518718347657579782008-10-23T22:19:00.000-07:002008-10-23T22:36:35.521-07:00Gartner Gives the Nod to SaaS ModelIn a report that was released this Wednesday, Gartner made some bold predictions around the near-term future of SaaS...<br /><br />(from <a href="http://www.informationweek.com/news/services/saas/showArticle.jhtml?articleID=211600038">Antone Gonsalvez at InformationWeek</a>)<br /><blockquote><strong>SaaS Revenue Growing, Market Set To Double By 2012</strong><br />Driving the growth in SaaS deployments is businesses' desire to reduce their IT capital expenditure budget and to rapidly implement software that supports a specific business need, Gartner said.<br /></blockquote><blockquote>Worldwide software-as-a-service revenue in the enterprise application market is<br />on pace to surpass 2007 sales by 27% and to more than double by 2012, a market<br />research firm said Wednesday. Revenue this year is on track to rise above<br />$6.4 billion, compared with $5.1 billion last year, Gartner said. In four years,<br />revenue is expected to reach $14.8 billion. </blockquote><p>While it is always a little dangerous to follow predictions from analysts with considering your specific market or application, this announcement is an interesting one given the current economic conditions. In essence they are endorsing that the SaaS model has increasing leverage over existing software models as the IT spending tightens.</p><p>We share this premise at Hummer Winblad and have invested heavily in the SaaS model...with over 15 portfolio companies to date including Omniture (web analytics), EmployEase (HR management), Aria Systems (Subscription Billing), etc. We see the model having some key strengths in this market:</p><p>1) Lower entry point customers - easier to get started, lower risk to trial, limited upfront expenditure. Also, the ability to buy or try without getting all the traditional enterprise sales points involved (IT, finance, etc)</p><p>2) Build vs Buy for business services - SaaS models become more interesting as companies debate if they should try to build out the service themselves via internal teams, or go with a known working solution where they can leverage existing best practices.</p><p>3) Lower TCO - often the best way to justify a SaaS offering is to have a customer lay out the true cost of the internal infrastructure </p><p>The SaaS wave appears to be continuing to gain momentum...lets hope we can really see the category double by 2012...</p><p> </p><p> </p><p> </p><blockquote><p> </p></blockquote>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-56659791040705285362008-09-05T16:02:00.000-07:002008-09-05T20:46:37.345-07:00SlideRocket Now in Public BetaThis week one of our portfolio SaaS companies as launched into public beta - this means that now I can just direct all those email requests for accounts straight to this <a href="http://www.sliderocket.com/signup.html">link</a>.<br /><br />SlideRocket is a rich Internet application that provides everything you need to design professional quality presentations, manage and share libraries of slides and assets, and to deliver presentations in person or remotely over the web. It also has analytics that tell you who spends time on each slide when they view the presentation.<br /><br />SlideRocket announced this release at the Office2.0 conference in San Francisco. If the blog coverage of the show is any indication then they won 'best in show':<br /><br /><br /><blockquote>Finally, my favorite demo - and one I even signed up for. <a href="http://www.sliderocket.com/" target="_blank">SlideRocket</a> is like<br />Powerpoint on steroids. <a title="Sliderocket" href="http://blogs.zdnet.com/BTL/images/author.jpg"></a>If you’re a presentation<br />builder, be sure to check this out. It went into public beta this week and will<br />head into a full-scale launch later this month</blockquote><br />Full story at <a href="http://blogs.zdnet.com/BTL/?p=9919">ZDNet</a>.<br /><br />Take a tour.<br />Like to learn more? Click <a href="http://www.sliderocket.com/productTour.html">here</a> to take a tour of SlideRocket.<br /><br />Sign up.<br />SlideRocket is now in public beta! <a href="http://www.sliderocket.com/signup.html" target="_self">Sign up for a free SlideRocket account</a> and get started today.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-72732176363341002552008-07-20T22:44:00.000-07:002008-07-21T13:40:58.926-07:00YouTube...An Unexpected Enterprise Friend<p class="MsoPlainText">A few months back one of our portfolio companies did something unexpected - the results were even more unexpected. At Hummer Winblad we often joke that we focus on the "boring side of software". By this we mean that many of our companies tend to be described with words like core, infrastructure, B2B, backend, etc. We believe that these companies provide the infrastructure under which the next generations of software are built. They will be interesting and successful companies but it is unlikely your mom will ever know their names.</p><p class="MsoPlainText">What we don’t usually expect is for our companies to make <a href="http://www.youtube.com/">YouTube</a> videos.<?xml:namespace prefix = o /><o:p> </o:p></p><p class="MsoPlainText">The team over at <a href="http://www.vkernel.com/">vKernel</a> did exactly that. Here is a company that is busy making the system management tools to help enterprises cope with the explosion of virtualization in their environments...and driving traffic from a <a href="http://www.youtube.com/">YouTube</a> video. The team made a quick parody of the now-classic <a href="http://www.apple.com/getamac/ads/">PC-Mac advertisement</a> to talk about the fight against companies that solve this problem with <a href="http://en.wikipedia.org/wiki/Software_bloat">bloatware</a>. </p><p class="MsoPlainText">Bloatware companies (the PC) are big, cumbersome products that are IT intensive to use and packed with hard-to use features. Counter that with <a href="http://www.vkernel.com/">vKernel</a> (the Mac) where they are using virtual appliances as their model for one product to solve one problem.</p><p class="MsoPlainText">You can see the video <a href="http://www.youtube.com/watch?v=G3NvhE11ctU">here</a>.</p><p class="MsoPlainText"><o:p></o:p>The message worked - they don’t have a huge volume of hits given that the average YouTube search is more likely to be "Britney Spears" not "virtualization system management". But in the first day they had prospects that jumped straight to the qualified lead status. </p><p class="MsoPlainText">This kind of social media marketing is covered in a book by Charlene Li and Josh Bernoff called <a href="http://www.forrester.com/Groundswell/book.html">Groundswell</a>. In the book I was introduced to another "boring" software company that has a whole series of successful YouTube videos. <a href="http://www.youtube.com/results?search_query=greg+the+architect">Greg the Architect</a> is the new social media evangelist for the SOA vendor TIBCO. Greg happens to be a Ken doll but if you care about things like ROI around SOA then you might be one of the 75,000 viewers of his videos...an impressive following. [anyone looking for SOA, please take a look at Mulesource, the opensource ESB portfolio company]</p><p class="MsoPlainText">My hat goes off to vKernel and TIBCO for riding the groundswell in their respective markets. I think you will be seeing a lot more social media from both companies based on this success. </p><p class="MsoPlainText">If you are looking to do something similar at your company I would suggest reading Groundswell where the authors give lots of background on how to gauge your customers and target the community with the right tools.</p>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com1tag:blogger.com,1999:blog-4796026200062518681.post-59301301356171387892008-07-16T11:17:00.000-07:002008-07-16T11:29:39.350-07:00ACM Ecommerce ConferenceLast Friday I had the pleasure of attending the ACM Ecommerce conference in Chicago. I would like to thank John Riedl, the organizer, for putting the conference together and inviting me for the keynote. I had the pleasure of meeting members of the core technical teams from Amazon, Yahoo!, YellowPages, and researchers from great technical schools like Carnegie Mellon and Stanford.<br /><br />This conference delved deeply into the algorithms and science underlying ecommerce. There were talks ranging from combinatorial auctions, revenue optimization and game theory applied to ecommmerce. My talk, which can be found on SlideRocket <a href="http://app.sliderocket.com/app/FullPlayer.aspx?id=A7D95252-E883-32C1-1D1C-3EFDBA4906FA">here</a>, was titled "Investing in Algorithms". Below is an excerpt from my abstract:<br /><br /><blockquote>In 2008, the software market is rapidly evolving towards Software-as-a-Service<br />and Cloud computing, and away from the on-premise delivery model. In exploring<br />these new models we will see that this is more than a business or delivery model<br />phenomena affecting ecommerce - it is a shift that fundamentally changes<br />expectations of what software can accomplish. In this model data is king.<br />Algorithms and analytics become significantly more relevant as the data is now<br />housed in a central location.<br /></blockquote><br />The talk let me highlight several key areas of investment for Hummer Winblad through the lens of a few of our portfolio companies. Because I gave the presentation in SlideRocket I was able to show how SaaS drives new sources of data compared to on-premise solutions. During the presentation I pulled up the historical data of a previous presentation that I had emailed to a different group - and show how many times the presentation was viewed and which slides the audience spend the most time reviewing. Hard data to collect with PowerPoint!<br /><br />I then talked about Baynote as an example where SaaS companies can use their own products as part of the sales cycle. Baynote requires only a few lines of code to be integrated to a customers site to be up and running. Data is then fed back to the Baynote SaaS application and quickly the recommendation/search results can be surfaced. Baynote quickly gathers A/B testing to show the uplift of revenue. If you attempt this type of solution on-premise there is a limit to the data that a vendor will see, and you have many steps (procure hardware, configure hardware, install software, integrate product, etc) before these uplift effects could be shown.<br /><br />The last theme I touched on in my talk was the ability of SaaS to provide closed loop actionable analytics. I highlighted our companies Omniture and Signal Demand as examples where the SaaS vendors can both make recommendations and stick around to quantify the results.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-47406202078319627422008-07-07T21:08:00.000-07:002008-07-17T17:13:51.090-07:00Upcoming Talk on RUPDATE - The slides from this presentation are now awailable <a href="http://sdforum.org/index.cfm?fuseaction=Document.filterdocumentlist&topicRadio=Topic&topicOnly=22&docPublishYear=getAllYears">here</a> courtesy of SDForum.<br /><br /><br />For those of you interested in R - the open source analytics platform - I have copied an announcement for a great event in Palo Alto next week hosted by SDForum.<br /><br />At Hummer Winblad, I have noticed that many of the companies we talk to and many of our portfolio companies are using R as a core technology in their product. It allows for developers to use statistical and data analysis tools without paying money to SAS or another vendor for each copy of their software. I think that we are seeing an increasing use of these type of tools with the SaaS model because in general the applications have more data available to them. For example, SaaS allows application vendors to also use analytics across their customer set to watch for usage trends.<br /><br /><p class="MsoPlainText">Jim Porzak and Michael Driscoll will present...</p><p class="MsoPlainText">A Gentle Introduction to R and its Applications in Business Intelligence</p><p class="MsoPlainText">R, the open source environment for statistical computing and data analysis, has been adopted by over one million users worldwide since its V1.0 release in February, 2000.<span style="font-size:+0;"> </span>Although primarily used within academia, the life sciences, and financial engineering firms, R has promise in areas overlapping with "Business Intelligence."</p><p class="MsoPlainText">Specifically, R is a powerful tool for marketing applications such as customer segmentation and cluster analysis, and can be used to achieve a better understanding of business data in general.<?xml:namespace prefix = o /><o:p> </o:p></p><p class="MsoPlainText">We will start with a brief history of R and its present areas of use.</p><p class="MsoPlainText">We will then position R's functionality within the BI space and highlight its strengths compared to classical BI tools.</p><p class="MsoPlainText">For the techies, we'll show R in action and discuss some of the language's powerful features.<span style="font-size:+0;"> </span>Most of the presentation, however, will be a series of brief case studies showing concrete uses of R in our respective practices.<span style="font-size:+0;"> </span>After the formal presentation, we invite interested R users to stay for a few minutes to discuss forming a local "Use R" group.</p><o:p></o:p>SPEAKERS: <p class="MsoPlainText">Jim Porzak</p><p class="MsoPlainText">Jim is the Senior Director of Analytics at Responsys, Inc. in San Francisco. He has been doing Business Intelligence for the last 20 years, focusing on marketing applications for the last decade. He has actively used R, since 2002 and last presented R to the BI Sig in October, 2004. Next month Jim will give one of the dozen invited tutorials at useR 2008, in Dortmund, Germany - "Using R for Customer Segmentation" a sequel to his 2006 presentation in Vienna on Customer Intelligence.</p><p class="MsoPlainText"><o:p></o:p></p><p class="MsoPlainText">Michael Driscoll</p><p class="MsoPlainText">Michael is a Principal at Dataspora, Inc. a business analytics consultancy in San Francisco.<span style="font-size:+0;"> </span>He has a decade of experience using large-scale databases and data mining algorithms within industry, government, and academic institutions.<span style="font-size:+0;"> </span>He founded and since 2000 has served on the board of CustomInk.com, an Inc. 500 e-commerce firm.</p><p class="MsoPlainText">Michael has a Ph.D. in Bioinformatics & Systems Biology from Boston University, where he used R for the analysis and visualization of genome data.</p><p class="MsoPlainText"><o:p></o:p></p><p class="MsoPlainText">6:30 PM - 9:00 PM July 15, 2008</p><p class="MsoPlainText">SAP</p><p class="MsoPlainText">Building D, Southern Cross Room</p><p class="MsoPlainText">3410 Hillview Avenue</p><p class="MsoPlainText">Palo Alto,, CA</p><p class="MsoPlainText">94304</p><p class="MsoPlainText"><o:p></o:p></p><p class="MsoPlainText">FULL INFO AT</p><span style="font-family:'Calibri','sans-serif';font-size:11;"><a href="http://www.sdforum.org/index.cfm?fuseaction=Calendar.eventDetail&eventID=13118">http://www.sdforum.org/index.cfm?fuseaction=Calendar.eventDetail&eventID=13118</a></span>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-63211307846061152962008-06-20T09:46:00.000-07:002008-06-20T10:46:06.403-07:00SaaS - Multitenancy DebatesThere has been a really interesting discussion started by Phil Wainwright on Why <span class="blsp-spelling-error" id="SPELLING_ERROR_0">Multitenancy</span> Matters for <span class="blsp-spelling-error" id="SPELLING_ERROR_1">SaaS</span> companies...the <a href="http://blogs.zdnet.com/SAAS/?p=537">latest post </a>with a response from the <span class="blsp-spelling-error" id="SPELLING_ERROR_2">Intacct</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_3">CTO</span>, Aaron Harris, is very enlightening. Harris points out that many of these decisions on infrastructure are made both on the technical merits but also with a strong emphasis on the impact to the economics of the <span class="blsp-spelling-error" id="SPELLING_ERROR_4">SaaS</span> model. It is worth a read.<br /><br />Phil in his <a href="http://blogs.zdnet.com/SAAS/?p=533">earlier post</a> walks through the various back-end definitions of what a <span class="blsp-spelling-error" id="SPELLING_ERROR_5">SaaS</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_6">multitenant</span> solution could look like. If you look at the 15 <span class="blsp-spelling-error" id="SPELLING_ERROR_7">SaaS</span> portfolio companies of Hummer <span class="blsp-spelling-error" id="SPELLING_ERROR_8">Winblad</span> you can see that we have a pretty strong religion on the approach that is best...this includes <a href="http://www.intacct.com/"><span class="blsp-spelling-error" id="SPELLING_ERROR_9">Intacct</span></a>, <a href="http://www.omniture.com/"><span class="blsp-spelling-error" id="SPELLING_ERROR_10">Omniture</span></a> and <a href="http://www.ariasystems.com/">Aria Systems</a>. The approach outlined by Harris - few instances of the back end and every customer on the same instance of the code - is the one where we see the best patterns for success.<br /><br />There was also a post by the constant instigator, our own Dave Rosenberg, CEO of <span class="blsp-spelling-error" id="SPELLING_ERROR_11">Mulesource</span> (one of our portfolio companies and a regular <span class="blsp-spelling-error" id="SPELLING_ERROR_12">ZDNet</span> blogger). He argues that <a href="http://news.cnet.com/8301-13846_3-9969592-62.html">customers <span class="blsp-spelling-error" id="SPELLING_ERROR_13">dont</span> care</a>. At the risk of setting off a fiery debate with Dave I will respectfully add some thoughts...that customers care because of the derivative effects of good <span class="blsp-spelling-error" id="SPELLING_ERROR_14">backend</span> choices.<br /><br />Why customers DO care...<br /><br /><strong>Market Leadership</strong><br /><br />Market leadership in a category can be a derivative of the efficiency of the <span class="blsp-spelling-error" id="SPELLING_ERROR_15">SaaS</span> providers organization. If you read the response provided by Harris on their <span class="blsp-spelling-error" id="SPELLING_ERROR_16">multitenancy</span> choices it boils down to economics. With a lean and mean back end infrastructure the <span class="blsp-spelling-error" id="SPELLING_ERROR_17">SaaS</span> provider has less administrators, less mixed hardware, less outages, etc and an overall lower cost to provide the service - do the customers care?<br /><br />I would argue they do - most companies want to partner with the best companies in their category. The derivative reasons are a safer vendor choice, less risk of having to change later, often better pricing and usually a stronger product development capability.<br /><br /><strong>Support</strong><br /><strong></strong><br />There is often a temptation for <span class="blsp-spelling-error" id="SPELLING_ERROR_18">SaaS</span> companies to bend to large customers who want separate notification and processes for upgrading code. If you play out this scenario for the <span class="blsp-spelling-error" id="SPELLING_ERROR_19">SaaS</span> provider you end up in a situation quickly where a few customers don't want the upgrade, or delay it by six months, or advocate for a different feature mix...and the small decision to allow different upgrade paths blossoms into a large subset of code versions across customers a few years out. I believe the saying is that if you let the nose of the camel in the tent and it wont be long before he is sitting beside you.<br /><br />If you play out the scenario, every support call starts with the old software model question "what version are you running" and "was it Bob who knew how to deal with this"? This slows down support, diverts development resources to support and slows down the innovation at the company. Not good.<br /><br /><br />I don't expect all customers will start asking all these questions about how a <span class="blsp-spelling-error" id="SPELLING_ERROR_20">SaaS</span> company manages their back end <span class="blsp-spelling-corrected" id="SPELLING_ERROR_21">infrastructure</span> during the sales process...but I do expect them to make choices based on market leadership, support time, pricing, product development, etc.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-80293850325870159062008-06-13T13:46:00.000-07:002008-06-13T14:00:19.949-07:00SaaS Platform WarsChris Keene (CEO of our portfolio company <a href="http://www.wavemaker.com/">WaveMaker</a>) pointed me to a recent McKinsey report on the SaaS Platform Wars.<br /><br />The reference, and link to the <a href="http://www.mckinsey.com/clientservice/hightech/pdfs/Emerging_Platform_Wars.pdf">McKinsey report</a> are on Chris' blog entry called <a href="http://www.keeneview.com/">SaaS Platforms For ISVs - Who Wins?</a> from May 21st.<br /><br />It was very thought provoking and gave our firm a basis for examining our work in SaaS. We have been very active SaaS investors with about 15 companies including Omniture, Employease and <a href="http://www.ariasystems.com/">Aria Systems</a>. The latter is a great example of the common services layer being delivered as a SaaS infrastructure layer as described as one of the core areas of the stack.<br /><br />I think the internationalization piece related to SaaS is another core asset that platforms can provide worth noting. For instance Aria provides other SaaS companies with the ability to do business in many countries and currencies with one integration - to date they have done a billion transactions in over 150 countries. Without good SaaS platform components each vendor would have this complicated mess to untangle for each area that they want to do business - and it slows down the adoption.<br /><br />The battlefront that I see as the one developing the most quickly in SaaS platforms is the one around cloud computing. We are seeing different approaches and different levels of the stack exposed by all the vendors…Amazon is a utility model (but proprietary queuing and other bits), Google forces Python and the persistent storage, Opsource wants to build lock-in through application peering, etc. We still don’t know where Microsoft, IBM and others will enter…it will be a dynamic market for a bit yet. We are investors in <a href="http://www.elastra.com/">Elastra</a> that provides a third party layer for working with cloud computing environments.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com2tag:blogger.com,1999:blog-4796026200062518681.post-14286051196210193972008-04-23T16:20:00.000-07:002008-04-25T17:53:29.052-07:00BusinessWeek on SaaSSomeone forwarded the recent BusinessWeek article on SaaS Myths found <a href="http://www.businessweek.com/technology/content/apr2006/tc20060417_996365.htm?site=cbs">here</a>. I wanted to include it below as a time capule of the market adoption of SaaS - something for us to look back on in a few years and laugh at the market FUD that is being generated to combat the SaaS wave that is pushing through the market.<br /><br />UPDATE - This BusinessWeek article was written by <a href="http://www.thinkstrategies.com/">Jeff Kaplan </a>(Managing Director of THINKSTRATEGIES, and one of the best sources of all things SaaS that I know.) back in April of 2006. I applaud him for catching these trands two years ago.<br /><br /><br />A few other notes on the space that support the viewpoint for SaaS growth:<br /><br />1) OnDemand market is currently 6B and growing at a 32% CAGR. The combined market cap of the ondemand vendors that are public is over 17B.<br /><br />2) It is a fragmented market...the top 10 vendors still are less than 50% of the market. And these are big players like Cisco/WebEx, Microsoft, Salesforce, Citrix and Omniture.<br /><br />3) This is a broad trend:<br />HR - Authoria, Taleo, SuccessFactors, Salary.com, HireRight<br />Finance/Accounting - Netsuite, DealerTrack, Concur, Intacct<br />Marketing - DemandTec, Vocus, RightNow, Omniture, ConstantContact<br />CRM - SalesForce, Aria, Genius, Entellium,<br />Content/Collaboration - Arena, WebEx, Citrix<br />Supply Chain - Ariba, TradeBeam, ClickCommerce<br />Just to name a few categories that are working...<br /><br /><br />Software-as-a-Service Myths [text from BusinessWeek article]<br /><br />A consultant explains why this new breed of Web-based software has staying powerFor years, organizations of all sizes have suffered the hassles and unexpected costs that accompany deploying and maintaining a variety of traditional software applications that, ironically, were intended to make them more productive. Now a new breed of Web-based services are pushing legacy applications aside and finally giving users the business benefits they've been seeking. This new form of software-as-a-service, or SaaS, has been spearheaded by Salesforce.com's (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=CRM" rel="ticker">CRM</a>) customer relationship management and salesforce automation applications, and NetSuite's "net-native" enterprise resource planning applications. These companies have recognized the inherent inefficiencies of the traditional software market, including the tremendous time, effort, and cost that organizations -- especially large-scale midsize businesses -- have to expend to install applications and keep them up and running. Despite the success of these companies, many people are still skeptical about the long-term success of SaaS. Others are concerned that recent Salesforce.com outages represent a fundamental fault line in the SaaS landscape. As someone who has consulted with a variety of SaaS users and vendors and manages a rapidly growing directory of SaaS players, which can be seen at saas-showplace.com, here's my response to some of the most common myths associated with SaaS.<br /><br />Myth #1: SaaS is still relatively new and untested.Salesforce.com has been in business over five years, has more than 399,000 subscribers at 20,500 companies worldwide, and is growing at about 80% a year. NetSuite has been in business eight years, and company officials say it has thousands of customers globally using its online applications. The oldest and biggest SaaS purveyor? ADP (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=ADP" rel="ticker">ADP</a>) -- the world's largest payroll application outfit -- has been in business for nearly 60 years, generated $8.5 billion in revenues last year, and served about 590,000 clients worldwide.<br /><br />Myth #2: SaaS is just another version of the failed application service provider, or ASP, and hosting models of the past, and will suffer the same fate as its predecessors.While SaaS isn't a new idea, the economic climate and rapid advancements in application development tools have combined to make today's SaaS providers more successful than their predecessors. The ASPs and hosting companies of the dot-com era failed for two reasons. First, they did not fundamentally change the architecture of their software applications, but simply resold legacy applications to organizations that didn't want to house them on their own systems. The up-front and ongoing costs of hosting legacy applications proved to be too much for the ASPs to withstand. The second reason the ASPs and hosting companies failed: Only a small segment of the market was willing to outsource their application needs to relatively untested outfits because most companies during the dot-com era felt that their IT operations and business applications were a strategic asset. Times have changed. Today's economic and competitive pressures make nearly any form of outsourcing fair game. Many companies now consider various IT functions and business applications commodities and not core competencies. This has made SaaS, essentially an outsourced application management business, more attractive today than ASPs and hosting services of the past.<br /><br />Myth #3: SaaS only relieves companies of the up-front costs of traditional software licenses.SaaS not only alleviates the costs of traditional perpetual licensing fees but also eliminates the need for additional IT infrastructure investments to support new applications. A variety of enabling technologies, such as service-oriented architecture and Web services, permit SaaS to be more easily provisioned and metered based on actual usage levels. This means companies no longer have to pay for excess capacity. The bottom line? Lower total cost of ownership and quicker time-to-value.<br /><br />Myth #4: SaaS is only for small- and midsize businesses and will not be accepted by large-scale organizations.Companies of all sizes are taking advantage of SaaS. The scalability of the new generation of SaaS solutions enables users to test the reliability and performance of on-demand applications in limited deployments, and expand their adoption incrementally. Many SaaS vendors have emulated Salesforce.com's market penetration strategy of appealing to individual users with free trials or low-cost single-user subscription fees with the intent of permeating the market, and then winning business unit and enterprise-level adoption in major corporations. Today, Salesforce.com counts a growing number of Global 2000 and other brand-name companies as its customers, including AOL (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=TWX" rel="ticker">TWX</a>), Avery Dennison (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=AVY" rel="ticker">AVY</a>), Nokia (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=NOK" rel="ticker">NOK</a>), Perkin-Elmer (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=PK" rel="ticker">PK</a>I) and SunTrust (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=STI" rel="ticker">STI</a>). Myth #5: SaaS only applies to applications such as customer relationship management and salesforce automation.While SaaS certainly makes sense for many front-office functions and team-oriented collaboration purposes, SaaS solutions are emerging to address nearly every business application need. These range from accounting and financial applications to supply chain and channel management solutions. For example, Aramark (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=RMK" rel="ticker">RMK</a>), Dow Chemical (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=DOW" rel="ticker">DOW</a>) , HP (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=HPQ" rel="ticker">HPQ</a>), Honeywell (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=HON" rel="ticker">HON</a>), Hyatt Hotels, Roche, and Wachovia (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=WB" rel="ticker">WB</a>) rely on Taleo's (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=TLEO" rel="ticker">TLEO</a>) SaaS talent management solution. On-demand supply chain management vendor Click Commerce (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=CKCM" rel="ticker">CKCM</a>) boasts Arrow Electronics (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=ARW" rel="ticker">ARW</a>), Delta, Tyco (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=TYC" rel="ticker">TYC</a>) and Volvo (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=VOLVY" rel="ticker">VOLVY</a>) as customers. Myth #6: SaaS will only have a minor impact on the software industry and will fade over time.A third of the respondents to THINKstrategies' recent survey said they are already using SaaS, and another third said they are planning to adopt SaaS in 2006. Other research firms have generated even higher ratios. As SaaS gains mainstream acceptance, it is becoming an important disruptive force in the software industry. And as long as the quality and reliability of SaaS solutions continues to improve, the appeal of SaaS isn't going to go away. In response to these numbers and other industry trends, Microsoft Chairman Bill Gates stated in an internal memo that became public last fall: "This coming 'services wave' will be very disruptive....Services designed to scale to tens or hundreds of millions will dramatically change the nature and cost of solutions deliverable to enterprises or small businesses."<br /><br />Myth #7: It will be easy for the established software vendors to offer SaaS and dominate this market.Nearly every established software vendor is being forced to determine how to revamp their legacy application business models to join the SaaS movement. This isn't a small challenge. Legacy software companies have to re-architect their applications to make them work on the Web. They also have to redesign their sales and financial models to accommodate the pay-as-you-go SaaS fee structures. And they have to rebuild their corporate cultures to make them more service-oriented rather than product-centric. It could be argued that Siebel was acquired by Oracle (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=ORCL" rel="ticker">ORCL</a>) last year because it wasn't up to the task of fighting off Salesforce.com. Now Oracle, Microsoft (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=MSFT" rel="ticker">MSFT</a>), and SAP (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=SAP" rel="ticker">SAP</a>) must respond to the SaaS movement while trying to avoid cannibalizing their existing software business in the process.<br /><br />Myth #8: SaaS is only for corporate users.Anyone who uses McAfee (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=MFE" rel="ticker">MFE</a>) or Symantec (<a href="http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=SYMC" rel="ticker">SYMC</a>) antivirus software to protect their home PCs likely uses their subscription and 'live update' features, which represent another example of SaaS. Microsoft's new "Live" version of its popular Office productivity applications is aimed at small and midsize businesses and the home user. And don't look now, but online gaming and video-on-demand also can be considered forms of SaaS.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-76212335511411455792008-04-16T10:44:00.000-07:002008-04-16T11:04:42.588-07:00FountainBlue Event - Enterprise 2.0<p><span style=";font-family:";font-size:10;" >Earlier this week I was invited by the FountainBlue Forum to take part in a panel discussion about Enterprise 2.0 (how web 2.0 is influencing/penetrating the enterprise market). I have attached the summary of the event written by the organizer, Linda Holroyd.<br /></span></p><p><span style=";font-family:";font-size:10;" >I wanted to comment on one topic that came up during the discussion relating to the classification of Enterprise 2.0. I view the definition of Enterprise2.0 (if this really is a category) as much more than online collaboration tools for inside the enterprise. The definition needs to be broad enough to encompass some of the really interesting trends that are happening:</span></p><p><span style=";font-family:";font-size:10;" ><span style="font-weight: bold;">SaaS</span> - People who work at companies are consumers when they leave the office. These people want the same quality and user interface at work and at home. No one wanted to use green screens at the office and client-server at home. Today, no one wants great web2.0 style interfaces at home and clunky desktop solutions at the office.</span></p><p><span style=";font-family:";font-size:10;" ><span style="font-weight: bold;">Next Generation Marketing</span> - Lyle Fong of Lithium who joined us on the panel has an interesting company that helps large brand companies identify the key users/influencers/evangelists of their products and engages them. This is a new world of marketing and engagement with your customers - and I think one of the best examples I can think of for a definition of Enterprise2.0. Afterwards Lyle pointed me to the new Forrester book, <a href="http://www.forrester.com/Groundswell">Groundswell</a>, for more background.</span></p><p><span style=";font-family:";font-size:10;" ><span style="font-weight: bold;">Social Science</span> - We have a company, <a href="http://www.baynote.com/">Baynote</a>, which leverages the science behind the wisdom of the crowds to bring deep product search and recommendation engines to ecommerce sites. I think this is another great example of Enterprise 2.0 - an underlying technology engine that enterprises are using to keep up with the expectations of their customers.</span></p><p><span style=";font-family:";font-size:10;" >Now to the official summary of the event. Email me if you have further thoughts or questions.<br /></span></p><p><span style=";font-family:";font-size:10;" >Thank you for attending FountainBlue's High Tech Entrepreneurs' Forum on the topic</span><b> </b><b><span style=";font-family:";font-size:10;" >Web 2.0 - from Consumer to Enterprise Opportunities and Business Models</span></b><span style=";font-family:";font-size:10;" >. Please join me in thanking our sponsors at Pillsbury Winthrop Pittman & Shaw LLC for their sponsorship and support.</span></p> <p><span style=";font-family:";font-size:10;" >Please join me also in thanking our knowledgeable, informative, and entertaining panelists for sharing their knowledge and advice on the topic:</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Facilitator Gary Benton, Partner, Pillsbury Winthrop Shaw Pittman LLP</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Dr. Cheemin Bo-Linn, CEO & President, Peritus Partners</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Lyle Fong, CEO and Co-Founder, Lithium </span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Anand Iyer, Developer</span> <span style=";font-family:";font-size:10;" >Evangelist, Microsoft Corporation</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Lars Leckie, Partner, Hummer Winblad Venture Partners</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Eugene Lee, CEO , Socialtext</span></p> <p><span style=";font-family:";font-size:10;" >Web 2.0 solutions have centered around personal communities and consumer solutions. But as the solutions have evolved and the technologies have advanced, business professionals are adapting solutions previously targeting consumer audiences, to investigate enterprise opportunities and business models. Below is a summary of notes from our conversation:</span></p> <p><span style=";font-family:";font-size:10;" >The</span><b> </b><b><span style=";font-family:";font-size:10;" >Evolution of the Web</span></b><span style=";font-family:";font-size:10;" >:</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Enterprise Web 2.0 is not just for the consumer, it’s</span><b> </b><b><span style=";font-family:";font-size:10;" >for corporations</span></b><span style=";font-family:";font-size:10;" > and businesses.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span><b> </b><b><span style=";font-family:";font-size:10;" >Business Models</span></b><span style=";font-family:";font-size:10;" > for Enterprise Web 2.0 are</span><b> </b><b><span style=";font-family:";font-size:10;" >evolving</span></b><span style=";font-family:";font-size:10;" >, but may include page-view payments funded by corporations rather than by advertising.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >There is a</span><b> </b><b><span style=";font-family:";font-size:10;" >groundswell of people using Web 2.0</span></b><span style=";font-family:";font-size:10;" > consumer solutions demanding the same functionality in corporate contexts, which, among other factors, is leading to a convergence of consumer and enterprise solutions. Forward-thinking companies are thinking creatively about how to leverage this opportunity.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >The demand for Enterprise Web 2.0 solutions is triggered in general by the</span><b> </b><b><span style=";font-family:";font-size:10;" >younger generation</span></b><span style=";font-family:";font-size:10;" > and those also adverse to traditional enterprise software.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Web 1.0 is about presented structured information in a structured format. Web 2.0 is more about taking</span><b> </b><b><span style=";font-family:";font-size:10;" >unstructured information</span></b><span style=";font-family:";font-size:10;" > and putting it into a</span><b> </b><b><span style=";font-family:";font-size:10;" >structured format</span></b><span style=";font-family:";font-size:10;" >. Perhaps Web 3.0 is more about taking unstructured information and leaving it in an unstructured format.</span></p> <p><span style=";font-family:";font-size:10;" >Characteristics of</span><b> </b><b><span style=";font-family:";font-size:10;" >Successful</span> </b><b><span style=";font-family:";font-size:10;" >Enterprise</span> </b><b><span style=";font-family:";font-size:10;" >Web 2.0 Solutions</span></b><span style=";font-family:";font-size:10;" >:</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >They</span><b> </b><b><span style=";font-family:";font-size:10;" >solve business needs</span></b><span style=";font-family:";font-size:10;" >:</span></p> <p><span style=";font-family:";font-size:10;" >o </span> <span style=";font-family:";font-size:10;" >They may</span><b> </b><b><span style=";font-family:";font-size:10;" >turn customers into assets</span></b><span style=";font-family:";font-size:10;" > and advocates and channels working in community.</span></p> <p><span style=";font-family:";font-size:10;" >o </span> <span style=";font-family:";font-size:10;" >They</span> <span style=";font-family:";font-size:10;" >create a community which</span><b> </b><b><span style=";font-family:";font-size:10;" >connects customers and supporters</span></b><span style=";font-family:";font-size:10;" > and others with each other.</span></p> <p><span style=";font-family:";font-size:10;" >o </span> <span style=";font-family:";font-size:10;" >They make it</span><b> </b><b><span style=";font-family:";font-size:10;" >easier to support customers</span></b><span style=";font-family:";font-size:10;" >, partners and other stakeholders.</span></p> <p><span style=";font-family:";font-size:10;" >o </span> <span style=";font-family:";font-size:10;" >They</span><b> </b><b><span style=";font-family:";font-size:10;" >increase productivity and/or build connections</span></b><span style=";font-family:";font-size:10;" > within an organization.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >They have</span><b> </b><b><span style=";font-family:";font-size:10;" >sophisticated technologies</span></b><span style=";font-family:";font-size:10;" > which make the solution broadly</span><b> </b><b><span style=";font-family:";font-size:10;" >accessible</span></b><span style=";font-family:";font-size:10;" >, with</span><b> </b><b><span style=";font-family:";font-size:10;" >inter-connected</span></b><span style=";font-family:";font-size:10;" > elements and</span><b> </b><b><span style=";font-family:";font-size:10;" >back-end components</span></b><span style=";font-family:";font-size:10;" >.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >They</span><b> </b><b><span style=";font-family:";font-size:10;" >address an identified pain</span></b><span style=";font-family:";font-size:10;" > in specific, measurable ways</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >There is a</span><b> </b><b><span style=";font-family:";font-size:10;" >fun, social, yet result-focused objective</span></b><span style=";font-family:";font-size:10;" > for having people join and participate in a community. It’s not just about having fun (like in Second Life), it’s also about serving a purpose which can be measured in ROI reports (like collaboratively solving technical problems with a project for example, or gathering innovative ideas in community).</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >They create</span><b> </b><b><span style=";font-family:";font-size:10;" >high-trust communities</span></b><span style=";font-family:";font-size:10;" > with similar interests:</span></p> <p><span style=";font-family:";font-size:10;" >o </span> <span style=";font-family:";font-size:10;" >They encourage</span><b> </b><b><span style=";font-family:";font-size:10;" >communication and collaboration</span></b><span style=";font-family:";font-size:10;" > between members both to build connections and to solve business problems.</span></p> <p><span style=";font-family:";font-size:10;" >o </span><b> </b><b><span style=";font-family:";font-size:10;" >Members make suggestions which others act on</span></b><span style=";font-family:";font-size:10;" >.</span></p> <p><span style=";font-family:";font-size:10;" >o </span><b> </b><b><span style=";font-family:";font-size:10;" >Users remain engaged</span></b><span style=";font-family:";font-size:10;" > in the community</span></p> <p><span style=";font-family:";font-size:10;" >o </span><b> </b><b><span style=";font-family:";font-size:10;" >Users</span> </b><b><span style=";font-family:";font-size:10;" >continue to drive value</span></b><span style=";font-family:";font-size:10;" > for the company (see above).</span></p> <p><span style=";font-family:";font-size:10;" >o </span> <span style=";font-family:";font-size:10;" >There is a</span><b> </b><b><span style=";font-family:";font-size:10;" >viral element</span></b><span style=";font-family:";font-size:10;" > which supports on ongoing growth of the community.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >They may make it easier for companies to</span><b> </b><b><span style=";font-family:";font-size:10;" >connect traditionally silo-ed groups</span></b><span style=";font-family:";font-size:10;" > through sharing of information, resources, connections, etc.,</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span><b> </b><b><span style=";font-family:";font-size:10;" >Collaboratively-created content</span></b><span style=";font-family:";font-size:10;" > creates value and helps build the community, thereby adding value to the corporation.</span></p> <p><span style=";font-family:";font-size:10;" >Advice on</span><b> </b><b><span style=";font-family:";font-size:10;" >Selling Web 2.0 Solutions</span></b><span style=";font-family:";font-size:10;" > to the Enterprise: </span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >The</span><b> </b><b><span style=";font-family:";font-size:10;" >culture</span></b> <span style=";font-family:";font-size:10;" >of an organization is a key factor on which Enterprise Web 2.0 solutions will take hold and how it will be used internally for the company, and externally for creating and supporting communities partnering with the organization. Factor this in when planning your sales strategy and approach.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >It is essential to work with</span><b> </b><b><span style=";font-family:";font-size:10;" >IT departments</span></b><span style=";font-family:";font-size:10;" > who may feel threatened by Enterprise Web 2.0 solutions. The decision-maker/advocate is likely not in that department.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >It is easier than ever to set up an infrastructure and create a web 2.0 solution, but because of that, there are a lot of web 2.0 solutions, and you must be able to</span><b> </b><b><span style=";font-family:";font-size:10;" >define your niche</span></b><span style=";font-family:";font-size:10;" > and your potential enterprise customers and the pain which they need to have addressed.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Have ROI reports and case studies to present to your prospects.</span></p> <p><b><span style=";font-family:";font-size:10;" >Advice to Web 2.0 Founders</span></b><span style=";font-family:";font-size:10;" >:</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span><b> </b><b><span style=";font-family:";font-size:10;" >Know the problem</span></b><span style=";font-family:";font-size:10;" > you want to solve and why you are passionate about solving it. Keep focused on that.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span><b> </b><b><span style=";font-family:";font-size:10;" >Know which customers and partners</span></b><span style=";font-family:";font-size:10;" > will help you focus on that objective and work with them, rather than continually chasing the low-hanging fruit.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Remember that</span><b> </b><b><span style=";font-family:";font-size:10;" >it’s not about the technology, it’s about the whole solution</span></b><span style=";font-family:";font-size:10;" > and the problem you’re solving.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Consider the</span><b> </b><b><span style=";font-family:";font-size:10;" >market size</span></b><span style=";font-family:";font-size:10;" >.</span></p> <p><span style=";font-family:Symbol;font-size:10;" >·</span><span style=";font-family:";font-size:10;" > </span> <span style=";font-family:";font-size:10;" >Build an</span><b> </b><b><span style=";font-family:";font-size:10;" >experienced team</span></b><span style=";font-family:";font-size:10;" > that can deliver.</span></p>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-43824360684976990932008-04-04T12:10:00.000-07:002008-04-04T12:17:22.804-07:00SaaS Economics Panel – SaaS Light and SaaS HeavyYesterday I moderated at panel at the <a href="http://www.softwarebusinessonline.com/saas_conf2008_index.php">SaaS Economics Conference</a> in San Mateo. The organizer, John Cargile, had asked me to pull together a panel on the topic of Raising and Spending Capital in SaaS companies. Our goal was to talk about fundraising, budgeting/allocating, dealing with bumps in the market and overall capital strategy. I will try to summarize some interesting points below.<br /><br />First, I want to thank the panel members who took time away from running their SaaS companies to share their experiences:<br /><br />Lyle Fong – CoFounder and CEO of <a href="http://www.lithium.com/">Lithium Technologies</a>. Lithium is a very successful and profitable SaaS company that builds online communities and a social customer engagement platform for some of the biggest brands (Dell, Nokia, Blackberry, etc)<br /><br />Ed Sullivan – Founder and CEO of <a href="http://www.ariasystems.com/">Aria Systems</a>. Aria is the market leader in Subscription Revenue billing and the associated infrastructure. Phil Wainwright just covered them with an excellent post on ZDNet.<br /><br />Brad Peters – Founder and CEO of <a href="http://www.successmetricsinc.com/">SuccessMetrics</a>. Brad’s company has some great traction, in his words, “six and seven figure deals” selling a SaaS platform for deep analytics around revenue uplift.<br /><br />A few takeaways from the discussion:<br /><br /><strong>SaaS Light and SaaS Heavy</strong><br /><br />One interesting point that came up in the discussion was that the SaaS market is not homogeneous in nature. An interesting segmentation that I want to put forward is SaaS heavy vs SaaS light.<br /><br />SaaS light, which I think much of the dialog on SaaS refer to, is one which has a large number of end customers and has some crossover into consumer type companies. Examples of this would be WebEx and SalesForce. These companies tend to be price per seat level.<br /><br />On the other end of the spectrum lies SaaS heavy applications such as Omniture, Aria, Lithium and SuccessMetrics. These companies tend to have fewer (but larger)customers, more integration requirements, sell into core enterprise functions and a more enterprise-like sales model (direct and channel). The pricing here tends to be more on a usage or value metric. One can almost extend this segmentation to B2C vs B2B companies where B2B is SaaS heavy and B2C is SaaS light. In this case the C would be individuals and groups who may be businesses but don’t buy/engage that way.<br /><br />The economics and capital allocation for these two categories is different. Our panel leaned more to the SaaS Heavy side but we were able to talk to both sides.<br /><br />SaaS Light SaaS Heavy<br />#1 Marketing Infrastructure<br />#2 Marketing Sales<br /><br /><strong>Bumps in the Road</strong><br /><br />During the discussion we talked about how the current economic conditions could impact the spending plans for SaaS companies. While there is a general feeling the SaaS companies perform well during tighter budget cycles and that the recurring revenue model helps ease this problem from an operating side – it is the roll of startup founders to be optimists – the key point was that these companies should be gauging their success more by market share. If the overall market/economy is struggling but the companies continue to be able to increase their relative market penetration they will continue to invest for growth. It is too much of a short term perspective to only look at the company revenue growth.<br /><br /><strong>Areas of Investments</strong><br /><strong></strong><br />Two of the companies on the panel listed their primary reason for seeking external financing was to keep pace with the market. Both had built their business in a bootstrapped manner but saw signals that the market timing for the company had arrived – and they wanted capital to enable them to capture as much of the market as they could. Venture financing also gave the SaaS heavy companies more credibility with their enterprise customers who have a robust enterprise purchasing process that includes due diligence of the vendor balance sheet.<br /><br />The areas of investment for the companies on the panel post funding varies a little bit with infrastructure/product at the top followed by sales investment. Marketing was next on the list, but given the SaaS heavy nature it was lower than investing in the sales team.<br />From the venture perspective, our goal is to invest in the areas that make and keep the company number one in their category. Brad pointed out that in traditional software markets, and he hypothesized for SaaS too, that the market leadership position will yield the best companies. Number one in the market tended to end up with 60% of the market, number two ended up with 20% and the last 20% was a clutter of the companies that didn’t quite make it. If market share is a good proxy for enterprise value then it makes sense to set market leadership as the guiding principal for setting company budget allocations.<br /><br />Thanks again for all those who attended the panel. Let me know if I missed any part of the discussion that you thought was important.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-60374614863184505002008-03-23T20:41:00.000-07:002008-03-25T11:37:37.811-07:00DaaS - Data as a Service<div>I have been preoccupied lately with a software model that is a cousin of Software as a Service (SaaS) - one that I will call Data as a Service (DaaS). Much like SaaS it is more of an evolution of an existing model than something completely different - it just seems to me that the new generation of data delivered as a hosted service are breaking new ground in terms of access to data and analytics. I think more interesting companies will be built around this model.<br /><br />Definition - DaaS<br />A software as a service or web service offering that provides customers with access and analytics around a set of proprietary set of aggregated data. The most interesting of DaaS offerings are ones which collect this data from individuals or companies by providing immediate value back for these efforts, but that the aggregated data is able to be resold to a different set of constituents.<br /><br />Example - <a href="http://www.salary.com/">Salary.com</a><br />Salary.com collects data by offering individuals the ability to benchmark their compensation levels against others by sharing data into the system. This data is then aggregated and anonomized to be resold to companies (usually HR managers) for hiring and compensation related usage. Salary.com went <a href="http://finance.google.com/finance?q=NASDAQ%3ASLRY">public</a> in 2006 and has a market cap of 100M.<br /><br />Example - <a href="http://www.dnb.com/">Dun and Bradstreet</a><br />Dunn and Bradstreet (D&B) is a 165 year old business that provides credit and commercial information. I have used their service in the past to research the credit history of customers and partners before extending them credit. D&B has a team of people who call companies to gather the data and then they resell it back to other companies - both on individual companies and for industry segments. D&B also sells this data for several other uses, for example, to marketing professionals to cleanse contact lists.</div><br /><div><br />Why the DaaS model works<br /><br />- Virtuous cycle on data - as the DaaS company acrues more data, it can provide increasing more useful data back to both the contributors and the purchasers. The data becomes a competitive advantage that an upstart would have trouble replicating. This is especially true if the data needs scale across different geographies.<br /><br />- Analytics and actionable business drivers - the data is the basic asset, but it is significantly enhanced by wrapping analytics into the offering. Some DaaS companies pull their data from publically available sources but an idividual user would have trouble pulling the data, navigating the data and building analytics to make it useful. A DaaS company can make this investment as they can sell the data many times over.<br /><br />Unfortunately I think that the acronym is still up for grabs with a few alternative software meanings:<br /><br /><a href="http://www.techcrunch.com/2008/01/16/saleforcecom-to-offer-daas-service-new-pricing-model-competition/">Development as a Service</a> - Salesforce<br /><a href="http://www.blogger.com/www.daas.com">Datacenter as a Service</a> - Cloud Computing<br /><a href="http://www.longjump.com/daas/">Database as a Service</a> - LongJump<br /><a href="http://www.blogger.com/hss.sbcounty.gov/daas/">Department of Aging and Adult Services</a> - US Government<br /><a href="http://www.strikeiron.com/company/default.aspx">Data as a Service</a> - StrikeIron (this one is closest to my definition, but is actually DSaaS - Data Service as a Service)<br /><br />The message for me is that all companies, SaaS or otherwise, should look at what data assets they have (or could easily have) and consider a DaaS offering. If it can provide useful insights - it will be well worth the development costs.<br /><br /></div>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com1tag:blogger.com,1999:blog-4796026200062518681.post-86965288553304429232008-03-17T17:14:00.000-07:002008-12-11T07:39:32.852-08:00Magic Number for SaaS CompaniesGuest post on Will Price's blog - reposted here.<br /><br />Josh James, CEO of <a href="http://www.omniture.com/">Omniture</a> (a <a href="http://www.humwin.com/">Hummer Winblad</a> portfolio company), gave an inspiring talk on building a SaaS company last week at the <a href="http://www.opsource.com/">Opsource</a> summit. Josh walked through the history of Omniture as a case study for building a SaaS company. He talked about the need to invest in the company with a firm hand on the wheel as the recurring revenue slowly built up over time. He outlined the different stages of evolution of the company:<br /><br />1) Product: build a rock solid product. Prove you can sell it as founders before moving past this step.<br />2) Sell: Sell like crazy, build out a team, hire some QBSRs (Quota Bearing Sales Reps)<br />3) Retention: focus on churn and retention issues, hire more QBSRs<br />4) Marketing: spend on marketing, hire more QBSRs<br /><br />The next phases, not surprisingly, also included hiring more QBSRs but interestingly it is not until later that investments in efficient infrastructure and operations hit their ToDo lists. This outline displays a strong focus on finding a product market fit and then adding gas to the fire as the market opened up. The key metric that Omniture used to decide how much gas to pour on the fire was the Magic Number.<br /><br />The Magic Number<br /><br />The magic number ("MN") is a metric that can be used to tell you the health of your company from the perspective of growing monthly recurring revenue ("MRR"). It is a common mode metric to compare companies MRR scaled by sales and marketing spend. The MN provides insight into the effectiveness of previous quarter Sales and Marketing spend on MRR growth. Your MN will be penalized if the spend is wasted (bad marketing, bad sales execution), if your churn is high or if the market has issues (saturation, competitive forces). It also has a very high correlation with Q/Q growth rates so in general, high Magic Numbers are good.<br /><br />To calculate:<br /><br />QRev[X] = Quarterly Recurring Revenue for period X<br />QRev[X-1] = Quarterly Recurring Revenue for the period preceding X<br />ExpSM[X-1] = Total Sales and Marketing Expense for the period preceding X<br /><br />Magic Number = (QRev[X] – Qrev[X-1])*4/ExpSM[X-1]<br /><br />For example, consider a hypothetical company with the following financials<br /><br /> Q1 Q2 Q3<br />Revenue (recurring total) 1M 1.2M 1.5M<br />S&M Expense 800K 900K<br /><br />Then the magic number is 1.0 for the end of Q2 and 1.33 for Q3.<br /><br />Fundamentally, the key insight is that if you are below 0.75 then step back and look at your business, if you are above 0.75 then start pouring on the gas for growth because your business is primed to leverage spend into growth. If you are anywhere above 1.5 call me immediately.<br /><br />Josh provided the following gas-pouring throttle chart for SaaS companies to evaluate how much to invest in their go-to-market spend. The data on the charts if from Omniture and other public SaaS companies.<br /><br /><a href="http://1.bp.blogspot.com/_clyuM-SLos8/R98MVO2n-vI/AAAAAAAAAEI/YfIhBUmae10/s1600-h/Magic+Number.png"><img id="BLOGGER_PHOTO_ID_5178871655403354866" style="CURSOR: hand" alt="" src="http://1.bp.blogspot.com/_clyuM-SLos8/R98MVO2n-vI/AAAAAAAAAEI/YfIhBUmae10/s320/Magic+Number.png" border="0" /></a><br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/_jssZZMvgp5M/R82fS5sS0zI/AAAAAAAAAdA/i4sTSTXpixE/s1600-h/image002.png"></a>Calculate yours…and get back to me if it is interesting! For fun and extra credit take a look at difference in Magic Number for some of the public SaaS companies like Omniture and SuccessFactors. I can be reached at <a href="mailto:lars@humwin.com">lars@humwin.com</a>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com1tag:blogger.com,1999:blog-4796026200062518681.post-7274436061157254672008-03-07T07:12:00.000-08:002008-03-07T07:14:56.040-08:00<span style="color: rgb(255, 102, 0); font-weight: bold;">Eat Your Own Dogfood - SaaS vendors</span><br /><span style="color: rgb(255, 102, 0);">aka Drink your Own Champagne</span><br /><br /><br />Repost from my guest entry on <a href="http://www.willprice.blogspot.com/">Will Price's blog.</a><br /><br />Guest post by Hummer Winblad's <a href="http://www.humwin.com/team_detail.cfm?ID=12">Lars Leckie</a>.....Lars drove our firm's investment in <a href="http://www.ariasystems.com/">Aria Systems</a> and, most recently, <a href="http://www.vkernel.com/">vKernel</a>.<br /><br />Last week Phil Wainewright wrote a great post (as he always does) called <a href="http://blogs.zdnet.com/SAAS/?p=458">SaaS vendors, eat your own dogfood, or die</a>. In the post, he describes how SaaS companies need to embrace the SaaS services available in the ecosystem.<br /><br />I support the viewpoint from the post that SaaS companies need to have religion and leverage SaaS in everyway they can – further, I believe if they don’t they leave themselves open for other SaaS companies to disrupt them. From discussions with the infrastructure management of many leading SaaS companies I often hear how they are forced to use some on-premise pieces on the back-end reluctantly. This has provided the motivation for a few of our SaaS infrastructure investments (eg. Aria – SaaS billing and customer management).<br /><br />Phil’s title had me thinking along another important vein for SaaS companies…literally to eat THEIR own dogfood and use their own product. For example, Salesforce aggressively uses Salesforce to manage prospects, Omniture eats their own analytics for online marketing, Teleo uses their own product for recruiting and SuccessFactors brags about their own talent management. Luckily we don’t all work for tobacco companies…<br /><br />My belief is that SaaS companies must use their product for a few reasons:<br /><br />1) Point of View: it puts everyone in the company in the seat of the customer. This means that the internal teams will live the same pain, the same experience and the same leverage that you are espousing as a vendor. This POV extends the advantages SaaS has of bringing the vendor closer to the customer by putting the customer in the office next door.<br /><br />2) Analytics: By using your own product you will think about the product extensions and depth of how to apply the benefits of analytics to build stronger products and best practices. SaaS companies have a huge edge with analytics so it makes sense to use them internally as well.<br /><br />3) Sales Roadblock: a fair question for a prospect to ask would be, “if your solution is so great, why aren’t you using it?" SaaS vendors can do their sales team a great favor by getting ahead of this question.<br /><br />Any interesting SaaS companies that are using their own product and want to reach out – I’d love to hear from you. Please email me at Lars@humwin.com.<p class="blogger-labels">Labels: <a rel="tag" href="http://willprice.blogspot.com/search/label/lars%20leckie">lars leckie</a>, <a rel="tag" href="http://willprice.blogspot.com/search/label/saas">saas</a></p>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-7884873427710820172008-03-06T13:25:00.000-08:002008-12-11T07:39:33.204-08:00<a href="http://2.bp.blogspot.com/_clyuM-SLos8/R9Bhzr59RpI/AAAAAAAAAD0/HBg2KnhKNBk/s1600-h/vkernel+logo.gif"><img id="BLOGGER_PHOTO_ID_5174743512435738258" style="CURSOR: hand" alt="" src="http://2.bp.blogspot.com/_clyuM-SLos8/R9Bhzr59RpI/AAAAAAAAAD0/HBg2KnhKNBk/s320/vkernel+logo.gif" border="0" /></a><br /><br /><br /><span style="color:#ff6600;"><strong>VKernel and Hummer Winblad Join forces on Virtualization Infrastructure</strong></span><br /><br />This is a repost of a blog entry I contributed as a guest writer on <a href="http://www.willprice.blogspot.com/">Will Price's blog</a>.<br /><br /><a href="http://www.humwin.com/">Hummer Winblad</a> is pleased to welcome <a href="http://www.vkernel.com/aboutus/">Alex Bakman</a> and his <a href="http://www.vkernel.com/">VKernel</a> team to the Hummer Winblad family. We are very excited for the opportunities ahead and look forward to working together. The recent press release and further details can be found <a href="http://www.vkernel.com/resources/download/VKernel_Secures_Series_A_Financing.pdf">here</a>.<br /><br />Enterprise IT environments are undergoing one of the biggest shifts in 25 years – shifts that have not been seen since the move from mainframes to client-server. Big shifts in infrastructure open up large gaps in the current management solutions. Virtualized environments provide many benefits to the enterprise from flexibility to lower TCO but along with that have introduced a few headaches too…<br /><br />- “vmotion” – servers growing legs and dynamically moving<br />- “vm sprawl” – servers multiplying at unmanageable rates<br />- Shared resources – performance, monitoring, resource accounting, etc<br />- Cost visibility – no longer tied to physical resources<br /><br />vKernel is a new platform for system management in enterprises that are embracing virtual infrastructure to power their businesses. Enterprises IT managers face increasing challenges as virtualization spreads within the datacenter. vKernel provides an essential suite of virtual appliances tailored to meet the virtualized datacenter including chargeback and capacity planning management. These appliances require zero installation, are quick to deploy and provide insights within minutes.<br /><br />More information can be found on <a href="http://www.vkernel.com/products/CapacityAnalyzer/">vKernel’s website and webinars </a>– or <a href="http://www.vkernel.com/downloads/all/">download</a> the latest virtual appliance to try it out today.<br /><br />Hummer Winblad’s enthusiasm in virtualization is captured by our investment in vKernel as well as several other companies including <a href="http://www.scalent.com/">Scalent</a> and <a href="http://www.akimbi.com/">Akimbi</a> (acquired by <a href="http://www.vmware.com/">VMWare</a>).Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-76547567593747100332008-03-06T10:30:00.000-08:002008-12-11T07:39:33.386-08:00<strong><span style="color:#ff6600;">Aria Systems Raises Series A - Leave the Billing to Us</span></strong><br /><br /><a href="http://4.bp.blogspot.com/_clyuM-SLos8/R9A7LL59RoI/AAAAAAAAADs/_OxBNcxvdLA/s1600-h/aria.png"><img id="BLOGGER_PHOTO_ID_5174701035209180802" style="CURSOR: hand" height="69" alt="" src="http://4.bp.blogspot.com/_clyuM-SLos8/R9A7LL59RoI/AAAAAAAAADs/_OxBNcxvdLA/s320/aria.png" width="114" border="0" /></a><br /><br /><br />This is a re-post from a post I did on Will Price's blog.<br /><br />Last week, <a title="http://www.humwin.com/" href="http://www.humwin.com/">Hummer Winblad Venture Partners</a> announced the Series A funding for <a title="http://www.ariasystem.com/" href="http://www.ariasystem.com/">Aria Systems</a>, the leading on-demand billing and customer management provider.<br />HWVP’s investment in Aria is the firm’s fourteenth SaaS investment (others include Omniture, Adforce, Employease – some of which date back to 1998).<br /><br />The investment in Aria is a double down on the SaaS market – Aria is not only itself a SaaS ISV, but also the company is a core component of any SaaS company trying to efficiently scale. RBC Capital Markets predicts that the SaaS market will grow at 43% CAGR to be $28bn by 2010. That’s a lot of billing.<br /><br />As the SaaS market grows, the need for ISV’s to make bespoke investments in data center operations, billing infrastructure, and other core, but non-differentiated, functions is lessening by the day. Providers like Aria allow ISV’s to focus 100% of their human and financial capital on differentiated application logic, while using best-of-breed platform vendors for infrastructure services. The company puts it best when it tells customers it will help them, "get customers, get paid, get control."<br /><br />Why invest in Aria? Simply put, traditional billing solutions, independent of expensive on-premise software, are not well suited to subscription and usage based billing models. New revenue models bring about the need for new billing architectures. Emerging SaaS companies who don’t use Aria can either choose to build a billing system themselves, thereby diverting engineering resources to a non-core engineering function, or they can use existing on-premise solutions with a myriad of spreadsheets and manual accounting. Aria is a solution that can scale and provide the best infrastructure through a strong focus on the billing market.<br />The Aria solution is a complete turnkey SaaS (single instance, multi-tenant) solution to manage recurring revenue billing. They manage the quote-to-cash system for a company including hosted customer sign-up, customer service, provisioning of service, dunning and all the other components needed for a full billing solution.<br /><br />Aria is already in the market with strong customer traction and key partnerships in place. The vertical markets that Aria addresses today are SaaS, On-line Gaming and Telco. A few of their partners in these markets are <a href="http://www.opsource.net/">Opsource</a> and <a href="http://www.gni.com/">GNi</a> but you can see the full list of over 25 partners <a href="http://www.ariasystems.com/partners/">here</a>.<br /><br />Congratulations to Ed Sullivan and the rest of the Aria team - Welcome to the Hummer Winblad family.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-64692675977622855892007-01-19T12:19:00.000-08:002008-12-11T07:39:33.941-08:00<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/_clyuM-SLos8/RbAfFerNVLI/AAAAAAAAACE/etcUpfpggZw/s1600-h/meebologo200.png"><img style="cursor: pointer;" src="http://1.bp.blogspot.com/_clyuM-SLos8/RbAfFerNVLI/AAAAAAAAACE/etcUpfpggZw/s320/meebologo200.png" alt="" id="BLOGGER_PHOTO_ID_5021547763512202418" border="0" /></a><br /><br />MEEBO<br /><br />WHO: Seth Sternberg (GSB06 Social)<br /><br />Seth started working with the cofounders of <a href="http://www.meebo.com/">meebo</a> on some different ideas, including file transfer, before hitting the jackpot with browser based IM. I am not sure I can say too much new here given that Seth has become a media darling and the meebo story is everywhere (<a href="http://blog.meebo.com/press">Newsweek, NYT, Techcrunch, GigaOM, PC Magazine, Rolling Stone, etc</a>), kind of like how meebo is everywhere. They even show you that on this world meebo map of users:<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://3.bp.blogspot.com/_clyuM-SLos8/RbAf3-rNVMI/AAAAAAAAACM/OCkVHKV2vEg/s1600-h/map-thumb+meebo.png"><img style="cursor: pointer;" src="http://3.bp.blogspot.com/_clyuM-SLos8/RbAf3-rNVMI/AAAAAAAAACM/OCkVHKV2vEg/s320/map-thumb+meebo.png" alt="" id="BLOGGER_PHOTO_ID_5021548631095596226" border="0" /></a><br /><br />The history as I know it is as follows, Seth meets co-founders, ideas swirl, meebo drops out, Seth drops out (of the GSB), Sequoia drops in 3M bucks, meebo spreads like a virus, DFJ joins the party with another 9M green friends (that is news from this week), and, meebo sells for $925M to one of the big internet players allowing Seth to spend the rest of his life flying around in small planes. Or more likely a not-so-small plane. The last part still needs to be written and DFJ will never let it go that cheap if their negotiating style from Skype is still around.<br /><br />The meeboME widget is in the <a href="http://www.widgetbox.com/">Widgetbox</a> panel on the right side of my blog. It is a pretty cool way to distribute IM and showcases what meebo's strength is - it is all in the browser, no client, no installation, just fast chat. Use it while traveling, use it if you are in the military, use it at work if you cant install a client, just use it!Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0tag:blogger.com,1999:blog-4796026200062518681.post-42913778558693170752007-01-17T22:19:00.000-08:002008-12-11T07:39:34.298-08:00<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/_clyuM-SLos8/Ra3JX-rNVJI/AAAAAAAAABs/N_5Ci7o39Us/s1600-h/trulia.gif"><img id="BLOGGER_PHOTO_ID_5020890573386372242" style="CURSOR: pointer" alt="" src="http://4.bp.blogspot.com/_clyuM-SLos8/Ra3JX-rNVJI/AAAAAAAAABs/N_5Ci7o39Us/s320/trulia.gif" border="0" /></a><br /><br />Trulia<br /><br />WHO: Pete Flint (GSB05), Sami Inkinen (GSB05)<br /><br />Pete and Sami started <a href="http://www.trulia.com/">Trulia</a> in 2005 straight out of business school at Stanford. Trulia is a residential real estate search engine that helps house shoppers (and sellers) to understand the market without the painful process of talking to a realor. Trulia was one of the first vertical search engines to hone in on a market where distributed data that could be leveraged in a consumer friendly industry funded model. They have essentially allowed the average person to access multiple listing services but making pay-for-performance revenue from the various listing agents.<br /><br />Trulia launched around the same time as <a href="http://www.zillow.com/">Zillow</a> who has elected for a much more aggressive advertising model with lots of banner ads around the content. Their key differentiator is providing a specific house value based on local comparable sales - an offering that has taken a lot of heat in the community for it's accuracy and reliability.<br /><br />Trulia is a great way to keep tabs on a market that you may be interested in later, without asking a realtor to send you the listings and starting that discussion. They provide some great neighborhood guides and heat maps that can quickly get you up to speed on any local area that you are interested in. Knowledge is power, and starting a real estate transaction is a good place to have some power. Pete and Sami have leveraged the data to provide some real research and analytics power - I would guess that they get some good value from that in the future.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/_clyuM-SLos8/Ra8NqurNVKI/AAAAAAAAAB4/iLZ2usdCRsk/s1600-h/trulia2.jpg"><img id="BLOGGER_PHOTO_ID_5021247137276318882" style="CURSOR: pointer" alt="" src="http://1.bp.blogspot.com/_clyuM-SLos8/Ra8NqurNVKI/AAAAAAAAAB4/iLZ2usdCRsk/s320/trulia2.jpg" border="0" /></a><br /><v:stroke joinstyle="miter"><v:f eqn="if lineDrawn pixelLineWidth 0"><v:f eqn="sum @0 1 0"><v:f eqn="sum 0 0 @1"><v:f eqn="prod @2 1 2"><v:f eqn="prod @3 21600 pixelWidth"><v:f eqn="prod @3 21600 pixelHeight"><v:f eqn="sum @0 0 1"><v:f eqn="prod @6 1 2"><v:f eqn="prod @7 21600 pixelWidth"><v:f eqn="sum @8 21600 0"><v:f eqn="prod @7 21600 pixelHeight"><v:f eqn="sum @10 21600 0"><v:path connecttype="rect" gradientshapeok="t" extrusionok="f"><o:lock aspectratio="t" ext="edit"><v:imagedata title="" src="file:///C:\DOCUME~1\Lars\LOCALS~1\Temp\msohtml1\01\clip_image001.png"><v:stroke joinstyle="miter"><v:f eqn="if lineDrawn pixelLineWidth 0"><v:f eqn="sum @0 1 0"><v:f eqn="sum 0 0 @1"><v:f eqn="prod @2 1 2"><v:f eqn="prod @3 21600 pixelWidth"><v:f eqn="prod @3 21600 pixelHeight"><v:f eqn="sum @0 0 1"><v:f eqn="prod @6 1 2"><v:f eqn="prod @7 21600 pixelWidth"><v:f eqn="sum @8 21600 0"><v:f eqn="prod @7 21600 pixelHeight"><v:f eqn="sum @10 21600 0"><v:path connecttype="rect" gradientshapeok="t" extrusionok="f"><o:lock aspectratio="t" ext="edit"><v:imagedata title="" src="file:///C:\DOCUME~1\Lars\LOCALS~1\Temp\msohtml1\01\clip_image001.png"><br />I know these guys are agressively growing and hiring - reach out to them if you are interested in this space or know someone who would be a good fit. I think their immediate needs are on the engineering/infastructure side.<br /></v:imagedata></o:lock></v:path></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:stroke></v:imagedata></o:lock></v:path></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:stroke><?xml:namespace prefix = v /><v:stroke joinstyle="miter"><v:f eqn="if lineDrawn pixelLineWidth 0"><v:f eqn="sum @0 1 0"><v:f eqn="sum 0 0 @1"><v:f eqn="prod @2 1 2"><v:f eqn="prod @3 21600 pixelWidth"><v:f eqn="prod @3 21600 pixelHeight"><v:f eqn="sum @0 0 1"><v:f eqn="prod @6 1 2"><v:f eqn="prod @7 21600 pixelWidth"><v:f eqn="sum @8 21600 0"><v:f eqn="prod @7 21600 pixelHeight"><v:f eqn="sum @10 21600 0"><v:path connecttype="rect" gradientshapeok="t" extrusionok="f"><?xml:namespace prefix = o /><o:lock aspectratio="t" ext="edit"><v:imagedata title="" src="file:///C:\DOCUME~1\Lars\LOCALS~1\Temp\msohtml1\01\clip_image001.png"><v:stroke joinstyle="miter"><v:f eqn="if lineDrawn pixelLineWidth 0"><v:f eqn="sum @0 1 0"><v:f eqn="sum 0 0 @1"><v:f eqn="prod @2 1 2"><v:f eqn="prod @3 21600 pixelWidth"><v:f eqn="prod @3 21600 pixelHeight"><v:f eqn="sum @0 0 1"><v:f eqn="prod @6 1 2"><v:f eqn="prod @7 21600 pixelWidth"><v:f eqn="sum @8 21600 0"><v:f eqn="prod @7 21600 pixelHeight"><v:f eqn="sum @10 21600 0"><v:path connecttype="rect" gradientshapeok="t" extrusionok="f"><o:lock aspectratio="t" ext="edit"><v:imagedata title="" src="file:///C:\DOCUME~1\Lars\LOCALS~1\Temp\msohtml1\01\clip_image001.png"></v:imagedata></o:lock></v:path></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:stroke></v:imagedata></o:lock></v:path></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:f></v:stroke>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com1tag:blogger.com,1999:blog-4796026200062518681.post-7709782270059602782007-01-12T14:32:00.000-08:002008-12-11T07:39:34.465-08:00<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/_clyuM-SLos8/RagXQerNVII/AAAAAAAAABg/kEqqcppx3Tc/s1600-h/stubhub.gif"><img id="BLOGGER_PHOTO_ID_5019287356584055938" style="CURSOR: pointer" alt="" src="http://1.bp.blogspot.com/_clyuM-SLos8/RagXQerNVII/AAAAAAAAABg/kEqqcppx3Tc/s320/stubhub.gif" border="0" /></a><br /><br />StubHub<br /><br />WHO: Jeff Fluhr (GSB 01 Social), Eric Baker (GSB01)<br /><br />This is a posting to congratulate a couple of GSBers who built a great company and recently sold it to one of the big internet players. The news came out on <a href="http://www.techcrunch.com/tag/stubhub/">TechCrunch </a>that <a href="http://www.stubhub.com">StubHub</a> was being acquired by <a href="http://www.Ebay.com">Ebay</a> for $310M last week after a few earlier rumors. The TechCrunch article is a little misleading because they quote gross revenue for StubHub which I think includes the ticket prices instead of just the StubHub service revenue (my estimate on that is about $100M).<br /><br />I dug out the Stanford GSB case on StubHub and found this great quote:<br /><br /><span style="FONT-STYLE: italic">"Sure, you can call us Ivy League scalpers. But this is a very attractive business, and the more that teams embrace it, the more legitimate online trading becomes."</span><br />- Eric Baker, StubHub founder and President<br /><br />StubHub started with a great market - sports enthusiasts - and found a niche where no other online player was willing to go - between the buyer and seller - to make a great company. StubHub was able to thrive and win business away from Ebay because they placed themselves in the transaction, taking the sellers credit card details and a terms of use clause that allowed them to use the credit card to find the buyer an equivalent ticket if the transaction failed. StubHub made money and generated healthy cash margins allowing them to build the company on a low investment. I don't know the details but I be both founders will be happy with this outcome.Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com1tag:blogger.com,1999:blog-4796026200062518681.post-6243235113001955732007-01-09T17:08:00.000-08:002007-01-09T18:51:45.195-08:00<a href="http://savethewaves.freepledge.com/" target="_blank"><img src="http://www.freepledge.com/images/logo.jpg" alt="Visit Save the Waves Coalition's store" border="0" /></a><br /><b><span style="color: rgb(16, 104, 64); margin-left: 15px;font-family:lucida grande,tahoma,verdana,arial,sans-serif;" >Shop • Donate • Feel Good</span></b><br /><span style=";font-family:times new roman;font-size:85%;" ><span style="font-size:100%;"><br /><span style="font-family:trebuchet ms;font-size:130%;">FreePledge</span><span style="font-size:130%;"><br /><br /></span><span style="font-family:trebuchet ms;font-size:130%;">WHO: Jonathan Xu (MS MS&E 03), Caroline Bernardi (GSB06 SO), Valorie Cook Carpenter (GSB 82), Alex Musatov (GSB06) and Farida Sandsui (GSB07 SO)</span><span style="font-size:130%;"><br /><br /></span><span style="font-family:trebuchet ms;font-size:130%;">FreePledge is a project that is hoping to remake philanthropy into e-philanthropy and leverage the power of growing e-commerce market to power non-profit organizations. It took me about five minutes to sign up, designate a non-profit and look up participating retailers - go to </span><span style="font-size:130%;"><a style="font-family: trebuchet ms;" href="http://www.freepledge.com/">FreePledge</a></span><span style="font-family:trebuchet ms;font-size:130%;"> now to do the same. Once it is configured all you do to donate is start your next ecommerce transaction by following the link to the e-tailer on FreePledge. The item is bought, shipped and supported by the e-tailer (SAME PRICES, or lower) and FreePledge handles getting a portion of the profits to your designated non-profit. Simple. Hopefully once FreePledge gets established they can tap into browser cookies and let you start with the e-tailers directly.</span><span style="font-size:130%;"><br /><br /></span><span style="font-family:trebuchet ms;font-size:130%;">FreePledge is a technolgy solution that is trying to reach out to all the socially-minded consumers out there and leverage non-profit supporting programs offered by most major e-tailers. They are following the lead of serveral off-line examples including </span><span style="font-size:130%;"><a style="font-family: trebuchet ms;" href="http://www.schoolpop.com/moreinfo/pghome/">SchoolPop</a></span><span style="font-family:trebuchet ms;font-size:130%;"> (support your local school by shopping) and the latest </span><span style="font-size:130%;"><a style="font-family: trebuchet ms;" href="http://www.joinred.com/">Red Campaign</a> (fight AIDS in Africa by buying iPods, using American Express, shopping at the Gap, etc). It is also a big opportunity as Jonathan has shared with me - there are 1.4M non-profits in the US that spend a total of $1.3T and employ 10% of the US workforce.<br /><br /></span><span style="font-family:trebuchet ms;font-size:130%;">I would like to congratulate these guys on building out the idea and having great early success:</span><span style="font-size:130%;"><br /><br /></span><span style="font-family:trebuchet ms;font-size:130%;"> - launched in September 2006</span><span style="font-size:130%;"><br /></span><span style="font-family:trebuchet ms;font-size:130%;"> - 150 non-profits signed up</span><span style="font-size:130%;"><br /></span><span style="font-family:trebuchet ms;font-size:130%;"> - 150 (and growing weekly) retailers participating</span><span style="font-size:130%;"><br /></span><span style="font-family:trebuchet ms;font-size:130%;"> - growing user base and over $5K donated so far</span><span style="font-size:130%;"><br /><br /></span><span style="font-family:trebuchet ms;font-size:130%;">Help them out - every transaction helps and it does not take much to make a difference.</span><span style="font-size:130%;"><br /></span><br /></span></span><span style=";font-family:times new roman;font-size:85%;" ></span>Lars Leckiehttp://www.blogger.com/profile/04245777712808678698noreply@blogger.com0