December 4th, 2008

LeWeb sold out

Posted by Dennis Howlett @ 6:36 am

Categories: Uncategorized

Tags: Hotel, Financial Accounting, Finance, Dennis Howlett

Much to my surprise but relief LeWeb 2008 has sold out. That’s what Loic LeMeur told me the other evening. Given the economic downturn, that has to count as an extraordinary result. Perhaps things in Paris are not as bad as they are elsewhere. Several of those attending have been struggling to find hotels in the city. That contrasts sharply with what I found last month when trying to book for the event. At the time, I had a choice of over 100 hotels.

As a technology conference, LeWeb is a strange mix of people from the world of arts, science and business but it is always worthwhile. The quality of attendees and the sessions can’t be beaten outside of the US and it is always a fun event.

Who for instance would want to miss Steve Gillmor taking on Microsft’s Dan’l Lewin, investor Yossi Vardi being put through his paces by Kara Swisher or listen to Chris Anderson, the curator of TED?

The tech industry may be shivering from the cold bite of economic recession but it will be interesting to get a bead from those who are much closer to the action than I.

November 4th, 2008

Trade show horrors

Posted by Dennis Howlett @ 9:30 am

Categories: Uncategorized

Tags: Booth, Sales Strategy, Sales Force Management, Sales, Dennis Howlett

The global sales VP of an enterprise software company once told me that 70% of his salesforce are D-graders the company had to constantly winnow. Tip up at a trade conference and you’ll see them in abundance.

A guest column over at Sandhill by Elizabeth Cook points up some of the horrors she saw at the recent Oracle OpenWorld trade floor:

• The Slump: Booth staff slumped over, focused intently on their handheld devices. No acknowledgement of passers-by. Some sat hunched in a chair, others stood back to the aisle. A widespread problem.
• The Texting Talker: One representative came to the edge of the booth to talk with me, then repeatedly checked his messages. “Don’t worry, I’m still talking to you” he said as he started texting a reply. Don’t worry – I’m outta here.
• Cell Phone Snobs: Also a widespread problem. No one stops to talk to someone who is clearly too busy to be bothered.
• Eaters: Even if you are the only representative from your company, you don’t eat in the booth during the peak traffic time. If you have more than one person at the show, take turns and eat away from the booth – during a slow time.
• The Huddle: Groups of company representatives, huddled in conversation, paying no attention to passers-by, often with backs to the aisle.
• The Glazed Gaze: Too bored, disinterested, or hung-over to put on a game face.
• The Clearly Uncomfortable: Some people are just not suited for booth duty. Even if you have a technical product, selling to a technical audience, your programmers may not be the best representatives on the trade-show floor.

Keep in mind, these are behaviors I observed during the peak-traffic times. And I couldn’t make this stuff up.

On the other hand, some companies got it right. Interestingly, the market leaders had buttoned up, professional operations.

So true. As the conference season starts to wind down, I see these kinds of thing all the time. They’re enough to make any CXO weep. How the heck are you supposed to get  a sales person’s attention when he’s shoving burritos down his neck or yabbering into a Crackberry? That’s assuming the person isn’t showing obvious signs of recovery from the previous night’s party?

Hungry companies don’t do this kind of thing. They may not have the best sales pros but they sure as heck know how to give attention. That above everything is what prospective customers want. Whatever your stage in the startup game, don’t get into bad habits. They’re costly.

September 29th, 2008

Zoho bitterness at the credit crunch...and a solution

Posted by Dennis Howlett @ 7:54 am

Categories: Uncategorized

Tags: Capitalism, Financial, Alchemy, Wall Street, Zoho, Alchemy Analogy, Financial Accounting, Finance, Dennis Howlett

I have a lot of sympathy for Sridhar Vembu. CEO of AdventNet, the parent company behind Zoho. His last two posts reflect much of the fear and frustration behind what I am hearing in the startup world. But amid the gloom, Sridhar offers a glimmer of hope. A few snippets. From We’re all Japanese now:

…don’t confuse libertarian economics with the “free market capitalism” claptrap coming out of the Wall Street financial complex; when Wall Street gunslingers touted the miracles of “capitalism”, what they really meant was their government-conferred right to borrow easy money from the Federal Reserve, leverage themselves up 20 to 1,  even 40 to 1 while speculating with that easy money, paying themselves tens of billions collectively in bonuses, finally inflicting hundreds of billions, soon to reach trillions, of losses on the taxpayer when those speculations predictably failed . The Wall Street version of financial capitalism has about as much to do with real savings and investment led capitalist wealth creation as alchemy has to do with with chemistry. The alchemy analogy is particularly appropriate: much of the Wall Street “business model” was really transmuting pools of highly risky, toxic mortgages into nearly risk-free “golden” securities.

That’s one of the best summations I’ve read about the mess that is Wall Street today.  About the only thing it misses is the extent to which Wall Street financial engineers managed to swell their pockets by manipulating the tax system. But that’s for another blog and another day. As I’ve said elsewhere, even relatively simple control questions could have surfaced the problem. But they didn’t. This is the myopia that develops when money seems to be pouring from the skies. We eventually become blinded by the golden glow of a seemingly never ending stream of funds.

Roll back one post to Sridhar’s Surviving the financial crisis:

It seems clear that we are heading into another nuclear winter, this time led by housing and financials. It is going to impact the tech industry, but this time as suppliers not as direct bubble-blowers.  Companies that have a strong balance sheet (we prefer zero debt), and the ability to adapt and flex will survive the wreckage. Customers are hurting, so attractive pricing is a must - there is going to be price deflation in tech. These are the rules we live by at AdventNet & Zoho.

Over the weekend, Jason Calacanis caused something of a stir with his long email newsletter that was posted to Silicon Alley Insider, only to be torn down later (and at Techcrunch) Calacanis predicts that 50-80% of startups will fail in the coming 18 months and that the ‘depression’ will last years. To his credit Jason offers a menu of sound advice - everything from belt tightening to hiring the best and generating revenue.

It is this last part that is a worry. Many of the startups we’ve seen in the last 18 months have been headed down the ad supported route. I’ve never believed that’s sustainable except for the very largest sites. The money simply isn’t there to go around.

By definition, that means very few survivors, huge cash burn for those that are building mind share but ultimately a two finger salute to the ‘build it first, figure out business model later’ brigade of VC buccaneers. If you have any doubt then check what the market thinks about Google’s near term prospects. (Hint: it’s trading at a 52 week low and as I write this, is off some 5.6% from the previous close.)

What about enterprise startups? Zoho is the poster child for bootstrapping, taking on the big boys and still managing to do well. Zoho has the benefit of having lived through a past storm, learning from the lessons such experiences deliver. The same goes for Jason Calacanis (and you wonder why he raised all that money?)

Survival will mean a sharpening of the price pencil. Services that today seem modest at $20per month compared to on-premise pricing will come under pressure. If Zoho can do it, so can you.

September 26th, 2008

Startup essentials: Dr. Pepper, coffee and accessories

Posted by Dennis Howlett @ 8:07 am

Categories: Uncategorized

Tags: Dr., Beverage, Accessory, Food & Beverage, Manufacturing, Dennis Howlett

One of my Irregular chums started a GoogleGroup thread about what you need in a job that requires you work from a home office. The same can be said for the 1-3 person startup. The conversation immediately became a discussion of the merits or otherwise of different coffee making facilities and cold drinks. Given the coffee culture associated with startups (I know one guy who roasts his own blend) it seems fitting to let you in on Irregular secrets. After all, some have worked at startups and many of us are micro business people.

Jeff Nolan kicks off recommending  a Jura Capresso S9 espresso machine, 60″ plasma and a series III tivo HD. I’m sure there’s method in Jeff’s thinking, I’m just not sure how a startup person would find time.

Zoli Erdos always takes things that little bit further and suggested a poolside cocktail bar. Of course you need the pool first.

Jason Wood who has recently made a return to blogging after a nine month hiatus then turned the conversation to the merits or otherwise of Dr Pepper.  As a Brit I find this beverage the closest thing to vomit inducing since the days when my mom used to force feed me with cod liver oil. Not the capsules I might add but the real McCoy. I understand Dr Pepper is an iconic drink in the US and Jeff quickly chimed in with:

I was thinking of you last night when I was swigging my diet Dr. Pepper… “damn that Jason Wood for shining a light on how good Dr. Pepper is!”

Not to be outdone, Bob Warfield offered these pearls:

“DiDip”, as we used to affectionately call it in my college days.

Another fine Texas product, and, like anything else, it’s worth straying from the mainstream favorites to see what else is out there.  Try IBC root beer or Big Red, for example.

Sounds like a handy fridge in that home office is helpful too.

That’s one thing I can help with. I found a great second hand bottle bar. The only snag, you have to haul it over to the US.  Bob also offered culinary tips on making your own root ginger ale, a personal favorite of mine. While on the topic of Dr. Pepper, Vinnie Mirchandani came back with:

I am surprised Brian Sommer allows any shipment of the beverage to go anywhere but to his house…I think he likes the sugared version though.

When I went to school in TX it had a cult following. I lost interest when some smart ass twisted the jingle to “I am a pecker, you’re a pecker too”

By this stage I was feeling like I was being well and truly peppered (sic) but fortunately, David Terrar came to the rescue with:

No thanks on the Dr Pepper - I actually identify more with the Matt Albie character in Studio 60 - constantly wired with a Red Bull in hand whilst working. Which leads me on to the coffee - I had a Jura Impressa (personally imported from Switzerland) for a couple of years but couldn’t find anybody to maintain it, so gave it to a friend back in Switzerland.  Currently got a Siemens T55 (was £600 - about $1,100), which is a badged version of the original Gaggia Synchrony.  The outfit that services it says that we drink more coffee than any of his industrial clients.

Out of the blue, SAP’s Mark Yolton chipped in via Twitter saying:

@DT = I vote for diet Dr. Pepper as the best thing in the world, in case my vote counts among the Irregulars … and “Blue Bottle” coffee.

Just when I thought the conversation was taking on a real shape, Vinnie comes back with:

Craig (Cmehil), you could always drink the HP ink-Koolaid, At $ 5,000 a gallon it is supposed to be pretty damn smooth :)

Ever the man of wise words, Sig Rinde brought this rigorous discussion to a close with:

Wow, the “carbonated-sugarbomb subculture of telecommuting”… hope
there is much running and cycling happening to burn all that off!

No, ample supply of Badoit or San Pellegrino and Rosé should suffice.
And espresso of course (being lazy I do Nespresso).

So there you have it. The collective wisdom (ahem) of the Irregulars comes down to Dr. Pepper and whatever coffee machine your budget can afford. Still, I was a tad disappointed that we didn’t hear from Thomas Otter. In my opinion, he has written the definitive article on the topic: Simplicity, elegance and the Java bean. It’s a clever piece that ties this topic very neatly back to enterprise software.

What beverages would you recommend the aspiring entrepreneurial startup?

August 25th, 2008

Get those ToS sorted

Posted by Dennis Howlett @ 4:31 am

Categories: Uncategorized

Tags: Terms Of Service, Ning, E-mail, Online Communications, Dennis Howlett

The spat between WidgetLaboratory and Ning highlights one of the running sores in the current rush to all things 2.0: no-one and I mean no-one has given enough thought to how Terms of Service (ToS) are going to operate in the real world once cloud based services start to scale and third parties tangle with each other.

On this occasion, I agree with Mike Arrington that the WidgetLaboratory folk have behaved in an asinine manner. Regardless of the rights or wrongs, behaving like school children in email is guaranteed to get anyone’s back up. But then in the testosterone driven world of Silicon Valley, one shouldn’t be surprised when tempers flare. But I see a deeper malaise and it starts with Google.

I’ve written on a number of occasions that Google’s inconsistent terms of service make it really difficult for end users to be 100% certain what their rights to data really are across all their services. In the WL-Ning  email trail, Ning invokes its blanket service kill clause. In email dated August 22nd, Ning’s general counsel Bob Ghoorah says:

…our Terms of Service clearly state that “Ning has the right (at its sole discretion) to delete or deactivate your account, block your email or IP address, or otherwise terminate your access to or use of the Ning Platform or any Network, or remove and discard any Code or Content within any Network, without notice and for any reason.”

WL can kick and scream as much as it likes but that’s about as plain English as it gets.

Whether Ning is ‘right’ or ‘wrong’ is irrelevant to the WL case but has implications for anyone using the platform and APIs to add in services. Dare Obasanjo offers a practical way to solve these types of problem but sadly, it doesn’t address the ToS issues.  I can see why Ning needs to protect itself in the face of unknown pressures on its network. But in the Enterprise 2.0 world of tomorrow where code might be running here there and everywhere, developers of new servicves have got to think more clearly about what they’re doing. Network owners also need do their due diligence. In this case, it seems Ning didn’t know that WL was harvesting user information. Why not?

I am currently working on a Web 2.0/Enterprise 2.0 style project that involves all sorts of licensing implications and risks based on where code is run. We’ve been attempting to iron these out for nearly three months and every turn seems to involve either a tussle with legal (where the default position is almost certainly ‘no’) or a short term workaround. I understand the situation from all sides but finding a satisfactory answer is far from straightforward. The lesson?

Anyone engaged in the current wave of services ‘running anywhere’ needs to ensure that the ToS and other broad legal questions are understood, articulated and resolved as early as possible. That is particulary important in freemium models because whenever money gets involved, people can get very tetchy.

It may seem like an un-necessary waste of time and a thundering irritation when developers are mad keen to throw code over the wall or where takeup hockey sticks. But as the WL-Ning situation demonstrates, a failure to understand what’s going on can have unwelcome consequences.

August 6th, 2008

Zoho's millions

Posted by Dennis Howlett @ 7:14 am

Categories: Uncategorized

Tags: Network Management, Zoho, Sales Strategy, Public Relations, Network Administration, Networking, Sales, Marketing, Corporate Communications, Dennis Howlett

It’s not often I get excited by adoption numbers but the fact Zoho has passed the million user landmark represents an outstanding achievement and a cause for celebration. Zoli Erdos, chief hand waver and Irregular chum has all the details. I was more interested in the paying accounts but as Zoli says:

Zoho’s story has been that Adventnet, the parent company with “boring” but reliable, cash-cow network management products is financing the “Zoho experience”.  Well, here’s an update to that story: the Zoho brand itself has been self-sustaining for a while now. While Zoho does not disclose numbers - it’s their prerogative, being a closely held private company - they apparently have paying users.

My understanding is that Zoho expects to reach profit ‘within the next year’ at which point they will talk about the registered user to payer ratio. This is a key metric and one that no freemium service can ignore.

What is MUCH more interesting to me is that Zoho has achieved a credible level of business traction with almost zero marketing and sales resource. Instead, it has concentrated on engineering which, as Zoli quipped to me IS the New Marketing. The company currently has 250 engineers working on the Zoho range. This level of achievement also underscores fellow Irregular Bob Warfield’s contention that much of the current analysis around saas business models is bunk. A view with which I thoroughly agree.

I’m also interested in the way the company has gained traction. The spike in May occurred when the company announced its tie into Google and Yahoo. Apart from demonstrating the incredible gravitational pull these vendors generate, it also provides proof positive (at least for now) that there doesn’t have to be a winner takes all Power Law in the cloud computing space. I hope Microsoft is taking note, even if Zoho’s numbers represent a fleabite on the enterprise office landscape.

Given my curmudgeonly leaning, what makes Zoho such an attractive company? I could think of many reasons but fairly high on the list is the way in which they work with people like me. They don’t deluge me with meaningless, legalese driven PR BS. Instead they concentrate on the facts. When things go wrong, they respond. But I think Vinnie Mirchandani gave one of the best reasons when he said to me that in a world where we are so used to testosterone driven managment styles, “Zoho comes across as relatively humble.” I hope that as they grow, they don’t forget their roots.

August 6th, 2008

Welcome Zack and other good stuff

Posted by Dennis Howlett @ 6:50 am

Categories: Uncategorized

Tags: Twitter, Development Tools, Strategy, Software Development, Software/Web Development, Management, Dennis Howlett

We’re beefing up resources by adding in Zack Whittaker as a contributor. For those that don’t know, Zack is already contributing under the iGeneration banner. That makes him the perfect candidate for Alley. Tough, knowledgeable, a great communicator and a product of the computing generation, he’s the go-to guy on all things shiny.

I’ll continue to follow certain companies in the enterprise startup space but will also be applying my curmudgeonly skills tinged with a little humor to riff on those that are not making the grade - in my (not very) humble opinion.

As a taste of things to come, here’s an image I found in my FriendFeed a few moments ago uploaded by Sarah Austin. Everyone knows the Twitter Fail Whale but who would have thought someone would figure a way of making money by applying the moniker to one of our national pastimes - swilling beer? Maybe that could be part of Twitter’s business model?

Now back to normal programming.

July 14th, 2008

Enterprise 2.0 looking more like 1.0?

Posted by Dennis Howlett @ 10:43 am

Categories: Uncategorized

Tags: Network, Enterprise 2.0, Social Networking, Public Relations, Online Communications, Marketing, Advertising & Promotion, Corporate Communications, Dennis Howlett

As the hype (and confusion) over social networking and all things X2.0 accelerates, it seems that the PR/marketing techniques that dominated the late 1990’s are back in fashion. Take this from an email and press release I received today:

Email: “I thought you might be interested in news on the recent exponential growth of XXXX, the online white-label social networking platform. The company has doubled last year’s growth in the first six months of this year.

Thus indicating demand for online social networking is ever increasing.”

Press release: “XXXX, the leader in empowering online communities, has doubled its growth in the first half of this year, compared to the entire 2007 calendar year, increasing revenues almost 200% in the period January to June 2008.

The company, which specializes in building social networking platforms and online communities for organizations, now has a customer base of 80 clients, in a variety of industry sectors including music, media and entertainment.”

All this tells me is that a particular startup company is doing relatively well. But then I wonder. The company isn’t eating its own dog food. If it really is building communities then its approach to someone in my shoes would be entirely different.

There’s a scarcity of solid market data to make the assertion that: “demand for online social networking is ever increasing.” I have no doubt that there is interest but that doesn’t automatically translate into demand. That’s an entirely different concept.

Much has been made about the way customers want to be approached in a different manner, how the Tivo generation is tuning out advertisements and how customers are much more in control of conversations around brands and products. How about fixing the PR/marketing that goes with it? Apparently not. If anything, I am receiving an increased volume of ‘messages’ that bear the 1990’s hallmarks of hyperbole. I tune those out, along with the claims made.

As to the specific claims: among the medium sized and large companies I speak with, a certain caution remains about the implications of these new technologies. The likely impact on the need to adhere to regulatory requirements is a specific concern. Just how this stuff gets implemented in a way that delivers lasting value remains unclear and community building is far from a done deal.

If government is to be regarded as any yardstick, recent attempts to keep social software out of government as discussed at Mashable indicates there is a long way to go.

June 23rd, 2008

Ruby on Rails: scaling to 1 billion page views per month

Posted by Dennis Howlett @ 9:03 am

Categories: Uncategorized

Tags: LinkedIn, Ruby, Joyent, Ruby On Rails, Software/Web Development, Web Development, Dennis Howlett

While a lot of attention has been focused on Twitter with questions about whether Ruby on Rails scales, LinkedIn has been quietly running a RoR application on Facebook that is beating down around 1 billion page view per month. Bumpersticker, a relatively trivial Facebook application that allows you to create a cartoon that you can put on your Facebook friends’ sites.

Developed by LinkedIn’s Light Engineering Development team, the service was designed to help LinkedIn clearly understand the viral growth vectors that impact a web application. Jim Meyer, manager of LED says that Rails scales like any other web application: “That is to say you need to take into account all the components from the moment the request is received at the load balancer all the way down and all the way back again.” Meyer identifies three basic design guidelines in all cases that give customers a better and faster experience that in turn increases the likelihood they will use the application:

• Talking to spindles is bad - talking to file systems and databases has to be minimized
• Dynamic content is your enemy. Anything you can turn into static, including periodic re-caching should be removed.
• Push everything you possibly can to the client to reduce the amount of traffic going over the network no matter where the client is.

According to Meyer, the net result is that the more time people can play with an application, the more likely they are to pull people in which helps make applications viral. Bumpersticker averages 1.4 million daily users, peeking at 1.7 million and each use includes around 2o page views. That calculates out to around 1 billion page views per month. Joyent, which provides LinkeIn’s cloud computing environment claims this amounts to transfer rates of 1 gigabit per second sustained transfer rate and around 100TB per month of data transferred. LinkedIn achieves this by throwing as much content as possible at Joyent’s F5 load balancers.

Rod Boothby, evangelist for Joyent says the secret to making applicaitons of this kind work is Joyent’s own distribution of Solaris which includes DTrace: “It helps you instrument every piece of an application so you can see where bottlenecks occur, quickly fix them and scale upwards. Just as important, the key for enterprise is to have a data center that includes everything with which you are already familiar. With Amazon you have to make material changes, with Google, you pretty much have to change everything.”

Given that Bumpersticker is relatively trival, I asked Boothby what’s the point? “It has allowed LinkedIn to perfect a new way of fast tracking the development of new applications, edge cases if you will that need to scale quickly and reliably. LinkedIn is for example using Joyent’s cloud to work on LinkedIn mobile (currently in beta) applications that will need to work anywhere in the world.”

Update: Joyent has a video in which LinkedIn explains what they did.

June 5th, 2008

Will Enterprise 2.0 be a wash?

Posted by Dennis Howlett @ 2:44 am

Categories: Uncategorized

Tags: Enterprise 2.0, Dennis Howlett

Next week sees the start of Enterprise 2.0 in Boston. You’d think that given the line up of rock star speakers that it would be a magnet for eager buyers looking to find out what’s likely to be new, fresh and shiny in the wonderful world of all things social. Not if you read what my colleague Jevon MacDonald has to say about the event:

Those customers who are actually making purchases right now are a little timid and not sure exactly what to expect, and usually it was a friend who took them out to the party.

When the lights go down and the drinks start flowing however, things aren’t as clear as they were before and it isn’t always obvious who you are getting in bed with.

The Drag Queens of Enterprise 2.0 are those old Enterprise software vendors who haven’t done anything to change their products, but instead they went out and have bought a nice dress and have put some eye shadow on their football player physiques.

Ouch! I’m not going to name names but just check out the Diamond sponsor list. My firend and colleague Vinnie Mirchandani is more to the point:

 ”Drag Queens”

fellow EI Jevon McDonald uses that term to describe “old enterprise companies dressing up like a pretty E2.0 babe”

Against that background I read a Sandhill piece on Jesper Andersen of Oracle and its plans to become a “2.0 babe”

Oracle is hosting a dinner for several EIs at next week’s Enterprise 2.0 conference.

Wonder what the dress code is? :)

Eeek! Every felt you’ve just been hit over the head by a cluestick?

In the meantime every man and his dog wants to pitch their shiny new stuff at me. I guess that’s because I’m on the ‘media’ list. I’m not sure how that happened but hey ho, even if I have yet to see a single approach that bears even a passing resemblance to the so-called ‘new’ social media.

But then I’m also chairing a panel about microblogging. You all know what I think about Twitter so I couldn’t resist adding Loren Feldman. His understanding of Twitter is up there with my cynical enterprisey friends. I have a feeling that sock puppets might be involved. Whatever happens and given we’ve got the gravyard slot - last panel on the last day etc - I’m sure the three or four folk who turn up will be entertained. That’s my expectation.