It’s hard to sell scalability


This post is by Ed Sim from BeyondVC

I have written many recent posts on Internet and web-based models, but I still do spend a good portion of my time with companies selling in the enterprise.  After a series of meetings over the last few days with startups and some of my portfolio companies, I wanted to highlight one important fact – it is hard to sell scalability.  In addition, it is important to highlight that you only have one chance to make a first impression.  So what the hell does all of this mean ?

Every interaction with your sales prospect or customer is a chance to impress.  What that means is if your user interface is weak or if your product is hard to install or if during a POC process it takes you 3 days to get set up while it takes a few hours for your competitor, you have most likely lost the sale.  If your product is hard to use or set up, then how is the customer going to believe that your product is more scalable?  So take a word of advice, the companies that tend to do well are the ones that have nailed down the first impression – strong and clear value propostiion, great UI, and easy to use and install.  Leading with scalability is a losing proposition.  If someone offered you the opportunity to buy a Ferrari or a Ford Pinto at a similar price, I am sure most people would opt for the Ferrari.  If I told you later on that the Ferrari had a Ford Pinto engine and the Ford Pinto had a Ferrari engine, I would imagine that most would still go for the looks and the Ferrari.  For many buyers in the IT space, first impressions mean a lot and once a sales prospect falls in love with the Ferrari, it will be hard to keep pounding the table saying that your Ford Pinto will outperform the Ferrari by an order of magnitude.  Many times by then you have probably lost the sale. I am not saying that scalability doesn’t matter because it does.  Every customer expects you to scale and every competitor will say they scale. My only point is that if you can scale like no tomorrow but what the customer sees and touches is subpar, you are going to have a hard time generating sales.

One final point-having awesome sales engineers is key to success for any company selling in the enterprise.  These positions are hard to fill as you are typically looking for someone who is not only technically savvy but also strong in sales as well.  Great SEs help you close sales, make the sales prospect feel comfortable, work out the initial kinks in your technology, and provide great product feedback for your roadmap.

UPDATE: I got a few emails from readers who thought that I meant scale doesn’t matter.  It does, just not as the lead-in for why your product is better than your competitor.  It is hard to see, touch, or feel scale in a sales meeting and what you are left to do is make sure that every sales prospect engages with you in a proof of concept so you can demonstrate scale.  And yes, if you can’t install it easily and if the customer can’t use it easily, then scale does not matter.  You have to show them how your product solves their problem and why it is easy to use.  Sometimes engineers can spend too much time on having the fastest engine and not enough time on designing a beautiful body.  Scale matters but not as your main selling point.

The post It's hard to sell scalability appeared first on BeyondVC.

It’s hard to sell scalability

I have written many recent posts on Internet and web-based models, but I still do spend a good portion of my time with companies selling in the enterprise.  After a series of meetings over the last few days with startups and some of my portfolio companies, I wanted to highlight one important fact – it is hard to sell scalability.  In addition, it is important to highlight that you only have one chance to make a first impression.  So what the hell does all of this mean ?

Every interaction with your sales prospect or customer is a chance to impress.  What that means is if your user interface is weak or if your product is hard to install or if during a POC process it takes you 3 days to get set up while it takes a few hours for your competitor, you have most likely lost the sale.  If your product is hard to use or set up, then how is the customer going to believe that your product is more scalable?  So take a word of advice, the companies that tend to do well are the ones that have nailed down the first impression – strong and clear value propostiion, great UI, and easy to use and install.  Leading with scalability is a losing proposition.  If someone offered you the opportunity to buy a Ferrari or a Ford Pinto at a similar price, I am sure most people would opt for the Ferrari.  If I told you later on that the Ferrari had a Ford Pinto engine and the Ford Pinto had a Ferrari engine, I would imagine that most would still go for the looks and the Ferrari.  For many buyers in the IT space, first impressions mean a lot and once a sales prospect falls in love with the Ferrari, it will be hard to keep pounding the table saying that your Ford Pinto will outperform the Ferrari by an order of magnitude.  Many times by then you have probably lost the sale. I am not saying that scalability doesn’t matter because it does.  Every customer expects you to scale and every competitor will say they scale. My only point is that if you can scale like no tomorrow but what the customer sees and touches is subpar, you are going to have a hard time generating sales.

One final point-having awesome sales engineers is key to success for any company selling in the enterprise.  These positions are hard to fill as you are typically looking for someone who is not only technically savvy but also strong in sales as well.  Great Continue reading “It’s hard to sell scalability”

Picks and shovels for the web

We have had quite a resurgence in the web market during the last few years.  A number of great companies have come out of nowhere to become household names, and it seems that everyday we are inundated with news on another slew of new web startups going after the consumer.  And yes, looking for the next YouTube or Facebook or Myspace is exciting.  Depsite all of that, the one area is that is not discussed much is the boring infrastructure market where companies sell the picks and shovels to allow these startups to run their operations.  And what could be more boring than talking about a database or data warehouse?  Anyway, I am glad that Don Clark of the Wall Street Journal wrote a nice article on a new breed of startups going after the database market.  Shamelessly, I would like to add that he has a nice writeup on Greenplum (full disclosure: my fund is an investor and i am a board member).

Granted, the opportunity to make money selling picks and shovels during this web resurgence is definitely much harder as developers typically go for free and cheap software and hardware to launch their new companies.  That being said, every click that we make is being stored somewhere and the companies who can better analyze this data to better monetize their sites will be the winners in the next phase of the web.  This is where Greenplum comes into play.  The company is not only playing off of the data volume and analysis trend but also the move towards commiditization.  As Don mentions in his article, the secret sauce is that our customers can deploy massive data warehouses using our software which is built on top of the open source database Postgres and deploy it on commodity boxes.  The benefit is not only in terms of cost but also in significant performance increases over the competition.  As per Don’s article today:

One user is iCrossing Inc., of Scottsdale, Ariz., which provides analytical services to companies that operate Web sites. Analyzing a day’s worth of some types of data once took 20 to 22 hours, said Tony Wasson, the company’s vice president of engineering. With Greenplum’s technology, and some modifications to its own software, the job now takes about an hour, he said.

Anyway, it is nice to see the mainstream press finally getting the fact that data and analytics matter. Yes, plumbing is boring, but without cost effective platforms which can scale and perform under heavy stress, we won’t be able to reach the full peak of monetization on the web.

The post Picks and shovels for the web appeared first on BeyondVC.

Picks and shovels for the web

We have had quite a resurgence in the web market during the last few years.  A number of great companies have come out of nowhere to become household names, and it seems that everyday we are inundated with news on another slew of new web startups going after the consumer.  And yes, looking for the next YouTube or Facebook or Myspace is exciting.  Depsite all of that, the one area is that is not discussed much is the boring infrastructure market where companies sell the picks and shovels to allow these startups to run their operations.  And what could be more boring than talking about a database or data warehouse?  Anyway, I am glad that Don Clark of the Wall Street Journal wrote a nice article on a new breed of startups going after the database market.  Shamelessly, I would like to add that he has a nice writeup on Greenplum (full disclosure: my fund is an investor and i am a board member).

Granted, the opportunity to make money selling picks and shovels during this web resurgence is definitely much harder as developers typically go for free and cheap software and hardware to launch their new companies.  That being said, every click that we make is being stored somewhere and the companies who can better analyze this data to better monetize their sites will be the winners in the next phase of the web.  This is where Greenplum comes into play.  The company is not only playing off of the data volume and analysis trend but also the move towards commiditization.  As Don mentions in his article, the secret sauce is that our customers can deploy massive data warehouses using our software which is built on top of the open source database Postgres and deploy it on commodity boxes.  The benefit is not only in terms of cost but also in significant performance increases over the competition.  As per Don’s article today:

One user is iCrossing Inc., of Scottsdale, Ariz., which provides analytical services to companies that operate Web sites. Analyzing a day’s worth of some types of data once took 20 to 22 hours, said Tony Wasson, the company’s vice president of engineering. With Greenplum’s technology, and some modifications to its own software, the job now takes about an hour, he said.

Anyway, it is nice to see the mainstream press finally getting the fact that data and analytics matter. Yes, plumbing is boring, but without cost effective platforms which can scale and perform under heavy stress, we won’t be able to reach the full peak of monetization on the web.

The post Picks and shovels for the web appeared first on BeyondVC.

Thoughts on OpenSocial


This post is by Ed Sim from BeyondVC

Tim O’Reilly has a great post on Google’s OpenSocial.  At the end of the day, I couldn’t agree more with Tim’s thoughts that OpenSocial is great for developers but a who cares for users. 

If all OpenSocial does is allow developers to port their applications more easily from one social network to another, that’s a big win for the developer, as they get to shop their application to users of every participating social network. But it provides little incremental value to the user, the real target. We don’t want to have the same application on multiple social networks. We want applications that can use data from multiple social networks.

Would OpenSocial let developers build a personal CRM system, a console where I could manage my social network, exporting friends lists to various social networks? No. Would OpenSocial let developers build a social search application like the one that Mark Cuban was looking for?  No.

I agree Tim.  OpenSocial is like Java for social networking apps-the promise of write once, run anywhere.  It goes back to my point I made in an earlier blog post – I am completely inundated now from requests from Facebook, LinkedIn, and now PlaxoPulse.  I am having a hard time keeping track of all of my contacts, messages, and the like.  It would be great if I could have a service that sat on top of these apps and allowed me to manage all of my relationships from one place.  Sure, some contacts may only be a Linked in contact, some may be a Facebook and LinkedIn, etc.  Check here if you want your music to be shared on this network and not the other one, etc.  You get the idea.  It is not hard to view this data in one place by sucking in RSS feeds from the various services but viewing it in one place vs. managing all of my relationships from one place are two different value propositions.  Jeff Nolan has a recent post about this as well.  Of course the challenge is that the value of these services is their proprietary networks which creates lock-in for the user.  Once users can export and manage that data and without visiting these various platforms then the service begins to lose its lock-in. We see this problem over and over again in many web services – the constant battle between closed and open standards and networks.  If you are the big guy, why bother.  If you are the small guy, it makes sense to join up with many of the other smaller players.  Anyway, enough digression here – I would love to hear your thoughts about how you are spending your time managing your various relationships across different networks and what you would like to see.

The post Thoughts on OpenSocial appeared first on BeyondVC.

Thoughts on OpenSocial

Tim O’Reilly has a great post on Google’s OpenSocial.  At the end of the day, I couldn’t agree more with Tim’s thoughts that OpenSocial is great for developers but a who cares for users. 

If all OpenSocial does is allow developers to port their applications more easily from one social network to another, that’s a big win for the developer, as they get to shop their application to users of every participating social network. But it provides little incremental value to the user, the real target. We don’t want to have the same application on multiple social networks. We want applications that can use data from multiple social networks.

Would OpenSocial let developers build a personal CRM system, a console where I could manage my social network, exporting friends lists to various social networks? No. Would OpenSocial let developers build a social search application like the one that Mark Cuban was looking for?  No.

I agree Tim.  OpenSocial is like Java for social networking apps-the promise of write once, run anywhere.  It goes back to my point I made in an earlier blog post – I am completely inundated now from requests from Facebook, LinkedIn, and now PlaxoPulse.  I am having a hard time keeping track of all of my contacts, messages, and the like.  It would be great if I could have a service that sat on top of these apps and allowed me to manage all of my relationships from one place.  Sure, some contacts may only be a Linked in contact, some may be a Facebook and LinkedIn, etc.  Check here if you want your music to be shared on this network and not the other one, etc.  You get the idea.  It is not hard to view this data in one place by sucking in RSS feeds from the various services but viewing it in one place vs. managing all of my relationships from one place are two different value propositions.  Jeff Nolan has a recent post about this as well.  Of course the challenge is that the value of these services is their proprietary networks which creates lock-in for the user.  Once users can export and manage that data and without visiting these various platforms then the service begins to lose its lock-in. We see this problem over and over again in many web services – the constant battle between closed and open standards and networks.  If you are the big guy, why bother.  If you are the small guy, it makes sense to join up with many of the other smaller players.  Anyway, enough digression here – Continue reading “Thoughts on OpenSocial”

Wireless and the lowest common denominator

There is a ton of hype on the wireless front especially with the announcement of Android, the Google operating system for mobile phones.  I too am quite excited about the prospects of having applications that are written once on the Google OS that can be ported to any other phone on any other network that also supports the Google OS.  If any of you have developed apps in the wireless world, that is not exactly how it works as even apps built on the Java Micro Edition Platform need to be tweaked for different devices and different networks.  The idea of having phones and web-based apps that are truly easy to use and truly cross platform is a big one but the proof will be in the details.  The impact will be dependent on how many devices on how many networks that are truly open will be in the hands of the consumer.  In the short term, what Android really does is put pressure on the other wireless players like Nokia to respond.  All of this reminds me of an email that Michael Robertson (CEO of portfolio company Sipphone/Gizmo Project) just sent me.  UntitledIt represents the reality and the opportunity for wireless applications – the majority of people today only send SMS messages and a relative minority use their phones for mobile browsing, email, and other applications. Will easier to use phones, faster networks, and better applications change that?  I am sure that it will as users like my wife and her friends who are not the most technically savvy are starting to get iPhones and using it to post pictures to websites and view Youtube videos on the run. However, in the meantime, I would also remember that the lowest common denominator is still SMS so don’t forget that user base when building mobile apps like community based functions, social networking, games, advertising, etc. because that crowd is still dominating the here and now.

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NYC 2.0 (continued)

I never made it to the Web 2.0 conference yesterday, and you know how I feel about that label :-).  Anyway, I happened to be in San Francisco for a portfolio company board meeting and some other events.  After a Nokia boat cruise with many of the team that launched the awesome Nokia Internet 810 tablet (I will get myself one of those), I had the opportunity to go to a MySpace party to celebrate the opening of their San Francisco office.  I had a great time and while I ran into many friends from the Bay Area, what I enjoyed most was bumping into many of the original New York entrepreneurs that I have known over the last 10 years.  In a scary way, it felt like it was 1997 all over again, and we were at a networking event in New York talking about their first startups.  The only difference is that it is 10 years later, and we have greyer hair.  Jeff Stewart who was part of the Proxicom rollup and founded Mimeo and now Monitor110, said that everywhere he turned he ran into another New York entrepreneur.  Standing next to me was Andrew Erlichson founder of Flashbase (sold to Doubleclick) who I funded years ago and now CEO of Phanfare, across the room was Andrew Weinreich of sixdegrees and now meetmoi, and on the other side of the room was Jason Calacanis of the Silicon Alley Reporter and Weblogs and now Mahalo.  While he is in LA now, I still count him as an original New York entrepreneur.  Jeff and i tried to organize a group picture but just could not make it happen.

You may be thinking to yourself who cares or why is Ed namedropping?  There is a simple answer – I have known many of these guys for the last dozen or so years since the first Internet wave, and it is simply awesome to see everyone still plugging away, following their passions, getting smarter and better, and continuing to build the New York entrepreneurial ecosystem.  I know we are no Silicon Valley, but it is great to see these entrepreneurs all working on their second and third companies.  It was also great to hear their stories of raising their first or second or third rounds of capital for their most recent companies.  When I started as a VC in 1996 and first met many of these entrepreneurs, it was clear that we were all starting from scratch.  We didn’t know what we didn’t know.  We didn’t have entrepreneurs working on their second and Continue reading “NYC 2.0 (continued)”

Are there enough ad dollars for the thousands of small startups?

as i have said before the big keep getting bigger and the low barriers to entry mean more and more small guys are fighting for crumbs. the only way to sustain is if dollars continue to flow from old media to new media and the pie continues to get larger. if it does not, watch out!

clipped from news.yahoo.com

The catch, according to some, is that much of the money flowing toward the Internet is concentrated on a few dozen of the most popular sites. That has left smaller, less well-known sites at a severe disadvantage when it comes to attracting advertising money and surviving.

In the United States, the top 50 Web sites accounted for more than 90 percent of the revenue from online ads in the first half of 2007, according to the Interactive Advertising Bureau and PricewaterhouseCoopers. The top 10 sites accounted for 70 percent of the revenue.

  blog it

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Should I flip or should I build?


This post is by Ed Sim from BeyondVC

It seems that everyday there is a new annoucement of a tiny startup being bought by a large company.  Two days ago it was Jaiku being bought by Google and this morning CBS announced that it is buying Dotspotter, a 10 month old gossip blog.  Put yourself in these entrepreneurs’ shoes – you launch a great product or service today, usage is growing, revenue is nil or minimal, and cocktail party chatter and buzz are at its highest.  You then have the opportunity to sell today at a pretty good number but you forego your chance of building that huge business.  What do you do and how should you think about it?  As i started thinking deeper about this question, I was reminded of the old Gartner Hype Cycle chart.  If we use this as a backdrop, perhaps I could show a framework from which to think about this important decison.

According to Gartner, "A Hype Cycle is a graphical representation of the maturity, adoption and business application of specific technologies."  Similarly, I have graphically represented the choices an entrepreneur has to make in the continuing saga of build or flip.  Let’s call this the "BeyondVC Startup Cycle."Beyondvc_startup_cycle_1 According to Gartner, there are 5 phases in a Hype Cycle (my comments in parentheses): Technology Trigger (product launch), Peak of Inflated Expectations (height of buzz), Trough of Disillusionment (this is harder than I thought), Slope of Enlightenment (the broad market is finally ready), and Plateau of Productivity (better have my next product ready).  I believe the descriptions speak for themselves as what usually happens with the adoption of new technology is that the hype builds quickly but it actually takes a lot longer to reach critical mass.  Similarly, one can superimpose a startup lifecycle on the graph.  If you look at the build or flip question in this context, it is obvious that an easier, less risky choice to make is best done at the Peak of Inflated Expectations or height of the cocktail circuit chatter.  Usually at this point in time, an entrepreneur can maximize short-term value as acquirers will buy more on vision and technology than on business fundamentals.  If you decide to build for the long haul and go for the home run, it will take you a fair amount of effort and time to create the same value that acquirers will pay today at the buzz cycle as they will expect more mature companies to have more established products or services and more milestones hit.  Companies that sell at the early stages should understand that while they may forego going big, if they do not sell today for strategic value then they would have to live up to their hype and be bought in the future for real revenue. In other words, as companies mature the valuation of a startup turns from pure strategic value to one where it is based more on actual revenue multiples and market comparable data.   

At this inflection point, an entrepreneur needs to think about whether they want to and can build for the long haul (taking into account the risk and time to do so) or sell today (net present value of your potential expected outcomes in the future). This is the point where you have built a nice service or product, gotten a number of users, but have not really monetized it or created a scalable business model that can drive profits.  Can you really build a company or is this just a feature for a bigger player?  If you choose to go for it and raise VC funding, you have to really believe that the capital you raise will help you create a much larger pie in the end.  Do you want a larger percentage of a smaller pie or a smaller percentage of a much larger one?  Once you take in the money, it requires a ton of hard work to build a team, continue to innovate, and refine your business model.  There are no guarantees and given the amount of time and energy you expend you could just as easily go out of business after 5 years of effort.  One other factor for entrepreneurs to look at is the opportunity cost or the time you spend on one venture. 

Since I never like to make decisions in a vacuum, if I had an offer, I would test the market to get a read from VCs to see what their interest level is in funding my business and also poke around and speak to a couple of other strategics to see if I could extract more value.  In the end, these valuable data points will help you make a more confident decision – if no VCs bite, then it is an easy decision for you.  If some VCs have an interest, try to understand how much capital and at what price they would be willing to invest.  If you really believe in your business then you should either take the money from the VC or get a significant premium from the strategic investor to sell today versus building your business for the longer term. 

At the end of the day, it comes down to two things.  First, what is your appetite for calculated risk – in finance there is a direct correlation to risk and reward.  If you want the big payday, you are not going to get it investing in risk-free bonds.  Secondly, it comes down to your passion.  Building a company is about more than just the money as money can be fleeting – remember the bubble, it sent a lot of carpetbaggers home.  The ones who have made the big payday have focused on a broader and bigger goal, building an insanely great product or service for their customers and keeping them incredibly happy. As you do the right thing for your customers, you will do right for your investors, your employees, and ultimately yourself.

The post Should I flip or should I build? appeared first on BeyondVC.

Should I flip or should I build?

It seems that everyday there is a new annoucement of a tiny startup being bought by a large company.  Two days ago it was Jaiku being bought by Google and this morning CBS announced that it is buying Dotspotter, a 10 month old gossip blog.  Put yourself in these entrepreneurs’ shoes – you launch a great product or service today, usage is growing, revenue is nil or minimal, and cocktail party chatter and buzz are at its highest.  You then have the opportunity to sell today at a pretty good number but you forego your chance of building that huge business.  What do you do and how should you think about it?  As i started thinking deeper about this question, I was reminded of the old Gartner Hype Cycle chart.  If we use this as a backdrop, perhaps I could show a framework from which to think about this important decison.

According to Gartner, "A Hype Cycle is a graphical representation of the maturity, adoption and business application of specific technologies."  Similarly, I have graphically represented the choices an entrepreneur has to make in the continuing saga of build or flip.  Let’s call this the "BeyondVC Startup Cycle."Beyondvc_startup_cycle_1 According to Gartner, there are 5 phases in a Hype Cycle (my comments in parentheses): Technology Trigger (product launch), Peak of Inflated Expectations (height of buzz), Trough of Disillusionment (this is harder than I thought), Slope of Enlightenment (the broad market is finally ready), and Plateau of Productivity (better have my next product ready).  I believe the descriptions speak for themselves as what usually happens with the adoption of new technology is that the hype builds quickly but it actually takes a lot longer to reach critical mass.  Similarly, one can superimpose a startup lifecycle on the graph.  If you look at the build or flip question in this context, it is obvious that an easier, less risky choice to make is best done at the Peak of Inflated Expectations or height of the cocktail circuit chatter.  Usually at this point in time, an entrepreneur can maximize short-term value as acquirers will buy more on vision and technology than on business fundamentals.  If you decide to build for the long haul and go for the home run, it will take you a fair amount of effort and time to create the same value that acquirers will pay today at the buzz cycle as they will expect more mature companies to have more established products or services and more milestones hit.  Companies that sell at the early stages should understand that while they may forego going Continue reading “Should I flip or should I build?”

On performance based earnouts

I am sure you remember the ebay-Skype deal where ebay coughed up $2.6b upfront for Skype and offered an earnout of up to another $1.7b for hitting performance numbers.  Besides the value of the deal, what struck me most was that 40% of the total potential deal size was based on performance-based milestones.  Fast forward 2 years later and in the day of reckoning it seems that eBay is only going to pay $530mm of the $1.7bb earnout (see Eric Savitz from Barrons post and press release).  I am not going to comment here on whether or not the Skype deal was a complete failure for eBay, but rather I thought I would more importantly share my thoughts on earnouts in M&A transactions.

Quite simply, be wary of performance based earnouts unless you get significant value upfront.  Many times an acquiring company may say that they can’t pay higher than a certain value for your business but if you perform they can pay alot more.  In other words, they want you to put your skin on the line and also incent you to stick around.  That is fine as long as you get more than enough upfront for your business so that any dollar from earnouts is just pure upside.  If you feel that you are not selling for enough and that too much is tied in the earnout, then trust your gut and either rework the deal or walk away. 

Earnouts in theory sound great – the better you perform the more you get.  However in practice it doesn’t always work out well.  First, earnouts could potentially put the acquiring and target company at odds by creating potential perverse incentives for the acquiring company.  Hmm, the company I just bought is doing great but I don’t really want them to hit it out of the park just yet so I may delay giving them their marketing dollars?  You can obviously think of a bunch more examples on this front.  More importantly, though, I feel that unlike a startup, you have relatively little control of your own destiny.  In any M&A with performance numbers, the acquiring company will say it is offering all of these resources and distribution and therefore the revenue, profit, and customer targets should be quite high yet attainable.  In a startup, if you fail it is your fault.  As part of an operating business or larger entity that isn’t always the case as you are most likely dependent on the acquiring company for resources, distribution, and cash to grow and deliver on your promises.  Big Continue reading “On performance based earnouts”

Too many chiefs, not enough indians


This post is by Ed Sim from BeyondVC

Before I dive into this post, I want to apologize to those who may be sensitive to the non-PC nature of this. Anyway, as always, I have met and spoken with a number of startups during the past week.  There are obviously all different types of companies with different funding needs but the ones that have stood out negatively for me are the startups that come in with a pre-baked senior management team and no product.  In other words, I have major concerns when I see SVP of this and SVP of that and I wonder to myself who is going to do all the work if everyone is a Senior VP.  When there are too many chiefs and not enough indians, I worry about how decisions get made and wonder if egos and titles are more important versus getting product out and customers on board.  Sure, some of these teams were quite impressive but in a startup environment keeping your burn low until you get your product in the market and refined is imperative.  In addition, more often than not, business models may change slightly or drastically and what you initially set out to build and deliver may not be the same in the future.  What that means is that your SVP of Marketing may not the be right person 12 months from now.  So do yourself one favor when starting a company-get the right people on board to get the product delivered and the first few customers and as you get feedback from the market and your team, figure out your next hiring needs.  Don’t worry about titles and focus on building an insanely great product.  Having too many chiefs and not enough indians can burn lots of dollars and also scare away potential investors.

The post Too many chiefs, not enough indians appeared first on BeyondVC.

Too many chiefs, not enough indians

Before I dive into this post, I want to apologize to those who may be sensitive to the non-PC nature of this. Anyway, as always, I have met and spoken with a number of startups during the past week.  There are obviously all different types of companies with different funding needs but the ones that have stood out negatively for me are the startups that come in with a pre-baked senior management team and no product.  In other words, I have major concerns when I see SVP of this and SVP of that and I wonder to myself who is going to do all the work if everyone is a Senior VP.  When there are too many chiefs and not enough indians, I worry about how decisions get made and wonder if egos and titles are more important versus getting product out and customers on board.  Sure, some of these teams were quite impressive but in a startup environment keeping your burn low until you get your product in the market and refined is imperative.  In addition, more often than not, business models may change slightly or drastically and what you initially set out to build and deliver may not be the same in the future.  What that means is that your SVP of Marketing may not the be right person 12 months from now.  So do yourself one favor when starting a company-get the right people on board to get the product delivered and the first few customers and as you get feedback from the market and your team, figure out your next hiring needs.  Don’t worry about titles and focus on building an insanely great product.  Having too many chiefs and not enough indians can burn lots of dollars and also scare away potential investors.

The post Too many chiefs, not enough indians appeared first on BeyondVC.

Too many chiefs, not enough indians

Before I dive into this post, I want to apologize to those who may be sensitive to the non-PC nature of this. Anyway, as always, I have met and spoken with a number of startups during the past week.  There are obviously all different types of companies with different funding needs but the ones that have stood out negatively for me are the startups that come in with a pre-baked senior management team and no product.  In other words, I have major concerns when I see SVP of this and SVP of that and I wonder to myself who is going to do all the work if everyone is a Senior VP.  When there are too many chiefs and not enough indians, I worry about how decisions get made and wonder if egos and titles are more important versus getting product out and customers on board.  Sure, some of these teams were quite impressive but in a startup environment keeping your burn low until you get your product in the market and refined is imperative.  In addition, more often than not, business models may change slightly or drastically and what you initially set out to build and deliver may not be the same in the future.  What that means is that your SVP of Marketing may not the be right person 12 months from now.  So do yourself one favor when starting a company-get the right people on board to get the product delivered and the first few customers and as you get feedback from the market and your team, figure out your next hiring needs.  Don’t worry about titles and focus on building an insanely great product.  Having too many chiefs and not enough indians can burn lots of dollars and also scare away potential investors.

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Video advertising just got a big boost


This post is by Ed Sim from BeyondVC

NBC just announced that it is going to offer free TV show downloads online allowing viewers to take more control of their content.  I agree with Fred ,however, that while this is a smart move that this is only half a step since they are limiting the view to 7 days before it self destructs.  More importantly, this makes me think about the free vs. paid discussion and how media companies are increasingly understanding the possibilities and scale that free can provide over paid.  Finally, this move by NBC, I believe, will help open the floodgates for all kinds of video advertising technologies.  In the first iteration of the NBC download service, users will not be able to skip commercials.  My thought here is great, NBC needs to get paid, but they will also have to be innovative and creative and test many different forms of video ads to maximize viewership and revenue.  As we all know, the web is great for targeting and with this move I see a world where one-to-one customized video messages will be delivered directly to the viewer based on location, time of day, content, etc.  Of course, I have to give a shameless plug here for one of the fund’s portfolio companies, Visible World, as this is what it does for video advertisements on broadcast, cable, and web.  Based on our experience to date, better targeting, more relevancy, and customization equals more satisfied viewers and more revenue.  Of course, this is just one example of video advertising that should flourish with free downloads.  I would also love to hear your thoughts about other potential forms of advertising that you believe will be delivered around this content

The post Video advertising just got a big boost appeared first on BeyondVC.

Video advertising just got a big boost

NBC just announced that it is going to offer free TV show downloads online allowing viewers to take more control of their content.  I agree with Fred ,however, that while this is a smart move that this is only half a step since they are limiting the view to 7 days before it self destructs.  More importantly, this makes me think about the free vs. paid discussion and how media companies are increasingly understanding the possibilities and scale that free can provide over paid.  Finally, this move by NBC, I believe, will help open the floodgates for all kinds of video advertising technologies.  In the first iteration of the NBC download service, users will not be able to skip commercials.  My thought here is great, NBC needs to get paid, but they will also have to be innovative and creative and test many different forms of video ads to maximize viewership and revenue.  As we all know, the web is great for targeting and with this move I see a world where one-to-one customized video messages will be delivered directly to the viewer based on location, time of day, content, etc.  Of course, I have to give a shameless plug here for one of the fund’s portfolio companies, Visible World, as this is what it does for video advertisements on broadcast, cable, and web.  Based on our experience to date, better targeting, more relevancy, and customization equals more satisfied viewers and more revenue.  Of course, this is just one example of video advertising that should flourish with free downloads.  I would also love to hear your thoughts about other potential forms of advertising that you believe will be delivered around this content

The post Video advertising just got a big boost appeared first on BeyondVC.

The constant battle between revenue and usability


This post is by Ed Sim from BeyondVC

I am definitely the first one to understand that there is no free lunch on the web.  At the end of the day, someone has to pay for all of the great services and content out there.  To boot, I am a big believer in the ad-driven model of content.  To this point, there is a battle being fought at every web content company on a daily basis between product manangement, engineering, and ad sales.  What is clear on the web is that every little change can make a huge impact in terms of usability, traffic, and revenue.  The more you err on one side vs. the other can help companies make or break their numbers.  It is this battle between usability (simple and clean) vs. revenue (balance between getting what you want vs. being cluttered) that is constantly fought behind the scenes. 

Take Forbes.com as an example.  I have always liked the content but over the last 6 months I have basically stopped going to their site or any link that someone sends me from Forbes.  Why?  I cannot stand the in-your-face advertising and the clutter.  First, it starts with a big-ass splash page before getting you to the site and once there a Forbes.com video clip starts with a pre-roll ad.  Once I click on another page, I am confronted with another video ad that starts right away.  Once again, I like the writers but honestly this site has become too revenue focused and consequently too cluttered.  As a user, I feel like I am spending more time dealing with turning off video and audio ads and skipping splash screens rather than reading content.  I am sure the Forbes.com business folks have done their analysis between lost unique visitors versus more revenue per page, but in the long run striking the right balance between usability and revenue is key.  And as I sit down with my portfolio companies, it is also this balance that we all seek to achieve because we understand that what we may gain in short-term revenue increases may hurt us in the long run if our audience base declines over time.

The post The constant battle between revenue and usability appeared first on BeyondVC.

The constant battle between revenue and usability


This post is by Ed Sim from BeyondVC

I am definitely the first one to understand that there is no free lunch on the web.  At the end of the day, someone has to pay for all of the great services and content out there.  To boot, I am a big believer in the ad-driven model of content.  To this point, there is a battle being fought at every web content company on a daily basis between product manangement, engineering, and ad sales.  What is clear on the web is that every little change can make a huge impact in terms of usability, traffic, and revenue.  The more you err on one side vs. the other can help companies make or break their numbers.  It is this battle between usability (simple and clean) vs. revenue (balance between getting what you want vs. being cluttered) that is constantly fought behind the scenes. 

Take Forbes.com as an example.  I have always liked the content but over the last 6 months I have basically stopped going to their site or any link that someone sends me from Forbes.  Why?  I cannot stand the in-your-face advertising and the clutter.  First, it starts with a big-ass splash page before getting you to the site and once there a Forbes.com video clip starts with a pre-roll ad.  Once I click on another page, I am confronted with another video ad that starts right away.  Once again, I like the writers but honestly this site has become too revenue focused and consequently too cluttered.  As a user, I feel like I am spending more time dealing with turning off video and audio ads and skipping splash screens rather than reading content.  I am sure the Forbes.com business folks have done their analysis between lost unique visitors versus more revenue per page, but in the long run striking the right balance between usability and revenue is key.  And as I sit down with my portfolio companies, it is also this balance that we all seek to achieve because we understand that what we may gain in short-term revenue increases may hurt us in the long run if our audience base declines over time.

The post The constant battle between revenue and usability appeared first on BeyondVC.

The constant battle between revenue and usability

I am definitely the first one to understand that there is no free lunch on the web.  At the end of the day, someone has to pay for all of the great services and content out there.  To boot, I am a big believer in the ad-driven model of content.  To this point, there is a battle being fought at every web content company on a daily basis between product manangement, engineering, and ad sales.  What is clear on the web is that every little change can make a huge impact in terms of usability, traffic, and revenue.  The more you err on one side vs. the other can help companies make or break their numbers.  It is this battle between usability (simple and clean) vs. revenue (balance between getting what you want vs. being cluttered) that is constantly fought behind the scenes. 

Take Forbes.com as an example.  I have always liked the content but over the last 6 months I have basically stopped going to their site or any link that someone sends me from Forbes.  Why?  I cannot stand the in-your-face advertising and the clutter.  First, it starts with a big-ass splash page before getting you to the site and once there a Forbes.com video clip starts with a pre-roll ad.  Once I click on another page, I am confronted with another video ad that starts right away.  Once again, I like the writers but honestly this site has become too revenue focused and consequently too cluttered.  As a user, I feel like I am spending more time dealing with turning off video and audio ads and skipping splash screens rather than reading content.  I am sure the Forbes.com business folks have done their analysis between lost unique visitors versus more revenue per page, but in the long run striking the right balance between usability and revenue is key.  And as I sit down with my portfolio companies, it is also this balance that we all seek to achieve because we understand that what we may gain in short-term revenue increases may hurt us in the long run if our audience base declines over time.

The post The constant battle between revenue and usability appeared first on BeyondVC.