Over at The CIO Weblog, I pointed out a review by InfoWorld of four hosted, customer relationship management (CRM) solutions. Now in many cases information technology (IT) initiatives are thought of as corporate-wide programs, and thus, solutions like these are not in the perview of those within a division of a company launching either a new product, new services offering, or backoffice services operation. It is often presumed that if a new business initiative is successful that the processes of the new program will utilize the legacy platform as its core. In many cases, this will be true and one will not want to introduce another system (because of side effects like having multiple processes in place or having exception processing).
Consider, however, that pilots and new business initiatives can move at breathtaking paces and that hosted applications and application service provider (ASP) software can be introduced sometimes instantly or within a few days. Some can also be reconfigured on the fly when flows need to be optimized. Then consider a perspective that people and processes need to be serviced first (even if it means reverting to paper and pencil or Excel spreadsheets and throwing out the IT to get the job done). Then consider whether hosted software might be a good way to get your pilot done. With the monthly subscription plans of many providers, there is often little financial risk.
Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com
By way of Jeff Nolan ... one of the best profile articles I have seen on the Net on the small, but distinguished population of venture capital bloggers. Covered in the Venture Capital Journal.
To digress a bit, as a freelance management consultant (and not a VC), I resonate with some things here with respect to business blogging (as opposed to personal blogging): 1) blogging helps me to keep track of non-confidential information that I want to keep track of in a richer format that is better than bookmarks, spiral notebooks, etc., and 2) blogging forces me to actively process information and thus serve a goal of continuous learning. The publishing aspect of blogging is good too in that it is an efficient means to deliver and synthesize information in new ways. Good for low-level, bootstrap marketing (or at least branding if you take a stricter definition that marketing is about lead generation).
Some of my original goals for blogging were to learn more about the format, its use as an informal communication channel, impacts on search engine cataloging, and use as an online networking tool. For the most part these goals have been satisfied.
Unlike some of the VCs in the article, I have not yet experienced any impact on deal flow from maintaining a blog. My product offering is different though, and my audience is different too.
In any case, this circles back to my addition of blogging more about technology in 2005. It serves a goal of continuous learning. It makes no presumptions that efforts will lead to deal flow. Based on reader feedback, however, thoughtful and professional blogging does help me to preserve the brand of my reputation. Reputation and integrity are most important to me.
Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com
This was brought to my attention via the blog "A VC". Although words can describe it somewhat, you've got to try it. You can basically search by band, musician, or album and pull up a visual map of music that sounds similar and/or may match your tastes. Includes links to Amazon.com for purchasing. Given music is one of the huge topics on mainstream, personal blogs, I wouldn't be surprised if we start seeing this kind of music search engine and advertising technology applied to contextual marketing and widgets on the Internet.
Big blog news of the day. Six Apart, provider of the MovableType blog platform, will acquire LiveJournal, the largest open-source blog platform provider. If this goes through, Six Apart will be one of the largest providers in the world.
I guess I will have to update my mental map of the space given this big M&A news in the blog community.
Scott McMullan has a cool vision for event and calendar management. From his post:
In the spirit of "tags are the new black," here's a vision for how event and calendar management should be handled by 2006: Wouldn't it be grand if all events in the world, from a garage sale in Lexington to a tech conference in SF, could be automatically discovered (Google), stored in one central, public domain, web services accessible database (Internet Archive), where the events could then be categorized (Topix), community rated and recommended (Amazon/Netflix/Last.FM), personally tagged (Flickr/del.icio.us), and ultimately custom-fed (PubSub) directly to your calendar device of choice (Calconnect)?
A little tongue in cheek I guess. A post by Brad Feld (VC at Mobius) followed by a post by Jeff Nolan (VC at SAP Ventures) triggered me to write this post about term sheets. Having worked mostly on the operating company (seller) side of things, I thought it would be interesting to note a few perspectives on terms and negotiating from a side other than the VC side of the table. Here are a few thoughts:
1) Valuing an "investment" depends somewhat on the other things in your "portfolio". An investment (whether taking money or giving money) cannot be looked at in isolation of what else you hold. As an example, home owner's insurance is worthless to someone who does not also have a home. The insurance is a hedge investment that goes up when you lose the home though. Now for the entrepreneur, the value a VC brings (e.g., complementary connections, partners, or expertise) to the table should also be factored in beyond price they value your company at. Look at what assets you have (e.g., current people on your team pre-funding). I recall (hopefully correctly) that Mena Trott (at Six Apart) blogged about how Sequoia Capital's money was the "best" even though it was not necessarily best from a pre-money valuation perspective. Now some will say there is an age old saying that "Money talks, _____ walks" (ask mom or dad about this one if you don't know what I'm referring to). Nevertheless, go through the thought process of not just looking at price.
2) Consider using lawyers as a part of good cop/bad cop tactics during negotiations. I've worked with counsel from firms like Piper Rudnick, Greenberg Traurig, Jenkins & Gilchrist, and others - lawyers are smart. Though they can be expensive and extent of use should be weighed by stage of investment and company specifics (vs. using a company godfather, experienced friends, or management's own experience, say), lawyers can help you effectively wade through mechanics of term sheets, stock purchase agreements, amendments to articles, investors rights, etc. Sometimes you can get the lawyers to draft bad cop memos (or play bad cop roles) for you to respond to VCs on legal docs while you stategize, value the terms from your perspective, and play good cop.
3) Be able to "name the game". A key to negotiating is being able to understand the game being played. Playing some games require greater understanding of mechanics. The term sheet and the subsequent legal docs (if a term sheet is executed) are areas where mechanics can be hairy than the "average bear". Unfortunately, entrepreneurs tend not to negotiate legal docs every day. Lawyers and VCs, on the other hand, do. Plus, market terms change over time (even within a period of a few months). In any case, utilize the Internet, books, and informal networks to gather as much baseline info as you can. Brad Feld looks like he has some good upcoming posts on the subject of term sheets.
As a closing thought, to start to get familiar with the general idea of term sheets, the AllBusiness website has a vanilla short form agreement and long form agreement on the web (not the only source and not necessarily the best source but instantly accessible and another data point for you).
Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com
I was reviewing 3Q'04 Texas venture capital financings in the software space and ran across an Austin-based company called Pluck, a company dedicated to making it easier to find and manage information online. Founded in 2003, Pluck received a recent Series B round of $8.5 million. Investors to-date are well-known VC firms: Austin Ventures and Mayfield.
Pluck markets itself as follows:
"What TiVo did for television, Pluck is doing for the web. Pluck is an Internet command center that takes the web to a whole new level.
No matter how you use the web today, you can do it better with Pluck. Searching? Better. Shopping? Better. Browsing? Better. News? Way better.
Seamlessly integrated with Internet Explorer, Pluck retrieves, organizes, and automatically delivers your favorite web stuff in a single-view. Pluck lets you browse multiple sites at once, share stories and folders with anyone, and it even finds things when you are not online. Pluck also organizes and stores all your Web information so you can access it from anywhere."
Given that 1) further advances of Internet Explorer have seemingly stopped, 2) the Firefox browser is making advances both in reality and in mindshare regarding both security and new features, 3) Pluck's product seems to be offered only on the IE platform to date, and 4) there may only be tens of thousands of users (before opening, note PDF file) right now, it will be interesting to see what plays out product development-wise over the next year. I like Pluck's concept of better organization. Too bad IE advances have for all purposes ceased - I have already said goodbye to IE and hello to Firefox.
For those still using IE, the Pluck software is currently *free*. Go ahead and download it.
Note to self: Revisit Pluck progress over the next 12 to 18 months as it uses Series B monies.
Steve Shu
Managing Director
S4 Management Group
Email: sshu@s4management.com
Web: http://www.s4management.com
Despite CAN-SPAM legislation, I sure got more email spam in 2004 than any other year in my life. Spam got so bad that even some of my spam filters broke.
Still having trouble thinking of a gift for the holidays? Yesterday the Christian Science Monitor interviewed my wife (Dr. Suzanne Shu) about the growth of gift certificate purchases. One would think that since gift certificates aren't fungible like dollars that there would be no rationale for their existence (applying pure economics theory). The positives for purchasing gift certificates are clearly there ... including glamour and providing the recipient a way to circumvent guilt of buying things. Make sure you read the fine print associated with gift certificates though. I'm still sore about the Chili's card mentioned in this article.
The world is not safe enough. No longer does Frosty the Snowman have simple issues like evading greedy magicians after his magical hat. In today's scary world of malware, spyware, worms, phishing, and Trojan horse attacks to steal people's login information to online banking ... well Frosty has new issues to deal with. John Heltzel sent to me the following e-Holiday card, brought to us by Entrust, a security software provider.
Just more than a year ago (October 2003), Jeffrey Henning (COO and CTO, Perseus Development Corp.) wrote the influential article on "The Blogging Iceberg".
While researching information on Internet traffic patterns, I ran across the following research by Dr. Alaina Kanfer, National Center for Supercomputing Applications (NCSA), University of Illinois at Urbana-Champaign: "It's A Thin World: The Association Between Email Use and Patterns of Communication and Relationships". The survey and research included 424 community leaders whose communication patterns were tracked over a week each.
