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Archive for March 2009

Get on the horn (using the phone for market research)

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Google, Inc.
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Doing market research is a common task for both VCs and entrepreneurs, and often it’s fairly challenging.  There are dribs and drabs of data available via Google, Twitter, analyst firm press releases, government data, and the list goes on…

One can certainly go online and search Twitter or Google for market research statistics, but sometimes your best bet may be to go the Luddite route and just pick up the phone!

For example, trade associations are usually very keen to share membership data, and often will have an idea of the size of their market.  Don’t be afraid to give them a call, almost always the person on the other end of the line will be willing to help you.

You’ll probably save some time (and potentially a few dollars) in the process.

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Written by John Gannon

March 30, 2009 at 8:42 pm

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Advertising that grabs you…

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Saw this flyer while walking the dog yesterday.  I’m not condoning violence but I have to admit that this grabbed my attention (although thankfully not by the throat…)

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Written by John Gannon

March 29, 2009 at 2:00 pm

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Any interest in an eBook on “How to get a job in venture capital” ?

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I’ve been toying with the idea of writing a short (< 50 page) e-Book about how to get a job in venture capital.  All proceeds from the eBook would go to charity.  To gauge interest, I’ve created a couple of polls.  I would appreciate your input if you’re someone who has interest in venture capital careers.  I’ll share the results in a couple of weeks once there are a good number of responses.

Thanks for your help!

Written by John Gannon

March 25, 2009 at 10:00 pm

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Three tips for building successful channel programs

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Venture-backed companies often leverage distribution and VAR channels to ensure that their product is available to a wide variety of potential customers.  Companies with a well-functioning channel program can increase revenues without a proportional increase in costs.  Investors like to see this kind of scalability develop in companies they’ve backed, or believe that this scalability can be achieved at some point in the future.

If you are thinking about taking your product or service to market through the channel, here are some things to consider:

If you can’t sell the product, the channel won’t be able to sell it, either.

Just as you probably shouldn’t hire any sales and marketing employees until you have come up with a product that you (the founding team) can successfully sell, trying to establish a channel before you have developed some market traction on your own is a moot point.  After all, why would a potential partner want to spend time and effort on pushing a product that no one has shown interest in purchasing?

Potential partners are going to want to see market interest in your products (as evidenced by sales or PR) before signing up to work with you.

Enable and support your channels.

A sure path to failure for any moderately complex technology product is to sign up channel partners to resell and/or support the product without educating them on the sales and support of the product!

It seems obvious when you see it in print, but in my experience this is one of the big ‘gotcha’ areas when developing and supporting channel programs.

Lack of education will result in unhappy customers and often a perception that your product is flawed in some way (even though it might not be).   Take the time to educate the channel and you’ll see much better results.

Avoid channel conflict.

Companies who have a direct sales force as well as a channel program need to be careful not to alienate channel partners by competing for the same customers.  Make sure your salespeople are incentivized not to compete with your channel partners.  Again, this probably sounds obvious but you’d be surprised how often it happens.

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Written by John Gannon

March 24, 2009 at 5:39 pm

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Robin Harris of StorageMojo his the nail on the head re: Cisco

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Cisco Systems, Inc.
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If IBM, HP and Sun aren’t meeting today to plot a radical, Cisco margin destroying open-source router & low-cost switch counterattack – like Seagate, HP and IBM performed on Quantum’s DLT – they’re idiots.

– via Cisco’s unified computing system (StorageMojo.com)

As I said in a previous post, I think Cisco’s recent moves are going to be great for guys like XORP and Vyatta.

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Written by John Gannon

March 20, 2009 at 2:46 pm

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Feld Thoughts spurring my thoughts on cloud computing

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feld-sense
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Brad Feld made a couple of great posts over the last week talking about some of the challenges with cloud computing around the coordination of infrastructure level services in complex cloud environments.  Namely, that most cloud computing (hosting) providers have APIs for primitive functions like creating and starting/stopping instances, but lack coordination or error handling functionality at a granular (operating system) level.

These posts struck a chord with me thinking back to my days as a UNIX systems administrator working for a F100 financial services company.  We ran a three-tier architecture with a large number of web servers, application servers, and a pair of beefy database boxes at the bottom of the stack.  Whenever we needed to reset the environment, we had to go through a very specific process to get things online again.

Here’s what a reset looked like:

  • Restart database servers, make sure they were working
  • Restart application servers, make sure they are talking to the database
  • Restart webservers, make sure plugins are talking to the app servers
  • Flush load balancers and firewalls

This whole process would take about 15 minutes, very manual, and thus was quite error prone.   For example, if you started the app servers before the database servers – oops, do not pass go, do not collect $200.

Although that example was from a traditional hosting environment in 2000, I imagine there will be similar problems for medium/high complexity cloud hosted applications.

Vendors like VMware have tried to address this kind of issue by providing a workflow engine that can be used to automate sophisticated processes within the infrastructure, and I know RightScale has the RightScripts framework as well, but there is still a major gap.

These systems presuppose that a developer is going to know and care that there are lower level dependencies beyond the APIs with which they interact with the cloud environment.

The beauty of the cloud is that the developers shouldn’t need to know or care about which server starts before which other server, or that sshd needs to start on box A before box B can run a batch job.

But as Brad implies in his post, I think we’ve got a long way to go…

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Written by John Gannon

March 18, 2009 at 4:44 pm

Are Cloud Based Memory Architectures the Next Big Thing? | High Scalability

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DEC (Digital Equipment Corporation) VAX ECC me...
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I’ve probably said this before, but the cloud is a new computing platform that some have learned to exploit, others are scrambling to master, but most people will see as nothing but a minor variation on what they’re already doing. This is not new. When time sharing as invented, the batch guys considered it as remote job entry, just a variation on batch. When departmental computing came along (VAXes, et al), the timesharing guys considered it nothing but timesharing on a smaller scale. When PCs and client/server computing came along, the departmental computing guys (i.e. DEC), considered PCs to be a special case of smart terminals. And when the Internet blew into town, the client server guys considered it as nothing more than a global scale LAN. So the batchguys are dead, the timesharing guys are dead, the departmental computing guys are dead, and the client server guys are dead. Notice a pattern?

via Are Cloud Based Memory Architectures the Next Big Thing? | High Scalability.

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Written by John Gannon

March 17, 2009 at 2:33 pm

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Systems management or cloud management?

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Clouds in Calgary, Canada
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With the cloud computing market growing so rapidly there has been a rise of cloud computing management vendors like RightScale, Enomaly, Scalr, Elastra, and others.  These companies have developed solutions that work very well for the early adopters in the cloud computing market, but I wonder if these tools are getting an equally warm reception from the enterprise.  After all, most medium to large IT shops use systems management suites like Opsware, Tivoli, etc and don’t have expertise in this new breed of tools.  Not to mention, most decent sized IT shops don’t want yet another management tool because they probably already have three too many!

In the long run, I believe we are going to see hybrid datacenters where enterprise customers are able to run workloads simultaneously in local and cloud datacenters and manage them in a seamless way.  The question is: How will these hybrid datacenters be managed?

I think there are three possible outcomes:

  1. Systems management vendors add cloud functionality to existing tools: Opsware, BMC, and the rest of the usual systems management suspects will make their products cloud-aware  just as they have made them virtualization-aware.
  2. Cloud management vendors add traditional systems management functionality to their toolkit: This would be a very tough nut to crack, but the emerging cloud vendors could take a stab at developing more traditional IT management functionality, allowing them to handle management of both traditional and cloud hosted datacenters.
  3. Proxy or Glueware:  Startups build tools that allow both the cloud management vendors and the systems management vendors to interact with non-native environments.  In effect, they glue together these two separate worlds.  These glueware startups would almost act as proxies, allowing say a systems management tool to manage cloud hosts in a seamless way and with minimal retraining of staff required, while letting a cloud management tool manage legacy IT infrastructure.

I think we’ve seen #1 come to pass in the virtualization market to date, but in the cloud management space I think #3 is a more likely outcome.  There would be major rearchitecture required of most enterprise IT management products to support a hybrid datacenter configuration and so some sort of proxy or glueware would enable much faster/easier integration.

Your thoughts?

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Written by John Gannon

March 13, 2009 at 5:17 pm

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Debt paydowns versus equity repurchases

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Image representing Seeking Alpha as depicted i...
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Been reading a bunch of earnings calls this morning, found this bit interesting about debt vs equity repurchases…check out the link below to get the full context:

Courtesy of Andrew Watts – Oaktree Capital on the ADCT F1Q09 earnings call

If you’d bought back bonds, your tangible book would be over $5 right now and instead it’s at $2.70, which is where the stock is trading. So I think the shareholders should be really more cognizant of that kind of situation. And you guys are certainly not alone, but this repurchase of equity has just been a horrible, horrible plague on our markets speaking from my perspective. I think its something people really need to start to – it’s an Emperor has no clothes situation to me. I think people really need to start to look at that.

But I would really encourage you revisit the whole concept of equity repurchases, particularly at significant premiums to tangible book. They’ve just been huge wealth destroyers and, if you have the opportunity on the debt side, you can really create a lot of value there.

via ADC Telecommunications, Inc. F1Q09 (Qtr End 1/30/09) Earnings Call Transcript — Seeking Alpha.

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Written by John Gannon

March 12, 2009 at 11:19 am

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Firefox add-on overload

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Mozilla Firefox
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Firefox generally runs pretty well for me, but a week ago, I started having problems.  Google Reader was behaving weirdly and was basically unusable, and any use of GMail would make my Mac become slow (CPU would get pegged).

My suspicion (which was confirmed) was that one of the many Firefox add-ons I had installed was causing the problem.  At the time, I had installed:

It turns out that Zemanta had a bug that was affecting GMail users and Mashlogic had a bug that caused the problem with Google Reader.  Both companies were very responsive to my bug report (and in both cases had already started looking at the issue due to other user complaints) but during the process, I ended up doing quite a bit of debugging: installing this plugin, uninstalling this one, disabling, re-enabling, etc.

I didn’t mind all of this work that much because I do get a good deal of value out of both of the add-ons that were causing the problem.  But, I was thinking about how I would react if I were a non-technical user.  My guess is that I would just give up on Firefox and use IE again (or Safari on the Mac) instead.

Another topic that came to mind was the idea of add-on interoperability.  Thankfully Zemanta and Mashlogic were not conflicting with one another, but originally I thought they might have been.  Given that many  add-ons these days are altering how pages are rendered, it would seem there is certainly an opportunity for weird interoperability issues to crop up.  One thing that was quite interesting related to Zemanta was that the bug fix was on the server side.  I did have to clear my cache and restart Firefox to fix the problem once Zemanta fixed it on their end, but I didn’t need to download a new version of the plugin (thanks Andraz!)

Are there any standards coming from the Firefox add-on community that will help to address some of the issues I outlined above?

I think the add-on ecosystem is awesome but feel like some of this stuff is what could prevent more mainstream adoption and acceptance, which is what I imagine most of the companies in the add-on space would want.

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Written by John Gannon

March 11, 2009 at 6:07 pm

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