Advertisements

Venture Capital Jobs Blog

Curated by John Gannon and Team

Posts Tagged ‘LinkedIn

Pros and cons of Push and Pull product positioning and differentiation

with 4 comments

In my view, there are two types of product positioning and differentiation: Push and Pull.  Both have benefits and drawbacks.

Push

A Push positioning and differentiation strategy assumes that you understand the market and your customers well enough that you can come up with some positioning that sets you apart from the competition.  You have a vision and hypothesis about why you’re different and better, and you push that message to the masses, without extensive customer validation.

Pros: To develop this kind of positioning, all one has to do is look at the competition’s literature and come up with positioning that seems sufficiently different from the alternatives.  Potentially saves time because it can be done without speaking to customers.  Maybe a good first step in developing a go-to-market strategy.

Cons: The competition may have it all wrong and have no idea about what customers really want, so trying to work around the competition’s messaging may be pointless, since they all have it wrong anyways-and you probably do too since you haven’t spoken to any customers!

Pull

A Pull positioning and differentiation strategy implies that your customers tell you what features, functions, positioning, and messaging that they find most compelling.  You use these “pulled” items as the crux of your messaging and positioning versus a hypothesis about the messaging and positioning that will resonate with a customer.  This is how the Customer Development guys would argue that you should develop your messaging and positioning.

Pros: You’re using positioning and messaging that has been validated by numerous potential customers in your target market.  These are the reasons they see your solution as different…and who are you to argue with the people who have the money?

Cons:  Requires extensive customer interactions to identify the things that customers feel are the differentiated features of your product.  Easier said than done and may require several, iterative cycles of customer interaction.

What are your thoughts on Push vs. Pull?  Are there certain markets or types of products where one strategy is superior to the other?

Reblog this post [with Zemanta]
Advertisements

Written by John Gannon

February 21, 2010 at 2:14 pm

5 ways to recognize a good Startup Salesperson

with one comment

Over the last couple of years as I’ve been deeply involved in startups as an early stage investor and now operator, I’ve noticed that one of the most critical pieces to the puzzle is the 1st salesperson.  Startups in particular require a certain type of salesperson that has a set of key traits, and those traits can be very different than those desirable for salespeople selling into existing markets.

Here are 5 traits that I think are key to identifying good startup salespeople:

  1. Most or all of selling experience is within startups – A salesperson who has had great success for 20 years selling for big, established tech companies is probably not the right person to build your team around.  You need someone who knows how to sell the company vision AND who can close your first couple of deals to early adopters, even though your product is pre-release or newly GA.
  2. Wants a leveraged compensation plan – This person will be comfortable with a lower base as long as they have a package that is heavy on commission and equity.  They are motivated by cash but take the equity portion of the comp package very seriously, because they believe in the product and the company vision.
  3. Doesn’t need a big expense budget – Your startup barely has enough money to pay the employees, let alone pay for a couple of Morton’s steakhouse dinners every week.  Make sure your salesperson isn’t going to need to use expensive activities to generate prospects or sales.
  4. Can sell the product as spec’d – The startup salesperson should be able to find prospects who will buy what the development team has built.  This will be harder than finding prospects who will buy your product if you add a few additional features, but the benefit is that you’re not bloating your feature set and doing custom development to win every deal.   There are many startups that fall into this trap, and its hard to move from here into a repeatable scalable sales model.
  5. Shouldn’t be aVP of Sales’ type –  You will need a VP of Sales if you figure out a scalable, repeatable revenue and sales model and need someone to manage your growing sales team.  Until then, stick to the folks who are hunters, love selling startup company technology, and enjoy having a huge territory in which to sell.
Reblog this post [with Zemanta]

Written by John Gannon

February 17, 2010 at 8:00 pm

Posted in Uncategorized

Tagged with , ,

Shrink Before You Grow and Sales 2.0

with 2 comments

This past Thursday I left the friendly confines of VMTurbo HQ and attended Highland Capital Partners‘ “Sales 2.0” conference in Cambridge, MA.    The conference was dedicated to sharing knowledge about the “low touch” sales model –  a sales model that does not depend on an army of direct sales representatives knocking on customer doors and doing face-to-face meetings.   Unlike the traditional sales model, the “low touch” model relies heavily on taking leads from the web and moving them through a drip marketing funnel, using inside sales teams to close business when the customer is ready to buy.  This model is gaining quite a bit of attention due to the success of companies like Solarwinds and LogMeIn, both of whom have had recent IPOs.

Every presentation and panel at the conference was great, although the most engaging one was from Joe Liemandt, the CEO and founder of Trilogy.  I remembered Trilogy from the late 90’s, when they were running splashy recruiting events at my alma mater.  Over time they have morphed into a holding company that buys struggling software companies for pennies on the dollar, restructures them, and then turns them profitable.  In his talk “Shrink Before You Grow,” Joe made many great observations and suggestions which came from his experience purchasing and restructuring these companies – and advice which I think is also applicable to software startups.

Here are a couple I thought were particularly interesting…

Field direct sales forces selling $100k-ish deals is a money losing proposition: The dirty little secret of enterprise software is that companies who sell with a field salesforce are typically losing money on each deal.  So, when Joe buys a company, he typically fires the entire field salesforce and moves to a low-touch model (inside sales).  He did say that they will retain one field sales team to chase big ($5MM+) deals, since those are deals that can be done profitably via a direct sales force (and would also be impossible to sell without sending someone onsite to meet senior management).

(My takeaway: use senior management as a direct sales team in the event the customer requires high touch in the sales process AND the deal is big enough to warrant that high touch)

Focus on attach rate and install base, not price: When Joe buys a struggling company, he looks at its product line and figures out which products are not seeing good attach rates with the installed base.  Then, he works hard (by listening to the base and by cutting prices) to get that attach rate up.  They also spend a good deal of resources on support, and do some unconventional but very customer friendly things.  For example, one of the companies they purchased was an accounting software company, and as part of the restructuring they hired CPAs for the support group.  When a user called support, they would not only be able to get software help, but could also get accounting help from a CPA!  Talk about a great way to cultivate a strong install base.

(My takeaway: In a low touch model, there is certainly an element of a volume game, where you are trying to fill your funnel with as many leads as possible, qualify them, and then move them through the funnel until they are ready to buy.  However, your existing base is going to be the best place to look for additional revenue opportunities, so make sure you’re not focusing only on building a massive leads database just for the sake of doing so.)

I’m spending alot of time these days analyzing and learning about the low touch sales 2.0 model, so if you have any good pointers or resources, please add them in the comments!

Reblog this post [with Zemanta]

Written by John Gannon

December 6, 2009 at 2:29 pm

My new company – VMTurbo

with one comment

We just launched a very simple website for my new company, VMTurbo.  If you’re interested in VMware, virtualization, or cloud, drop in and register so we can keep you up to date with what we’re doing.

We also just grabbed the VMTurbo twitter account, although we’re not using it yet.  Feel free to follow us and eventually I promise we will be tweeting some good virtualization-related nuggets!

Also, I’ll be at VMworld next week with our cofounders…hope to see some of you there.

Reblog this post [with Zemanta]

Written by John Gannon

August 29, 2009 at 9:01 pm

Posted in Uncategorized

Tagged with , ,

Going away from the ‘dark side’ and into the startup world

with one comment

I recently decided to make a career change and at the end of the month will be leaving the world of venture capital (as some affectionately refer to as ‘The Dark Side’) for the maybe greener and definitely more uncertain pastures of the startup world.  My time at L Capital over the last year has been great, and I’ve learned an incredible amount about startups and investing, but I recently came upon an opportunity which was just too good to pass up.

I’m joining an early stage software company in the virtualization management and automation space and will be involved in all manner of customer development, biz dev, and marketing.  I’m going to work with a great team and a stellar set of investors, all who are laser focused on building a great company.  Needless to say, I am very excited about this move.

I’m not going to post details about the company publicly at this point, but will certainly do so after I have spent some time in the new job.  If you have a strong interest or background in virtualization technology and would like to discuss what we’re working on, feel free to reach out to me directly.

Thanks as always for reading, and although I’m no longer a VC at the end of the month, I hope you still keep reading!

Reblog this post [with Zemanta]

Written by John Gannon

July 15, 2009 at 5:15 pm

Posted in Uncategorized

Tagged with

Vertical integration as a cloud competitive weapon

leave a comment »

The Maxim gun and its successor the Vickers (s...
Image via Wikipedia

When will the cloud providers begin acquiring product companies in order to keep the technology out of the hands of their competition?

Is that a strategy worth pursuing?

Many clouds are using open source technology to power their solutions, but I assume many of them have reliance on commercial products as well.  Could one cloud get an upper hand over the others by bringing a leading edge commercial product in house, integrating it tightly into one’s own cloud, and then end-of-lifeing the commercial version?

If you believe that the winners of the cloud game will be won by those firms with the greatest ability to control and continually shrink OPEX then maybe it is worth for big cloud players to bid against the typical acquirers of typical infrastructure technology (MSFT, Symantec, etc) in order to keep that technology out of the hands of the other clouds.

Are there any commercial products that are so clearly differentiated and powerful that they’d be worth a cloud provider paying up to acquire?

Reblog this post [with Zemanta]

Written by John Gannon

June 26, 2009 at 4:23 pm

Technologies I wish we had in 2001

leave a comment »

Music for 2001: A Space Odyssey album cover
Image via Wikipedia

The best and worst thing about working in the technology industry is that you constantly build custom solutions to problems, sometimes quite expensively, and then years later see the same problems get solved through affordable (or free) off-the-shelf products.

Recently I’ve been thinking about solutions that we could have really used during my stint at FOXSports.com, but didn’t exist at the time (2001-2003).

Amazon Web Services (EC2 and S3): It was exciting to support interactive polls during major FOX broadcasts like Super Bowl and World Series, but a huge challenge for the technology organization, particularly in the areas of capacity planning and scaling.  We literally had our hosting provider bring in additional servers for these events, and then decommission them after the events ended.  If we had EC2 we might have been able to scale more flexibly during these events.  Also, we had loads of static content stored in our Oracle database, and served up by our web servers.  S3 would have allowed us to serve this content more effectively while reducing our reliance on a homegrown caching system.

Cloud integration (a la Boomi, CastIron Systems): As a sports website, we had a whole bunch of data and content feeds that we’d get from third parties.  Each feed was a custom integration using different protocols, authentication methods, and required specialized operations support.   If we had solutions like Boomi or CastIron available to us, we could have saved ourselves and our partners a whole lot of development time, and the end result would have been a more operationally supportable set of systems, with more flexibility to onboard new business partners quickly.

Application caching layer (e.g. memcached): We built our own caching platform within our app so that we wouldn’t hit our Oracle database so often with reads.  The cache logic was built in our app and the storage for the cache was an NFS shared volume sitting on a Netapp NAS device.  If we built the site today, we could have leveraged memached (or one of its commercial derivatives) and saved a bunch of dev, testing and debugging time.

Google Analytics: We spent a ton of money on web analytics solutions back in the day.  Google Analytics would have given us much of the same functionality, for free.  Enough said :)

All of these solutions would have addressed big pain points for our tech team, and consequently for our business as a whole.

Would love to hear any of your war stories related to this topic in the comments.

Reblog this post [with Zemanta]

Written by John Gannon

June 24, 2009 at 11:39 am

The cloud cash cow: planning & implementation services

leave a comment »

Image representing Sun Microsystems as depicte...
Image via CrunchBase

Sun Microsystems (NSDQ: JAVA) has announced the Cloud Strategic Planning Service to provide cloud know-how to companies of various sizes that want to implement a form of cloud computing.

The planning service will be provided through Sun’s consulting arm, Sun Professional Services. It will evaluate a customer for cloud-readiness, determine whether a public or private cloud is appropriate, and identify opportunities in the cloud in terms of the nature of the business, the corporate culture, and the existing IT environment.

via Sun Shows Off Vendor Support For Sun Cloud — Cloud Computing — InformationWeek.

What percentage of enterprise workloads are in the cloud today?  My swag is less than 1%.

Think about why the x86 virtualization services market is so big.  Because you’ve got less than 10% of workloads virtualized.  There are plenty of workloads out there that companies help figuring out where/how/when to virtualize.  We’ll never get to 100% virtualized but even if we hit 20% or 30%, there is still a huge services opportunity.

Going from 1% to even 5% or 10% is meaningful to the whole ecosystem of cloud services vendors, including the professional services guys who are going to help customers make the transition.  Since the cloud professional services ‘experts’ haven’t really been identified yet, I bet we’ll see alot of people hanging the cloud shingle and following the money.

Getting back to the post referenced here, this is an obvious move for Sun, and is bound to put a ton of juice into their services business.  Cloud consulting is going to be very high margin and high volume at the same time.

Buckle up, folks.

Reblog this post [with Zemanta]

Written by John Gannon

June 2, 2009 at 4:02 pm

Posted in Uncategorized

Tagged with , , ,

Say goodbye to bad UI (thanks to the cloud)

leave a comment »

A typical modal dialog box with prominent &quo...
Image via Wikipedia

I don’t think anyone will argue with me that the typical IT management tool user interface (UI) is just plain awful.  There are several reasons for this, but the most obvious one is that an enterprise software product is loaded with hundreds of features, functions, and configurations, all of which need to be accessible to an end user.

As cloud computing aggregates formerly disparate functions and resources into logical groups, it stands to reason that  user interfaces will not need as much complexity as is required today, simply because there is more abstraction of the resources that make up the application (code, servers, network, database, etc).  If there are less things that are user configurable in a software package, you can simply eliminate numerous menu items, configuration toggles, buttons, etc.

It will be hard for the incumbents to change their UI to fit this new model.  Customers who are used to a certain UI from a vendor or product are going to want it to stay the same (or close to the same) since they’re used to how it looks – even if it looks horrible :)

New entrants, however, have a great opportunity to leverage UI and user experience to make their management apps more sticky and to appeal to a broader market.  For example, the Bluebear guys have built a snazzy, intuitive multi-hypervisor virtualization management tool written in Adobe AIR.  If I’m an SMB who is dipping my toe into the waters of virtualization, maybe a tool like this makes it easier for me to get started.   Or take a company like Cloudkick, that is looking to “make the cloud easier to use an accessible to everyone.” That’s a great misson statement, and one that’s certainly achievable given the software development technologies available today.

Maybe (hopefully?) we end up in a world where the idea of sending one’s IT staff to “training” class for several thousand dollars a pop will be a thing of the past.  The IT guys will just be able to sit down and drive whatever software you put in front of them.

The UI will be that good…

Reblog this post [with Zemanta]

Written by John Gannon

May 29, 2009 at 4:49 pm

Cloud app store hype

with 7 comments

iPod 5th Generation white.
Image via Wikipedia

With the rise of virtual appliances as a software delivery and deployment model, people are beginning to talk about the idea of cloud computing app stores (a la iTunes) where admins can find virtual appliances and then easily deploy them onto a cloud or a server in their data center.

Although this idea sounds cool (“Hey, I can search for apps like I’d search for songs on iTunes and then deploy them almost instantly!”), I’m not convinced it is something that is going to create a dramatic market shift within the enterprise.

Why not?

First let’s think about why customers would be inclined to use a virtual appliance or app store:

  • Easily demo software on their own environment or in the cloud:  The virtual appliance model is clearly a great way for an IT guy or developer to test new apps.  You can try before you buy, and you don’t need to requisition any hardware to test.
  • Pay-per-appliance instead of pay-per-physical server: A pay-per-appliance model makes more sense in the virtual world than does the old licensing model of per-CPU or per-server.
  • Choice: App stores are a place where the big vendors’ marketing muscle won’t matter as much.  Customers will be exposed to new vendors and solutions.

And some reasons why customers wouldn’t want to use virtual appliances or app stores:

  • Lack of Control: Larger companies will have strict standards on what kind of applications and OS’s go into their environment.  Typically, they are going to want control of the hardware, the application, and everything in between.  Using a virtual appliance means giving up much of the control enterprise IT is used to having on the entire stack.
  • Good config management and deployment tools beat virtual appliances any day of the week:  The virtual appliance value proposition is eliminated if you’ve got robust config and deployment systems (think Opsware, Puppet, etc) that let you deploy fully customized app stacks (w/custom OS) in minutes.  Why sacrifice the ability to customize when you don’t have to?

Why are the appliances and app stores good for vendors?

  • Lead gen: Download of virtual appliance = sales lead for appliance vendor
  • Makes software pre-sales process easier: Instead of putting a sales engineer onsite for a couple days to help setup a customer demo, give the customer a virtual appliance that they can get up and running in an hour or less.
  • Best practices:  The vendor can ensure the configuration of the appliance conforms with best practices.  This will prevent some folks from shooting themselves in the foot by not selecting manufacturer suggested default settings. (Although certainly the ‘suggested’ settings are a really bad idea for certain use cases – a longer story which I won’t dig into here)
  • Makes cloud more useful:  Helps cloud customers deploy apps faster.
  • Long tail:  Exposes lesser known or upcoming vendors to IT buyers.

Seems to me like virtual appliances are a great sales/marketing tool for vendors large and small, but not something that will fundamentally change how enterprise IT is delivered.  SMBs on the other hand…maybe there is a play there.

Thoughts?

Reblog this post [with Zemanta]

Written by John Gannon

May 21, 2009 at 11:08 am

%d bloggers like this: