Winter is Coming

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I opened this blog with an homage to George Constanza in my Summer of Nick.

Well, now my respite is over and I’m back to work.  I guess Winter is Coming.  Hopefully I’ll be Tyrion Lannister, not Ned Stark.

Don’t Let VCs (Or Anyone) Define Greatness For You

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“A great man is always willing to be little.”

- Ralph Waldo Emerson

If you unquestionably know what you want to do with your life, stop reading this post.

If you’re still here and you’re like me, you struggle constantly with purpose and meaning.  And when pressed for a goal, many of us fumble through a sentence typically involving the word “great” in some capacity.

Former Benchmark partner and current WealthFront CEO Andy Rachleff has taken a stab at defining Silicon Valley greatness in PandoDaily editorial post:

“Entrepreneurs’ abilities, like those of people in most every profession, follow a bell curve distribution. The vast majority are mediocre, a small percentage are terrible, and a small percentage are truly great.”

“Most great entrepreneurs have a burning desire to build a great company. They instinctively know they need great people to help them achieve their goal, and the only way to attract those helpers is by building a great company, with all that entails. Creating a culture that makes it fun to come to work plays a very important role.”

Hard to argue with it, right?  I mean obviously “greatness” couldn’t be something that goes to more than a “small percentage” of people – otherwise it wouldn’t be relatively great.  And company-building and changing the world (which he talks about in the article) are the Valley’s equivalent of motherhood and apple pie.

So why did this post bug me so much?

Venture Greatness

As many have written, venture capital firms, especially those with large funds, depend on a very small number of huge (multi-billion dollar) exits for their economics to work out.  And the more successful the General Partners in a fund get, the higher the bar moves.

As such, Andy’s definition of greatness involves being willing to wait for a “really big outcome” and not settling for a $50 mm sale because “it doesn’t change society by building a great company or changing the world.”

He says he’s met a “few dozen great ones” in his long and very successful career.

Again, nothing controversial about and of that.  In fact, he articulates well how the VC industry thinks about greatness.

Except that it’s just one definition.

Washington D.C. “Greatness”

Washington, D.C. is clearly a city where people strive for success (I’m sure you’re thinking of a joke about Congress here).  Cynicism about politics aside, hundreds of thousands of people in Washington work hard every day across the Executive Branch, Congress, the Judicial Branch and the countless federal departments, to help our country.  Young people aspire to make an impact and experienced Washingtonians hope to create a legacy.

So have there only been a “few dozen great ones” in D.C. in the past thirty years?  If so, you’d probably have to only consider presidents, Supreme Court justices and some senior congressmen and women.  Does that mean heads of the CIA who stopped terrorist attacks weren’t “great”?  How about a Surgeon General who made a huge impact on a social health issue like smoking?  Or a congresswoman who was the deciding vote in a key piece of legislation?

Is there really just one small list of truly great people in Washington?  And who gets to decide?

Hollywood “Greatness”

Hollywood is another very competitive ecosystem.

Obviously we have public recognitions for Hollywood greatness like the Academy Award.  Again, putting aside skepticism on Oscar voting, according to Wikipedia, there are currently 24 active Academy Awards.  Assuming some flux (awards added/removed, multiple awardees per award, multiple awards per awardee), that means 24 * 30 or 720 or so awardees in the past 30 years.

Maybe some awards are more important than others.  And some awardees are just legendary (Spielberg, Hanks, Deniro, Pacino, etc.)  But where do you put the Cohen Brothers?  Chevy Chase?  Christopher Nolan?  Leonardo Dicaprio?  Robert Duvall?  I bet if you think hard, you could come up with a hundred people in Hollywood that you’d consider “great” in some way in the last three decades.  And I bet each of our lists would vary.

Silicon Valley “Greatness”

If greatness in Silicon Valley is defined by a few dozen companies with big outcomes and that didn’t sell out early, as Andy suggests, where does that leave:

  • VMware: VMware is easily one of the most important startups in enterprise IT in the past thirty years.  It transformed the way companies manage infrastructure and enabled new business models that were never before possible.  VMware has become the modern operating system for the data center.  VMware invented the hypervisor that became the key enabling technology for cloud computing.  Yet VMware sold out way early (for $625 MM to EMC in 2004).  The current market cap for VMware (which EMC subsequently spun out) is nearly $40 billion.  Was VMware great?
  • Crescendo: In 1993, Cisco bought Crescendo for about $90 MM.  That eventually turned into the multi-billion dollar Catalyst product line at Cisco.  A huge number of the Internet packets that you’ve ever sent or received to browse the web or use applications at some point went through a Catalyst switch.  Was Crescendo great?
  • Paypal: Love them or hate them, Paypal is the current payment infrastructure for the Internet.  And it makes a ton of money for eBay.  And because of that, many people think Paypal sold too early.  Were they great?
  • Digg: Let’s get more controversial.  When it was on the cover of Business Week, many thought Digg was great.  Now many would be eager to declare it a failure.  Founder Kevin Rose has talked about it.  Many were eager to analyze with 20/20 hindsight.  Yet some employees loved the experience.    And GigaOm head Om Malik passionately articulated how Digg made a huge impact to media and, in a small way, changed the world.  Was Digg great?

If we thought hard, we could come up with dozen’s of mind-twisting examples.  And more importantly, each of us would have companies – that we worked at, worked with or bought from – that were great for us – even if no one else remembers them.

Your Greatness

Striving to create a great company and change the world is awesome.

But my point is that defining greatness across a large number of people in the abstract is tough.  While venture capitalists are sometimes very intelligent, experienced and important in the Silicon Valley ecosystem, that doesn’t mean their definition of greatness is the only one.  And it doesn’t mean their list of a few dozen “great” entrepreneurs are the only ones that were great to anyone.

At the end of the day, greatness is a personal concept and I think much of the frustration in life is when we chase others’ definition of success versus creating our own.

Maybe this is just a letter I’m writing to myself.

In closing, Percy Shelley in Ozymandias said it better than I ever could:

“I met a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed:
And on the pedestal these words appear:
“My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!”
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away.”

I’m Too Sexy For This (Enterprise) Startup*

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Everyone is talking about the enterprise being “sexy” “again.”  VCs are urging entrepreneurs into enterprise battle.  Quora-ians are trying to figure out how to get more people into enterprise startups.  People are actually describing entire data centers (usually unmarked white concrete buildings) as sexy.  Kevin Rose digs it.  Apparently there is even a beauty contest for “sexiest enterprise startup.”  Heck – while everyone else has a man or woman-crush on Jack Dorsey, Jack’s now in love with enterprise file sharing startup Box’s CEO Aaron Levie:

My reaction: WTF (as in World Trade Foundation).  Is everyone crazy?  Sexy?  Are you serious?

Sure, technically there have been 56 IPOs with more than $1 billion in value in the last 10 years, includingWorkdayService NowSplunkJive and Palo Alto Networks.  And pundits claim there is a strong pipeline of upcoming enterprise public offerings like Box, Marketo, Zuora and others.  And maybe there are a few hundred billion dollars or something of revenue at old incumbents waiting to be disrupted.

But like a club party that’s gone on too long in the dark, let’s turn the lights on and see if enterprise still looks so hot:

Development

Palo Alto Networks founder Nir Zuk, recently remarked at TechCrunch Disrupt:

I say, the opposite.  Solving hard technical problems, creating important value for customers, leveraging new computer science algorithms – anyone can do that.  Deciding whether to use a Lyft or SideCar ride share to get to work, finding the best place to sit at The Creamery to hear M&A rumors, figuring out how to transform yourself from a programmer to a brogrammer – these things test what you’re truly made of.

How do enterprise entrepreneurs even sleep at night?  I mean I know they probably sleep on mattresses filled with $1000 bills.  But isn’t that uncomfortable?

Customers

Enterprise companies are really struggling.  While Instagram is putting up 100 MM customers on the board, the supposed success story Salesforce.com only had a piddly 90,000 at their most recent conference.  Even the iPhone Vuvuzuela app has more users than that – I think.

Enterprise companies will tell you their customers actually pay them – a lot, but that’s no excuse.

And these sucker companies actually have to talk to their customers.  They travel on planes.  They eat at airport Applebees.  They go to places like Pittsburgh, PA.  Or even San Jose.  Some of these places don’t even have Uber, if you can believe it.  And no, TaskRabbit won’t meet your customers for you… yet (business opportunity!).

Sales People

Consumer startups are often smart enough to avoid hiring sales people altogether – or at least they banish them to some godforsaken place like New York City.  In enterprise startups, the sales people are everywhere.  They’re on the phone.  They’re in your inbox.  They’re even under your desk – watching your every move.

Metrics

Ask an enterprise entrepreneur what her DAUs or MAUs are and you’ll get a blank stare.  She’ll confuse you with “vanity metrics” like “revenue” and “profit” and throw made up acronyms at you like “EBITDA” to hide the real truth – that the business is a house of cards with nothing keeping it up except amazing financial performance.

Exits

Start a consumer tech company and you can have so many exits.  You can pivot.  You can have a soft landing.  Of course you can be acqui-hired.  Heck – I’m pretty sure we’ll see an acqui-contractor-ed or acqui-unpaid-intern-ed exit before the end of the year.  The possibilities are endless.  And if you don’t like the exits in front of you, simply run your startup from Hawaii.

Enterprise exits?  They literally haven’t innovated in years – still stuck with tired, huge acquisitions and aforementioned cliched IPOs.  Out of ideas, enterprise guys and gals?  Too busy counting your billions to get creative?

Movies, Tigers and Islands

Consumer startups have Oscar-winning movies made about them, Bravo reality TV shows profiling them and caged-tiger-parties celebrating them.

Enterprise startups?  They’re so lame that most enterprise entrepreneurs cry alone on their own islands.

Longing For the Days

Let’s turn back the clock – back to a stronger, smarter startup world before all of this madness.  Where $3.4 billion enterprise acquisitions are rightfully written off as “boring.”  Where famous bloggers call out enterprise startups for being the snooze-fest / goldmines that they are.  Where Michael Arrington yawns at all of this uncool stuff.  Wait, that last one was just a few months ago.  Thank goodness for Arrington – keeping it real.

Wake up, enterprise.  Until you have your own Gangnam Style video, you’re sexy-dead to me.  At least Box’s Aaron Levie got the message.

* Actually I used to be too sexy for enterprise.  Now I’m just sexy enough, which is to say, not at all.

IT Departments Need To Get Lean

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“Creepy Hitchhiker: You heard of this thing, the 8-Minute Abs? 
Ted: Yeah, sure, 8-Minute Abs. Yeah, the exercise video. 
Creepy Hitchhiker: Yeah, this is going to blow that right out of the water. Listen to this: 7… Minute… Abs.”

Something About Mary

Let’s do some word association.  If I say “lean,” what do you think of?  How many guesses until you say “my IT department?”  I’m assuming we would be here a while.

In case you have lived under a rock the last few years, Lean Startup is a new approach to building and launching products and services, originally created by Eric Ries.  Eric borrowed concepts from the “lean manufacturing” approach created decades ago and tried to generalize them to all types of innovation.  And Lean Startup is truly a movement, with a packed audience of in-person attendees at Ries’ San Francisco conference this week and simulcasts of the event held around the world.

And while people have talked about applying the principles of lean manufacturing to IT for some time, look around your typical IT department and tell me if you see lean in practice.  Indeed, I remember visiting a Fortune 500 IT department a few years ago on one of my many redeye-bleary customer visits and asking them about the rollout of a new project they were working on (unrelated to my company).  The quote that struck me was:

“The product is great.  It’s achieved all of it’s goals.  The only drawback has been user adoption.”

How can an IT rollout (which is presumably for the users), be successful without the minor issue of “user adoption”?

IT teams need to lean (no pun intended) on the following concepts from Lean Startup to get relevant:

  1. Define the goal.  Eric Ries nicely articulates the goal of a startup: “The goal of a startup is to figure out the right thing to build-the thing customers want and will pay for-as quickly as possible.”  What is the goal of IT?  Many IT teams have vague slogans like “align with the business” or “add value to the business.”  Often missing is the focus on speed, value and users.  IT departments need to rewrite their mission statements for the modern world.
  2. Introduced validated learning.  A big theme amongst Lean Startup advocates is the idea that learning, in the short-term, is more important than tactical results.  In this spirit, how often are IT teams using projects as an opportunity to learn about their users versus just “getting the project done”?  IT leaders need to move beyond only bringing up project plans and delivery dates with their teams and toward a celebration of continuous learning.
  3. Develop innovation accounting.  Ries also coined the term innovation accounting, which entails a relentless focus on metrics to capture where a project is today, what the ideal state is and how to measure progress toward the ideal.  Lean Startup encourages folks to shy away from “vanity metrics” like “total users” and instead target the underlying variables that drive success (e.g., engagement of a cohort of users).  IT project teams need to understand the core drivers for success of their project (e.g., # of times a users logs into an app per week, # days before a user gets productive with an app), quantify the goals for those drivers and then develop systems to measure the numbers.
  4. Create an MVP.  Lean Startup advocates have figured out that they can learn a lot and eliminate a great deal of wasted time by first understanding the most important question in the hypothesis of success around their project and then designing a very simple experiment, called a Minimal Viable Product (MVP) to test that hypothesis.  The experiment could be a stripped down product but it could even be a sample email invite or a UI mockup.  The idea is to de-risk the project upfront by getting as much input into the hypothesis as possible at the beginning.  For IT, this might mean testing registration pages or email invites for new applications before even building the applications – to determine if, when they finally build the app, anyone will care.
  5. Don’t be afraid to pivot.  Too many IT projects go on like ghost trains, with no one driving them and even fewer people using them.  The project ends up showing up as “complete” on a status report but in hindsight, it turns out the whole concept was ill-fated.  Rather than managing projects end-to-end, IT teams need to use MVPs, rapid iteration and innovation accounting to determine when it’s time to “pivot” and change course on a project that’s going down the wrong path.

The truth is that Lean Startup is happening in IT – it’s just happening by the users.  As they bring their own devices and applications, users are voting with their feet and showing that if IT doesn’t get more lean and responsive, they will cut them out of the picture altogether.  And yet there is a big role for IT to align projects with the overall company strategy – if they can evolve the way they execute.  Better start doing some crunches!

10 Insights from AWS re: Invent

 
In Austin Powers, one of my favorite all-time scenes is where one of the evil henchman sees Austin in a steamroller coming toward him very slowly and yet still can’t get out of the way to avoid being… steamrolled.
Amazon, in general, and specifically in their Amazon Web Services (AWS) cloud strategy, is the steamroller inching toward paralyzed IT incumbent vendors.   And Jeff Bezos, Fortune’s businessperson of the year, is driving the truck.
The AWS team kept moving the truck forward at their first user conference, re: Invent, this week in Las Vegas.   Here are some quick thoughts from what I saw:
  1. Amazon is debunking the Innovator’s Dilemma.  Clayton Christensen’s famous book talks about the repeated pattern of big companies ignoring new, less profitable markets to instead focus on existing, high margin markets.  As such, they miss out on new markets and eventually get disrupted by… innovators.  Well, Jeff Bezos and his team seem to have something to say about that.  First of all, one of their core mantras that they repeated constantly throughout the show is that they are focused on low margins.  Most vendors in technology have no idea how to make money with low margins, hence this is a huge differentiator.  As such, Amazon has been able to enter new markets like cloud computing that scared away the big incumbents.  And their fearlessness about margins means they continue to innovate.  Just in this show, they announced a 24%+ price drop in S3 storage pricing and a data warehousing service (see below) that commoditizes the market.  As Jeff Bezos has famously said before, in regard to his competition, “your margin is my opportunity.”
  2. Amazon is taking off the gloves.  A friend of mine and I were discussing at the show how Amazon has entered the vendor conference game in the opposite way to nearly every tech vendor in history.  Most vendors use conferences to trumpet the future and therefore often lack substance.  AWS had an abundance of substance (a trillion objects in S3, anyone?) before it even thought about hosting an event.  As such, this was a rare first conference.  The normally-reticent AWS team finally talked to the world and had so much to say.  All of the executives on stage, especially SVP of AWS Andy Jassy and CTO Werner Vogels, were bubbling with confidence, energy and proof points.  And they weren’t afraid to take shots at the “cloud washers” trying to jump on the cloud computing bandwagon by relabeling older technologies.  Check out TechCrunch’s Alex Williams’ interview of Andy Jassy for more insights.
  3. The customer first thing is real.  So many companies list “customer first” or “customer-focused” as part of their core values (and then practice the opposite), so it’s easy to get cynical.  And yet, in every interaction I’ve had with the AWS team, everyone is consistent.  They learn from competitors a bit and are interested in the industry at large, but are much more concerned about what customers have to say.  Even over drinks or off the record, no one veers from the message.  Whether it’s Bill Bellicheck-like message training or genuine customer care (I think the latter), the team is totally in lock step.
  4. Not just IaaS anymore.  Amazon announced RedShift, a new data warehousing service.  While very cool in its own right (claiming to offer enterprise-grade data warehousing at a fraction of the cost of traditional solutions like Teradata), the move also represents a big shift for Amazon.  Historically, most services have been targeted at developers and have been focused on infrastructure. Even Amazon’s Hadoop service (Elastic MapReduce) was pretty low-level in its interfaces and required strong technical knowledge.  RedShift is a real enterprise application that replaces solutions customers pay millions of dollars for.  How far up the stack will Amazon go?
  5. Amazon moves fast.  Andy Jassy showed a 2012 calendar and highlighted the days Amazon introduced new services.  There were little dots everywhere.  And in addition to RedShift and the S3 price drops, Amazon introduced two new huge EC2 instances – one with 240 GB of RAM and another with 48 TB of disk.  Honestly, I don’t know how most traditional vendors will keep up with them.
  6. It’s all about EBS.  For large-scale applications, especially enterprise apps that heavily use databases, one of the bigger challenges for AWS users has been the Elastic Block Store (EBS) service.  EBS filled a critical hole in the AWS portfolio by offering block storage that stayed around whether or not EC2 instances were on.  But as customers started to tax EBS, they found they couldn’t get the consistency of IO performance (IOPS = input output operations per second) that they expected from traditional storage systems.  Enter Provisioned IOPS (or pIOPS for the cool ones amongst you).  Amazon introduced pIOPS back in July but customers are just starting to get their arms around it now – and they are excited.  During a packed EBS session, when an AWS product manager demoed getting 20,000 IOPS consistently across 10 machines, the audience spontaneously applauded.  Pretty cool.
  7. DynamoDB.  Amazon’s noSQL database, DynamoDB, is also getting a lot of traction with AWS customers.  One really cool app, WeatherBug, tracks lightning strikes across the world and alerts users to nearby lightning strikes.  The developer showed how easy it was for him to scale his app with DynamoDB.
  8. Data Pipeline.  Amazon also introduced Data Pipeline, a new service to orchestrate data movement between various Amazon repositories like S3 and EMR.  This also touched on another emerging element of Amazon’s strategy – using the huge amount of data AWS stores as an advantage and allowing customers to easily move the data between various optimized repositories for various use cases.
  9. Using multiple Availability Zones Regions.  With recent AWS outages, Amazon received some negative publicity about the reliability of its cloud.  Amazon’s response is, while it’s working on reliability overall, the best practice is to use the redundancy features built into AWS like Availability Zones and Regions.  Customers seem to be getting the message.
  10. Glacier.  As a storage guy, I was pretty amazed by Amazon’s long-term archival service announced a few months ago, Glacier.  At $0.01/GB/month, Glacier is probably the cheapest long-term storage option out there for most IT organizations.  The AWS team talked about Glacier a lot and customers seemed to be adding it to their architectural plans.
Lots of information to absorb.  But for me, the biggest message was simple: don’t get steamrolled.

10 Takeaways From Hadoop World

I fortunately beat Hurricane Sandy by seven days and spent most of last week at Strata + Hadoop World 2012, in what’s become the industry’s main event for Big Data.

Here are some quick thoughts from an action-packed week:

  1. Energy.  A lot of people wonder if Big Data is just big hype.  And while I think many in the industry are amused by the recent interest around data, I was pleasantly-surprised to see the genuine enthusiasm from folks at the conference. Attendees were very excited to meet, collaborate and find ways to pull the industry forward.  As a data point, consider the conference lunches.  While I find attendees at most conferences at mealtime tend to stare at their mobile phones or laptops while munching on a stale turkey sandwich and avoiding eye contact, the folks at Hadoop World that I sat with (randomly chosen) were eager to meet and exchange ideas.
  2. Real Customers.  Another way to gauge the stage of an industry is to visually scan the badges of attendees.  At many conferences, you’ll find consulting companies, vendors and job-seekers.  At Hadoop World, I was shocked by the number of actual customers (e.g., data scientists, business analysts) that were present.  And instead of carefully avoiding booth salespeople or stealthily stopping by to grab tchotchkes, customers were eager to engage with vendors and find solutions to their problems.
  3. New Stack.  What I find most promising about the Hadoop ecosystem is that technologists are re-imagining the entire IT stack around data – from storage (whether HDFS itself or alternative storage layers like those from MapR, CleverSafe or others) to statistics and predictive analytics (like Alpine Data Labs) to app servers (with the annoying-spelled Continuiity targeting big data-driven applications) to data visualization (like Platfora).  Existing vendors are aiming to (successfully or not) adapt to this new stack, while emerging companies want to use this shift to rewrite the vendor pecking order.
  4. OLAP.  In particular, the most active part of the big data stack these days, is around OLAP.  While Hadoop and the MapReduce programing framework are designed to process and analyze data, they are not known for the speed and interactivity that business analysts expect based upon existing Business Intelligence tools.  As such, many vendors announced or marketed offerings around iterative, OLAP-style big data query capabilities.  Cloudera announced the open source Impala project while Metamarkets open sourced its own related work on Druid.  Vendors like Platfora separately had in-memory OLAP as a core part of their offering.
  5. Hadoop As Platform.  On that note, what’s interesting is that because Hadoop is becoming such a standard and because customers will end up having so much data in HDFS, the industry is realizing that many capabilities (e.g., iterative OLAP queries) need to rebuilt on top of Hadoop – even though they don’t necessarily use the MapReduce batch programming model that drove Hadoop adoption in the first place.  This has happened to other platforms in the past.  Browsers were originally designed to link academic and scientific documents together.  Databases were originally created for transaction processing.  Yet once a platform becomes the standard, it gains inertia and it’s often easier to do new things (even things that the platform isn’t built for) on the platform, rather than to do them elsewhere.
  6. Storage.  In any data-intensive platform, storage is often one of the key constraints.  As such, there is a lot of energy around the storage layer in Hadoop.  HDFS has been dramatically improved by the community over the past year, including adding ability for the central NameNode to be failed over and to no longer be a single point of failure.  The HDFS roadmap sessions were completely packed at the conference.  Similarly vendors like MapR, CleverSafe and others are trying to innovate around and augment the Hadoop storage capabilities.  No matter which way you slice it though, the community is being forced to bake in enterprise-class storage functionality like global replication, disaster recovery and space optimization (e.g., through erasure encoding and compression) as Hadoop-based apps become more mission critical.
  7. Integrated Solutions vs. Components.  Another big debate in the Big Data community is whether customers will choose end-to-end solutions from individual vendors or mix-and-match best-of-breed components.  Like in all software categories, it will likely be a mix of both, with consolidation happening over time.  Vendors like Datameer and Platfora offer capabilities across multiple layers of the stack (in their cases, ETL, OLAP cubes and visualization interfaces) while you can alternately seek and stitch together very low-level components like ODBC connectors to Hadoop, dedicated OLAP cube technology and targeted ETL tools.
  8. BI Players.  In this mix, the incumbents that seem to have the most power in the Big Data ecosystem are the traditional Business Intelligence tools such as Tableau and SAS.  These products are widely used by business analysts and data scientists and thus many Big Data platform vendors are scrambling to make sure they integrate with the existing interfaces.  Indeed, some companies like Cirro are trying to make Big Data accessible via office productivity tools such as Microsoft Excel.
  9. Hiring.  With all of this energy and innovation, needless to say, every vendor seems to be aggressively hiring.  Heck, there was even a booth for the CIA (you got that right).  I asked the CIA representatives what they were doing at Hadoop World and they said they are looking for data scientists.  Or perhaps they were just there to watch us.  I thought of taking a picture of the CIA booth but I figured it could have inadvertently placed me into some Langley file somewhere.  I’m watching too much Homeland, I guess.
  10. Hilton.  Finally, I still don’t understand why people hold conferences at the New York Hilton, where this event was staged.  The place is old and stuffy.  The WiFi can barely handle web browsing, let alone “big data.”  And the rooms were constantly cold.  Hopefully next year is Vegas!

3 Ways To Bring Compassion To Companies

LinkedIn CEO Jeff Weiner wrote an excellent post on managing compassionately yesterday.

This one really hit home for me.  At my last company, LiveOffice, one of our three company values was Compassion.

On the day about three years ago that I ran a committee to define our company values (a classic Office Space / Office moment :) ), I remember some skeptical looks when I threw Compassion on the whiteboard for consideration.  And my fellow CEO friends often told me Compassion seemed odd compared to standard values like “Customer-Focus” or “Winning” (I can see the Successories posters now).

But as I explained to our team that day and still believe, Compassion is a powerful force in business in that it can help create organizations that understand their stakeholders better.  More importantly, though, for me it was just the right thing to do.

After we defined the value, the key question was how to implement Compassion in a company.  The organizing principle was the “Golden Rule” (do unto others as you’d have them do unto you – or similar phrasing).

We ended up defining a few different “use cases” for the Golden Rule, for each of our stakeholders.

1.  Customers

If a customer calls one of us and is angry, we could easily match their rage with our own.  Or we could pretend to be nice to the customer and complain behind their back.  Or, we could be compassionate and try to understand why the customer could be angry:

  • Maybe the last person from our company that dealt with her was rude?
  • Maybe her boss is on her case and she’s worried about her job?
  • Maybe her family member is ill or worse?

In short, rather than demonizing the customer, we could humanize her.

2.  Partners / Vendors

Companies are funny about partners.  When they are the small fish, they often complain about how their big fish partner doesn’t treat them well.  Yet, when they are driving the relationship and in control (most notably when they are a customer of a vendor), they implement all of the bad behavior they complained about.  This is pretty simple and comes down to things like:

  • Responding to partners in a timely fashion
  • Being transparent with partners about our priorities and where they fit in
  • Trying to translate how our business works in ways our partner would understand

3.  Teammates

Most importantly, we tried to implement Compassion internally.  This was a fruitful discussion, since so much of what happens in typical companies is the opposite of compassion.  Some examples we came up with included:

  • If a teammate is gossiping about another, try to stop it or at the least, don’t fan the flames
  • Avoid stereotypes (e.g., “sales people are unethical” or “engineers can’t talk to customers”) that put teammates into boxes
  • Always assume our teammates have good intentions

And the big test for us in Compassion came when any of the above groups acted with dis-Compassion.  In these cases, we constantly tried to remind ourselves that the Golden Rule is NOT “do unto others as they do unto you.”  That’s eye-for-an-eye and is no way to live.

Enterprises Are Made Of People

There’s been a lot of discussion lately about whether, like Soylent Greencorporations are made of people.

While the political implications of this are outside the scope of this blog, I think it’s important for enterprise entrepreneurs to understand that their customers are indeed made of people.

It sounds like an obvious concept.  Duh – enterprise customers have employees.  You meet them in dimly lit conference rooms after flying on a 2-stop redeye flight.  You take them out to the local Applebees for lunch.  You talk to them on conference calls amidst bad audio quality, people accidentally subjecting the entire call to hold music and folks saying “sorry – I was on mute.”  You get emails from them – some happy, some not-so-happy.

And obviously some enterprise products like Box, LogMeIn and Yammer can indeed be adopted by end-users.

Yet when enterprise startups think about their sales process, they often forget that they are selling to people.  They talk about the company’s “decision-making process,” like the organization is one fully-aligned entity that moves in lock step.  They try to find all of the rational reasons why the customer should buy the product, regurgitating three-letter acronyms that they’ve heard from analysts, like ROI (Return on Investment) and TCO (Total Cost of Ownership).  And then they get frustrated when the result doesn’t go the rational way it should have gone in their minds.

The now-controversial author Jonah Lehrer wrote an excellent book called How We Decide (before he got caught for plagiarism).  In it, he highlights how we as people have a flawed view of decision making.  We believe humans make decisions by conquering their emotions and using logic to make well-reasoned choices.  In fact, Lehrer uses brain research and real-world examples to show how our decision making is much more intuitive and non-linear than we might think.

In a similar way, organizations aren’t pre-programmed robots in the way they buy.  Companies are collections of individuals who each have their own unique idiosyncrasies.

What does that mean for a startup in terms of enterprise sales?  Here are 5 important takeaways:

  1. Understand the motivation of each individual involved in the buying process.  In a typical sales cycle, you might have an influencer, a decision-maker, an approver and other roles.  What does each person want in their job / career as relates to your product?  If you don’t understand the individual motivations, you don’t understand the customer.
  2. Categorize each individual’s motivation into fear, greed or love.  Most human actions can be bucketed into one of these three drivers.  A buyer might “fear” bad things that might happen if she doesn’t implement a new system (e.g., downtime if she doesn’t put in place your high availability architecture).  Or she might alternatively fear change and be averse to anything new.  A buyer might have “greed” (not in a bad way) by aspiring to get promoted or to get recognition internally for working on an important project.  Or she might hope that the skills gained from this project would make her more marketable in the future.  Alternatively, the buyer could have fallen in “love” with the vision of your company and at a distance, almost feel like she is part of your team (a great situation when it happens).
  3. Determine what to do given this motivation.  If the motivation is hurting you (e.g., buyer fears making a change), how do you help the buyer feel better about the risks?  If your buyer sees a career opportunity in learning your technology, make sure to highlight the growth in your company and the popularity of your technology – like a movement that can’t be stopped.  If your buyer feels like she is part of your virtual team, make her feel included in roadmap input, customer events and even in unique aspects of your culture.
  4. Make it fun.  The best people understand these motivations and then make personal connections to highlight and celebrate the motivations.  A very ambitious and bold sales rep with whom I worked previously would bring lottery tickets to every customer meeting, sending the signal not-so-subtly that the customer was, as an individual, going to win the lottery career-wise by choosing our solution.  He would even open meetings by saying “which one of you is going to get promoted for choosing our solution?”  Some enterprise jobs can be pretty monotonous, so customers often appreciate an honest and fun attitude.
  5. Keep it personal.  Remember throughout the process that you’re working with people and don’t make the mistake of expecting everyone to be aligned.  Sometimes you have to help the customer get aligned or at least help them understand where disagreements come from.

While every sales process is different and every domain or vertical has its own unique nuances, I’ve always found individual-focused selling to be critical.

The Summer of Nick

Summer of George

Welcome to my new blog.  If you are wondering who I am, click here.

After a wonderful four years as CEO of LiveOffice, we sold the company to Symantec in January 2012. I was very fortunate to be a part of a great ride with a nice ending. More importantly, I’m so lucky to have worked with a passionate and compassionate team who taught me so much.

I spent a few months at Symantec helping with the integration and am pleased to see the merger working out well for our customers and teammates – as well as for the Symantec business broadly. So far, Symantec has doubled down significantly on investment in the technology and the product seems to be outperforming plan.

Life worked out amazingly for us as well. On May 18th, I finished my last day at Symantec and that evening, we had our third child. And the next day was my birthday! With this great confluence of life events, I decided to take the summer off and be a nearly-full-time dad and husband.

Throughout the summer, people (parents, friends, my barber) kept asking me “so have you figured out what you want to do next?” But I was committed to a summer of pure, unadulterated unproductivity. Between rounds of mini-golf, trips to Pinkberry, vacations, stay-cations, lots of procrastination, Khan Academy math sessions, MIT Scratch kids computer programming  lessons and general daddy-kid lazy summer-ness, the past three months have easily been the most enjoyable of my life and we’re feeling really blessed. And while I always had an Evernote notebook open as startup ideas came to me, I think I did a pretty darn good job of not working on anything.

Indeed, my good friends Lee Weiner and Andrew Burton coined my mini-sabbatical the “Summer of Nick” after the classic “Summer of George” episode on Seinfeld. I think I still need to take up frolf (George’s new sport frisbee golf) though.

Alas, my eponymous summer is coming to a close and the kids (at least the older ones) are returning to school in a few weeks. So back to work.

Now to answer my barber’s question… “What’s next?” I’m not sure yet, but I know I love building and running companies and want to do it again – many times bigger, longer and uncut this time. And to help figure out the specifics, I’ll be spending time at Accel Partners as an Entrepreneur-In-Residence.

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