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Some Thoughts About Strategic Alliances

In the last few weeks we have been announcing a series of strategic alliances around our KidoZen platform. While watching the press releases I was reflecting upon the great job our team is doing finding, structuring and nurturing the right types of partnerships. This process has been a learning experience for us given that, as any new startup, we had to go through the process of figuring out which models of strategic alliances were effective for us and our partners.

Establishing effective strategic alliances is one of the hardest things on the early days of any startup. Identifying the right partners, make your technology visible to them, building and getting in motion the right partnership dynamics are some of the fundamental elements that need to be master as part of your early business development effort.

Based on our experience, there are a few lessons learned that I think might be helpful when structuring strategic alliances in startups.

Don’t Focus on the Big Guys

When thinking about strategic alliances, a lot of startups make the classic mistake to focus on the biggest players on a specific category. As tempting as partnering with a big company might be, you need to be aware of the level of effort and resources that might be required to establish those types of agreements and get the right level of attention from your potential big partner.

Instead of focusing on the big guys, we have found very effective to find the medium, boutique players on a specific category that are truly innovating in the space and devote the right resources and focus to the strategic alliance.

Have a plan to execute after the agreement is signed

A lot of business development folks think about strategic alliances mostly from the marketing perspective. Big announcements, solid press release but no real plan of how to execute after the agreement is signed. As a startup, you should spend the right time focusing on putting the dynamics in place to make the partnership effective and deliver real value to your company and your partner.

Honor the Partnership

Partnerships are only effective is both parties can benefit from it. As a startup, it’s natural to focus most of your attention on driving value to your organization but you should also put the right level of effort to honor your partnership agreement and make your partner successful even if it require sacrifices on your side.

You are Always Looking for Partners

Signing solid strategic alliance is a constant marathon, not a sprint. If you are a CEO or head of business development of a startup, you are always looking and reaching out to potential partners even if you are not equipped to get any agreements in place at the time. Building strong relationships, keeping partners up to date about your progress and vision will do wonders for your company when comes time to build solid strategic alliances.

 
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Posted by on September 27, 2013 in Uncategorized

 

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Giving Back to Customers

Last month one of our top KidoZen clients approached us to host a series of strategy sessions about enterprise mobility for the benefit of some of its developers and IT executives. After brainstorming a bit, we structured a program that included different thought leadership sessions followed by a KidoZen hackathon on which developers got to implement brand new enterprise mobile apps powered by KidoZen.

From the logistics standpoint, this was a bit of a commitment on our side given that we needed to devote the time and resources to put together the lab exercises and sessions. To that, we need to add the fact that 4-5 of our engineers were going to spend an entire day not focusing on our product but rather working on a hackathon exercise. Any organizational logic was telling us that this was a huge commitment on our side but we decided to go for it anyways.

After a few days of preparations, we hosted the strategy workshop and the hackathon last Friday. The experience was awesome!!!

Watching developers hack for 3-4 hours on your platform, coming up with innovative ideas and figuring out solutions by themselves is a special feeling that not many people get to experience. The KidoZen team had a blast engaging directly with the customer and they certainly appreciated our commitment to a long term partnership. For us, last Friday gave us the opportunity to honor the trust that this big customer place on us and to, in some sense, give back to them.

Building long term relationships with your customers and partners require you to put the necessary investment to make them successful even if that doesn’t translate into financial benefits for your company. As painful as it might look like, it is important to realize that a partnership is only successful if both parties can benefit from it and they are committed to honor it every step of the way. We certainly enjoyed the experience this Friday and are looking forward to many more in the near future.

I’ll leave you with a photo taken during the last few mins of the hackaton.

WP_20130913_001

 

 
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Posted by on September 16, 2013 in Uncategorized

 

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4 Key Characteristics Of A Great CTO

These days I am helping a couple of startups with their technical recruiting processes and organizing their engineering groups. One of the things that I find interesting is how much non-technical founders emphasize on hiring experienced people. While I consider experience a very important factor in a great tech executive, I don’t believe experience alone can help you build a great technical team.

A few years ago, when I was still a computer science student, I had a very interesting conversation with a very wise professor about this topic. At the time, I was evaluating offers for engineering leader at several large organizations but was second-guessing myself due to my lack of experience in the industry. During our conversation, my friend enumerated some of the factors that are required in great technical leaders:

  • Knowledge: Being extremely, and I mean extremely, knowledgeable about the technology market, ecosystem, new trends etc is key to lead a great engineering team. Experience alone certain doesn’t give you knowledge.
  • Experience: Having “been there, done that” definitely helps to recognize the patterns, techniques and processes that can be effective in specific situations.
  • Perspective: From my viewpoint, this is the most important quality of look in a tech leader and the hardest one to explain. Perspective uses knowledge to overcome the lack of experience and make effective decisions. The thing about perspective is that is almost impossible to teach, you either have it and nurture it or you don’t
  • Analytical and Organized Thinking: Finally, engineering leaders need to be able to look at problems from a very analytical perspective and organize engineering processes in models that can be effective. These challenges require very strong, organized and analytical thought process which is very hard to fund in most people.

I know these are not the only characteristics of a great engineering leader but I consider them the most important. Other aspects such as the ability to listen, team player etc are also necessary but can be coached and learned over time.

I hope that helps. What do you think? What makes a great engineering leader?

 

 
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Posted by on September 6, 2013 in Uncategorized

 

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The Importance of Spending Time Together with your Team

I am working from Buenos Aires this week as part of a very intense week of product planning for our KidoZen platform. Spending time with the new team, has reaffirmed my believes about the importance of face-to-face communication.

In previous years, I didn’t devoted enough time to visit our team overseas and, instead, invested a lot of energy on implementing the right communication infrastructure to mitigate the challenges of not having the majority of the team in the same office space. While the results were great from a productivity standpoint, it became obvious that the team was missing that chemistry that builds-up when you meet people in person and share a glass of wine while discussing the company vision. Sadly, that lack of chemistry remains hidden most of the time but always surfaces when the team faces difficult decisions that can test the core of your team values. I learned that one the hard way.

With KidoZen, I made the promise of changing those dynamics and our team member in the USA and Argentina are regularly spending time together working on different product planning and strategy sessions.

What a difference that has made!

I am firm believer in distributed teams and the globalization of talent. As a company, KidoZen likes to hire the best talent regardless of the geographic location. The advances on communication technologies, the cultural evolution of most societies have lowered racial, language and religious barriers making it exponentially simpler for organizations to build distributed teams. However, there are still very tangible benefits of co-located teams.

  • Showing that you care: Getting on a plane to go visit a team member signals to everyone how much you care for the team.
  • Learning what motivates your team: Spending time with your team will help you learn their passions, motivations and goals in life which are important drivers when you are building your future together.
  • Observing how people work and analyze problems: You will get to observe your team working dynamics, how they approach problems, strengths, weaknesses, etc.
  • Building trust: In-person communication builds trust. People can look into your eyes and determine if your message is honest and strong enough to resist the difficult times.
  • Reinforce your vision: Spending time together with your team will give you a great opportunity to reinforce the company vision, goals and make your team aware of their importance in the execution of that vision.
  • Building friendships: Some of the relationships you build with your colleagues will have the opportunity to evolve into friendships. While is not always a good idea to mix friendships and work, I never run away from cultivating great friendships with amazing people. Quite the contrary, I feel blessed for having the opportunity to spend time with some many spectacular folks.

I hope some of the items above make sense. I would love to hear your thoughts about the importance of face-to-face communication in a startup. I believe that, as a CEO, is your job to put that burden upon yourself and fly everywhere to spend time with your team. I am certainly enjoying my time in Buenos Aires. I will leave you with a photo of a team dinner a few nights ago:

KidoDinner

 
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Posted by on August 23, 2013 in Uncategorized

 

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Great Business= Great Team + Defensible Product + Scalable Business + Big Market

systemAlmost every week, I get presented with ideas from different startups that are looking for feedback. The process of evaluating a business is different for different people at different times. At this stage of my career, there are certain parameters about a business (including KidoZen) that get my really excited. Those parameters are very different from aspects that used to get my fired up about a business years ago.

In any case, when talking to entrepreneurs, I try to apply part of that logic to evaluate the potential of an idea or product. While there are many factors that contribute to the success of a business idea there are four that I consider fundamental and I look for on any business I evaluate. My little formula to quickly determine the potential of a business idea is similar to the following:

Successful Business= Great team + Defensible Product + Scalable Business Model + Big Market

Obvious at first glance, I am surprised about how many times experienced entepreneurs (including myself) or investors tend to overlook one or many of those factors during the evaluation criteria. Let’s try to break down the formula a little bit more:

  • Great team: This one is obvious, a great team is fundamental to the success of most business endeavors. Is the founding team capable of executing? Are they thought leaders in their space? Do they posses above-average talent ? Are the insanely passionate about the idea?
  • Defensible Product: Building a defensible product or service is essential to survive in a competitive market on which you might face from large companies with virtually unlimited resources to new startups that are innovating on your market and business model. To give an example, a new drug produced by a pharmaceutical company is clearly defensible and hard to close while a new restaurant presents more difficult challenges to differentiate themselves from potential competitors.
  • Big Market: Another obvious one. These days, I don’t get too excited about ideas that are not targeting large markets. A big market doesn’t only offer the potential to monetize at a large scale but gives you the room to pivot the business model onto different directions without changing the target market.
  • Scalable Business Model: Scaling a business is a very hard problem to solve particularly when the business model is not scalable in nature. A business at which the customer acquisition rate and cost grow at the same rate is clearly not scalable. Over time, the cost of acquiring new customers, partners , expanding onto new areas should decrease allowing the business to gorw at a healthy pace.

There are many more factors that contribute to the success of a business model but, at this stage in my career, I consider the aforementioned four essential to the success of any startup.

What do you look for in a new a business?

 
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Posted by on August 7, 2013 in Uncategorized

 

Fighting the Culture of Asking with a Culture of Giving

grLast week I hosted a dinner for a few folks in the tech community in FL that I thought will benefit from meeting each other. We had a wonderful time enjoying wine and discussing the technology market. When leaving, one of the attendees approached me to thank me for the invitation and she quickly expressed her surprise that I didn’t take advantage of the event to explore some new business opportunities around my new venture (KidoZen). My response to her was very simple: dinner was part my attempts to fight the “culture of asking”.

The “culture of asking” is one of the most detrimental aspects of modern business relationships. With some exceptions, of course, we constantly engage in business dynamics on which each party is constantly asking for different things for their benefit. While asking favors is part of everyday business, I find it incredibly constraining to nurture a relationship on the premises of always thinking how to benefit from it. Instead, we can really create long term relationships if we spend the time thinking how to benefit the other party without expecting anything in return. While we consider giving a fundamental element of personal relationships, its rarely part of modern business relationships.

A few years back, one of my longtime mentors advised me to devote sometime every week to think about how to help some of my business acquaintances without expecting immediate reciprocity. To this day, I have been trying to practice that regularly and couldn’t be happier with the experience.

The explanation is very simple: Giving is not only a pure way to help other people but also an incredibly effective way to build strong business relationships. Here are some of my favorite reasons while giving is more important than asking:

  • Giving makes you feel good: Spiritually, chemically, biologically…you name it…people always feel better when they give than when they ask for something.
  • Asking is short-term, giving is long-term: Giving helps people build relationships without a short–term objective in mind.
  • When you give, people feel obligated to reciprocate: As opportunistic as it sounds, when people receive a favor, a nice gesture they feel psychologically obliged to reciprocate it in the future.
  • Giving allows you to be genuine: Being genuine is one of the hardest things to achieve in a business relationship. However, there is no better setting to be completely genuine than what you are giving something without expecting anything in return.

These are some of my favorite reason why I think is important to foment a culture of giving. I would encourage to follow the advice it was once given to me and think hard about what to do every week to help some of your business relationships without expecting anything in return. However, always do it because is right and without a second agenda. You will find it incredibly rewarding.

 
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Posted by on July 17, 2013 in Uncategorized

 

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Oracle Partners with Microsoft, Salesforce.com and NetSuite but Still Looks Ugly.

After reporting disappointing numbers last week, Oracle’s Larry Ellison pre-announced a series of important and exciting partnerships with different cloud providers and hinted the names of Microsoft, Salesforce.com and NetSuite. As promised, this week Oracle announced three different partnerships with the aforementioned cloud providers. While this is, undoubtedly, a very interesting move on the Oracle side, I find hard to believe is will make a difference in their current position in the cloud market. Despite these partnerships, Oracle still looks very boring in the cloud!

The Microsoft Deal

The essence of these partnership, Oracle will certify and support Oracle software — including Java, Oracle Database and Oracle WebLogic Server — on Windows Server Hyper-V and in Windows Azure. Microsoft will also offer Java, Oracle Database and Oracle WebLogic Server to Windows Azure customers, and Oracle will make Oracle Linux available to Windows Azure customers.

My thoughts?

From a Windows Azure perspective I find hard to believe this deal will make any difference on WebLogic or Windows Azure situation. While Windows Azure has supported Java for a long time, the uptake hasn’t been great within the enterprise customer community. Windows Azure has been more appealing to traditional Microsoft shops while developers building Weblogic applications are not necessarily crazy about the cloud.

More importantly, this deal doesn’t help Weblogic to stop the migration of developers to competitive platforms

The Salesforce.com Deal

As part of this partnership, Salesforce.com plans to standardize on the Oracle Linux operating system, Exadata engineered systems, the Oracle Database, and Java Middleware Platform. Oracle plans to integrate salesforce.com with Oracle’s Fusion HCM and Financial Cloud, and provide the core technology to power Salesforce.com’s applications and platform. Salesforce.com will also implement Oracle’s Fusion HCM and Financial cloud applications throughout the company.

My thoughts?

Very important deal for Oracle! However, this feels like Salesforce.com helping out Oracle more than anything else. In terms of the impact, it’s very hard to tell. Salesforce.com already runs on Oracle software and it’s difficult to imagine impactful the integration between the two SaaS platforms will be. Most enterprises require high level of customizations in order to implement these integrations.

The NetSuite Deal

Under the partnership, announced Wednesday, NetSuite will integrate its enterprise resource planning (ERP) software, which companies uses to manage various parts of their day-to-day business, with Oracle’s human resources (HCM) apps.

My thoughts?

NetSuite customer base is mostly composed for premium-medium size business. I am not really certain how popular HCM would be within that community that are not the typical Oracle buyer.

 

While all three deals represent a major change from Oracle’s traditional “take no prisoners” approach, it’s really hard to see any of these strategic alliances moving the needle for Oracle’s position in the cloud space. Regardless, it’s very good to see these level of collaboration between traditional rivals. Time will tell….

 
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Posted by on June 28, 2013 in Uncategorized

 

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