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No Talent, No Problem: Become a Big Company Bureaucrat

26 Mar

Everyone working or doing business with large enterprises at some point have run against the frustrating bureaucracy reigning in those environments. This type of bureaucracy is an inherent aspect of big organizations but I’ve also been surprised of encountering a few startups launched by people with big company background which amazingly presents the same frustrating levels of bureaucracy.

Seeing that phenomenon has made me realize how much bureaucracy is not only a product or big company environments but also a consequence of hiring people with “bureaucratic DNA” ;)    At the end of the day, a lot of times bureaucracy is a mechanism created by people with no real talent in order to survive in a company environment.

How to spot a big company bureaucrat?

If you are working in a big company you already know who those guys are. If not, just look around for some of the following characteristics:

  • They want control but have no idea what to do with it: Bureaucrats demand and fight for control all the time because it makes them feel important. However, when granted control over a specific situation, they have no idea how to make effective decisions.
  • They have no real talent: You wonder who these people bribed to get to their position ;) Big company bureaucrats bring little or no marketable talent and instrument complex processes to hide that fact in the eyes of their colleagues.
  • They manage by fear: When in management positions, big company bureaucrats constantly inspire fear to their subordinates. This is just about the only way they know how to manage a team because fear is the only thing that makes them feel in control.
  • They can’t make a decision without calling a meeting: Making decisions entails taking risks and big company bureaucrats are adverse to risks; so what do they do? They call meetings to make other people responsible for the decision.
  • They call meetings for everything: Big company bureaucrats not only call meetings to get consensus about decisions but they call meetings for everything. Meetings makes bureaucrats appear busy in the eyes of their colleagues and, at the end, they have nothing better to do.
  • Everything is a crisis: Big company bureaucrats feel comfortable in crisis environments because they don’t know how to discriminate real important decisions from average ones. Besides, crisis offers bureaucrats the feeling of being in control that they so desperately need.

What do you think? Do you live surrounded by big company bureaucrats?

 
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Posted by on March 26, 2013 in Uncategorized

 

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Most Enterprise Software Analysts are Useless: Find the Right Ones

11 Mar

During last week’s trip to Europe, I received a call from the CIO of a fairly large organization whom I met last year, soliciting some advice on a technology evaluation process they were conducting on the mobility space. Needless to say I was a bit surprised by the sudden call given that this trip to Europe was exclusively focused on a couple of speaking engagements and I hadn’t scheduled any customer or partner visits. When I inquired a bit more about the causes of their request, the customer explained that they have been increasingly disappointed by the results of their technology evaluation efforts with a very prestigious analyst firm and needed a (in their own words) “more hands on opinion”.

As I started reviewing the analyst recommendation, it turned out our customer was absolutely correct in their assessment. The entire research reflected a very high level technology viewpoint of the different products as focused almost entirely in the support for some well-known buzzwords. While clearly frustrating, this experience is far from being an isolated incident. The fact of the matter is really hard to find enterprise software analysts with the hands-on knowledge about the technologies they evaluate, the technology knowledge and the market perspective to offer a pragmatic analysis about a specific technology trend. Most analysts in large firms, they have little or no practical experience developing products or solutions in the enterprise and they focused their analysis in large customer surveys. Also, these group of enterprise software analysts always seemed to be disconnected with the investment trends taking place in the venture capital or private equity communities which fosters a lot of the innovation that eventually impact the enterprises.

As a result, a lot of organization pay large amounts of money for receiving some very basic and often wrong advice that almost always tends to favor the most established players in the market.  A solid research in an enterprise software space should be a combination of a solid understanding of the current technology but also about the vision behind the product, market conditions, etc.

Obviously, my opinion about enterprise software analysts is far from being a generalization and you can still find some very talented analysts that come from a product engineering background who tend to go very deep in their researches in terms of the technical capabilities of a specific product of technology. I’ve been lucky enough to spend time with some of those rarely talented analysts and received some very valuable advice.

I know my thoughts about this topic can come across as very blunt, but I find it incredibly infuriating every time I see organizations being affected by relying on research materials that are completely disconnected from reality. My advice to enterprise customers to always do the correct due diligence when interacting with analysts. It’s not that hard to determine when you are interacting with an analyst with a solid understand of the space and your current needs or whether you are dealing with a someone who just likes to play to be an expert.

 
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Posted by on March 11, 2013 in Uncategorized

 

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Inspire With Your Vision Not With Success

14 Feb

At dinner last night, we had a very interesting debate about different strategies for building great teams. While hiring well is, undoubtedly, one of the most difficult elements of startups, the winning formula seems to be very clear: Hire great people that work great together and are inspired by the company’s vision. The first two factors of the equation need no further explanation; great people that can work well together is a winning formula to build great things. However, great people and great teams are not enough to build great companies; you still need an inspirational vision.

In the early stages of a startup vision is everything. When you don’t have a lot of traction or financial success, only a great visions can inspire people to join your team and help to make your company better. However, after the company grows a little bit and achieves some success, I’ve found that a lot of startups stop emphasizing their vision as the cornerstone of the company and, instead, they focus on inspiring employees with their initial success.

Success can be projected in many ways: industry awards, financial rewards, killer offices etc. Some of those versions of success can definitely attract people to join your company as most intelligent people prefer to join a successful venture than an unsuccessful one. However, success is rarely a factor to inspire people to do great things. When a successful image becomes the center of your company instead of an inspirational vision, you are likely to attract people that are only there in the good times and that can only execute in short term goals. It’s not a surprise that a lot of companies go through a transformation process after they achieve an initial wave of success in order to find their soul again.

As a founder and/or CEO, your MOST IMPORTANT JOB is to clearly articulate your company vision to the key players in your company so that they can communicate it within their teams. A solid vision will keep your team together and focused during the difficult times and it will serve as the inspiration to take your company to the next level during the good times. Financial success, a fun culture, awards are important but rarely inspirational. Selling a great vision can help create successful companies but selling success will only help you to create mediocrely successful ones.

 
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Posted by on February 14, 2013 in Uncategorized

 

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Enterprise Software Lessons: The Challenges of Acquiring International Customers

08 Feb

Last night, I was having dinner with some executives from one of our partners discussing their recent successes on acquiring customers and developing enterprise mobile solutions powered by our KidoZen platform in Eastern Europe and Asia. During our conversation, I couldn’t stop thinking that one of the main reason behind our partner’ success is their deep understanding of those markets and the dynamics to effectively execute on them.

Establishing a solid international customer presence is one of the hardest endeavors for any company but it’s exponentially more difficult in the enterprise software space. The main reason that makes international expansion so difficult for enterprise software companies is that customer acquisition, pricing and even negotiation dynamics are really influenced by the cultural and socioeconomic aspects of a specific region. These challenges are not as apparent in areas like North America and Western Europe that share a lot of economic, social and cultural commonalities but it’s very obvious on almost every other case. Underestimating socioeconomic, cultural and historic differences is one of the main mistakes made by enterprise software startups attempting to acquire international customers.

In order to mitigate those challenges, I typically advice startups to focus on establishing the correct strategic alliances with other enterprise software vendors with the right market and business-culture understanding and the professional reputation to be successful in a specific country or region. Even though establishing mutually beneficial and effective strategic alliances is an incredible hard effort, it can be extremely rewarding in the long run. Particularly in the enterprise software space, strategic partners can complement your product or service with the right connections, customer acquisition and delivery processes that will help you to organically grow znc be successful on that market. Attempting to acquire customers internationally all by yourself, can result in an exhausting exercise that will distract you from your main missing or creating great enterprise software technologies or services.

 
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Posted by on February 8, 2013 in Uncategorized

 

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Enterprise Software Lessons: IT Services Keep Gaining Momentum

06 Feb

Yesterday, big data consultancy Think Big Analytics announced a 3M angel round led

by Daniel Scheinman with participation from WI Harper Group. Think Big Analytics specializes on providing professional services around the implementation of solutions powered by on-premise or big data technology stacks.

This founding round is another example of the increasing interest of VC firms in elite IT professional services firms that focus on hot enterprise software trends. Just a few years ago it was unconceivable for a top VC firm to invest on a professional services organizations. Lack or recurrent revenue, long sales cycles, scaling challenges etc were often cited as factors that conspired against the VC interest on these type of business models.

However, the rapid emergence of new technology trends such as big data, private clouds, enterprise mobility, security among others have slowly but steadily beginning to change those dynamics. Given the difficulties for IT organizations to implement these technologies on their own, professional services firms can enjoy of highly lucrative deals in areas that are making a huge difference in the enterprise.

In my opinion, this trend is only going to get bigger in the next few months and we are likely to see more boutique consulting firms raising different rounds of institutional capital.

 
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Posted by on February 6, 2013 in Uncategorized

 

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Enterprise Software Lessons: The User is not The Buyer

01 Feb

Last weekend I was reading a fabulous article by Roman Stanek on which he presented a series of arguments that demonstrate that, despite movements like the consumerization of IT, enterprise software remains very old school. When debating about the article with a colleague, we found ourselves having a very interesting discussions about the hidden factors that still cause enterprises to resist revolutionary movements like the consumerization of the enterprise. Among those factors, there is one that enterprise software startups almost always managed to ignore: in the enterprise, users are not necessarily the buyers.

The intrinsic characteristics of the enterprise software sales model represents a major difference about the acquisition and monetization process between enterprise and consumer software technologies. In the enterprise, software products are typically either targeting hundreds or thousands of users or providing important infrastructure functionalities that will be used by dozens of applications. Either case is sufficient for enterprise software products to be subjected to various approval and compliance processes that go well beyond the acceptance of the initial users.

Why is this important?

Well, as an enterprise software startup, you need to understand the dynamics of enterprise software sales models and surround your product with the right sales models that help it navigate the technology acquisition processes in the enterprise. Here are a few suggestion I found useful:

  • Find a champion: The most important aspect of an enterprise software sales process is to find the right people within your customer’s organization that are so in love with your product that they are willing to champion it’s adoption within the enterprise.
  • Give your champion incentives and ammunitions to sale your product”: Now that you’ve found your champion, you need to offer him the right materials, tools, incentives and other elements so he/she can be effective socializing your product within the enterprise.
  • Reduce friction: As a principle, enterprises tend to resist disruptive changes. If you have the option, make sure your product is easy to acquire in a non-invasive mode.
  • Speak at different levels: Sales processes in the enterprise involve people that are not the target audience of your product. Regardless of whether you are selling to developers, IT Pros, marketing, etc make sure you can present the value proposition of your technology from different standpoints like executive, technical or sales that are easily understandable by the different groups in the enterprise.
  • Be patient: Selling to enterprises is a bit of a chess game, you have to stay patient and make the right moves at the right time.
 
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Posted by on February 1, 2013 in Uncategorized

 

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Enterprise Software Lessons: Fighting IT Paralysis with Innovation

25 Jan

These days I spend a considerable amount of times working with CIOs discussing strategies to embrace modern enterprise software techniques such as big data or enterprise mobility within their organizations. One thing that still amazes me is the large number of obstacles that enterprises still encounter embracing innovative technologies.

The sad contradiction is that, in any organization, you can find talented IT leaders that are eager to bring innovation into their companies. Contrary to popular believe, great developers and managers in IT are also eager for innovation. However, time and time again, these forward thinker leader struggle against processes and policies that were created decades ago in a time on which uncontrolled IT innovation could have been, in fact, harmful to an organizations.

But IT organizations need to understand that those times are gone!

The idea of constraining innovation in the name of security, compliance, stability is simply ludicrous. In the era of cloud computing, open source dominance, software as a service, software virtualization the costs of experimenting and innovating are almost insignificant compared to the potential benefits.

In a nutshell, IT organizations need to move away from the contradictory position of wanting innovation while enforcing the policies to shut it down. The new technology revolutions have brought enterprise software back from the dark ages but IT organizations need the forward thinkers, the innovators, the linchpins to implement great solutions.

In this new renaissance of enterprise software, aspects such as IT policies, compliance rules and business processes should be established to help innovations to be applicable in the enterprise but never to constraint it. At the end, the harm that lack of innovation can cause enterprises in terms of talent, morale, competitive differentiation and even culture are significant larger than any potential damages they can incur by fomenting innovations.

 
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Posted by on January 25, 2013 in Uncategorized

 

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Enterprise Software Lessons: Forget About Virality and Focus on Network Effects

17 Jan

In recent years, the consumerization of the enterprise have caused an emergence of a decent number of enterprise software startups that leverage consumer market techniques to acquire customers. However, that phenomenon have also caused a lot of misconceptions among startups about the customer acquisition dynamics in the enterprise. Arguably, the most notorious of all those misconceptions is about trying to achieve viral adoption in enterprise software products.

Virality is one of those concepts inherited from the consumer market that startups keep trying to replicate in the enterprise in vain. Who wouldn’t want to have the viral effects of technologies like Facebook or Dropbox in their enterprise software product. However, the customer acquisition models in the enterprise make true virality (a la Facebook) almost impossible to achieve in the enterprise.

The fundamental principle of viral adoption is that users of a product naturally engage or attract new users. This principle is fundamentally contradictory with the way most enterprises operate. Even if that wasn’t a barrier, the sales cycles of most enterprise software products break any potential viral adoption cycle.

Instead of dreaming about viral adoption, I believe enterprise software startups should focus on a more achievable element: network effects.

The network effects concept was introduced by venture capitalist extraordinaire Fred Wilson in a brilliant blog post published a few months ago. Essentially, a product with network effects have the ability to form “networks” around the technology. A network is a group of connected entities that contribute to the technology. The main two types of networks in enterprise software products are people networks or data networks.

Classic examples of network effects can be strong developer communities, B2B models that make a company naturally engage their partners in the user of a specific product or data marketplaces on which users contribute data sets that can be used by other users.

Whether network effects are really hard to achieve in the enterprise, they provide a very unique defensible market position for an enterprise software technology. If a bigger enterprise vendor attempts to compete against a product with network effects, they don’t only need to provide a superior technology and customer acquisition models but also figure out a way to compete against the different networks established around the product which is almost impossible to achieve.

 
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Posted by on January 17, 2013 in Uncategorized

 

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2013 for Enterprise Software Startups: A Year of Natural Selection

03 Jan

In the last few weeks of 2012, I received a number of emails referring to a growing preference within the venture capital community for revenue focused enterprise software startups compared to market-share consumer startups. While the argument is way more complex than what can be expressed in the light of this blog post, there is certain true to the fact that the tight economic times and the poor performance of recent consumer-based software IPOs have impacted the consumer VC market.

However, despite this VC love, I think this year is going to be “interesting” to say the least for enterprise software startups. The uncertainty of the world economy, particularly the US markets, fiscal cliffs, the budgets cuts established in most IT departments as well as the large number of startups that raised angel funding and are now competing for a Series A are just some of the factors that, I believe, will make 2013 a challenging year for most enterprise software startups.

Like any other challenging time, this upcoming year offers a unique opportunity for the better companies to solidify their market presence as a lot of the weaker competitors won’t be able to survive some of the phenomenon listed above. Not to sound apocalyptic, but my advice to the enterprise software startup community is to operate as it we were expecting another economic downturn. We certainly already started doing that on our side. Here are a few of the aspects I consider relevant:

Focus on Revenue

If driving revenue wasn’t your immediate goal, now it should be. In 2013, focus on finding and nurturing the revenue producing engines of growth of your company. Discovering the different avenues by which enterprises can acquire your software will provide you with the necessary resources to keep growing during economically uncertain times while building a loyal and committed customer based.

Focus on Organic Growth

These are not the times to foment rapid growth in order to just capture market share. In my opinion, this year, enterprise software startups should focus on growing organically based on revenue and optimize for being extremely efficient operationally.

Target Relevant Markets

These are great times to be in the enterprise software business. With revolutionary technology movements happening in areas such as cloud computing, mobility, big data, gamification, etc the opportunities for building relevant enterprise software companies are tremendous. However, with the uncertainly of the economy, I believe enterprises will invest on the areas that are key to their growth and set everything else aside. In that sense, enterprise software startups that are targeting mission critical areas are likely to receive a lot of attention from customers while the others would have to wait for better times.

Go After the Big Guys Money

Tough economic times can affect the big enterprise software vendors more than any other startup. While the big enterprise guys struggle to convince companies to spend large sums in complex enterprise solutions, leaner, more efficient and technologically superior startups can find an opportunity to capture that customer based with more attractive solutions.

These are some of the key advice I have for enterprise software startups in 2013. I have a lot of ideas about this topic but I will save those for a later post.

What about you?

Any words of wisdom for enterprise software startups in this new year ?

 
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Posted by on January 3, 2013 in Uncategorized

 

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Oracle Beats the Street but Still Looks Boring

19 Dec

teamoracle-380x252Oracle reported numbers yesterday and the results were better than expected. Earnings on a per-share basis were 64 cents, three cents above the consensus of 61 cents. Sales were $9.11 billion, beating the consensus estimate of $9.03 billion. The main driver for the outstanding performance was new software license sales, which rose by 17 percent to reach $2.4 billion. License updates grew 7 percent to $4.3 billion. Hardware revenue was $734 million.

And yet, it didn’t matter….

Somehow this remarkable performance couldn’t hide the fact that Oracle is becoming increasingly irrelevant in the modern enterprise software world. Other than current shareholders, Wall Street and the press I don’t think anybody was really interested or excited about Oracle’s earning report.

The enterprise software world is changing and changing fast and you have to wonder whether Oracle can continue buying their way out of irrelevance. In an enterprise software world driven by cloud, mobility, big data and social models, Oracle is still following the same rules that made it a dominant player in enterprise IT in the last three decades. The problem winds of the enterprise software world have shifted in a way that not even Oracle can afford to ignore.

When analyzing the pillars of the new enterprise IT world is hard to think about Oracle as an influential player in any of them.

Enterprise Mobility

As of today, Oracle has no presence or technology in the enterprise mobility space. Despite the increasing investments in the space by longtime rival SAP, Oracle keeps ignoring the enterprise mobility movements. At the moment, none of Oracle platforms have a well-established mobile presence and there is no clear roadmap for it.

Cloud Computing

Despite recent investments in the Oracle Cloud platform, Oracle can hardly be considered a strong player when comes to cloud platforms. In the infrastructure as a service (IaaS) space, Oracle Cloud looses hands downs when compared to competitors like Amazon’s Web Services, RackSpace or Google Compute Engine. In the platform as a service context, technologies such as Heroku, CloudFoundry, Force.com, Windows Azure or OpenShift are miles ahead of Oracle Cloud in terms of capabilities, market presence, developer and partner communities.

SaaS

This is the area where Oracle might have seen the most traction lately with products such as Oracle Fusion CRM Cloud Service and the recent acquisition of Taleo and RoghtNow. However, this space is heavily competitive with large vendors like Salesforce.com and SAP’s Success Factors or exciting new companies like WorkDay.

BigData

Exadata is a great technology but can’t really be considered an influential technology in the big data space. Startups like Cloudera, HorthinWorks, DataStax and many others gaining increasing traction with simple solutions, more agile distribution models and passionate developer communities which highly contrasts with the close and exclusive Exadata partner model.

So what can we conclude from all this?

Oracle earnings report was a great validation that the enterprise IT market remains strong but hardly a reason to be excited about Oracle technology roadmap. There are 2 words that come to mind when I think about Oracle these days in the new enterprise software world: Strong and Irrelevant.

 
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Posted by on December 19, 2012 in Uncategorized

 

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