Little Disappointed About Del.icio.us Acquisition

Let me preface this by saying that I’m really glad for del.icio.us and its prior financiers. Let me also preface this post by saying that this post only reflects my initial reaction to the recent acquisition and has nothing to do with Yahoo specifically acquiring del.icio.us.

I think social bookmarking tools are a great innovation. But I think that tools like del.icio.us could have gone further in terms of becoming a productivity tool for corporate users.

I am one of the biggest fans of Post It Notes. I tag everything with them … reports I need to read, sections that my collegues need to read on a printed emails, key pages in journals, magazines, Powerpoint presentations, etc.

Del.icio.us, or perhaps another bookmarking service, could have become (in my wildest dreams) the Post It Note of mixed media, not just traditional Internet stuff. Would have been nice for me to have such technlology cut across the internet, intranet-only enterprise content management systems, and email and files on computer systems. In the early 90s, Apple computer used to have a way to highlight certain files with a special color (e.g., red). Such a feature enabled users like myself to create ad-hoc priority or classification schemes for files. That feature wasn’t the same as what del.icio.us currently is, but we don’t have that old Apple feature anymore with Windows. How are we supposed to tag and bookmark files these days?

Day-to-day work in a business often cuts across multiple technologies, and I have found that bookmarks are a good way to put briefing packages together (while attaching notes). Briefing packages might be customer prospect research, competitive intelligence, market studies, or ad-hoc technology primer packages. I’ve used Web 2.0 technology to accomplish these tasks productively in a business environment, and given the right technology I probably would pay for this as I pay for Post It Notes in the physical world. Of course, it would be best if a given technology was ubiquitous across user bases.

Now del.icio.us was probably never targeted for the corporate user as its primary target. All said, when innovative companies like del.icio.us are swooped up, I often wonder whether the essence of the innovations will ever hit mainstream use in corporations.

Update (12/21/05): Ed Sim posts about the web as a platform in the enterprise. This is exactly the productivity kind of stuff I am talking about in this post and that I allude to in my other post. Productivity in the enterprise using web 2.0 stuff is a largely untapped area.

Swearing By Or Swearing At Benchmarking

I thought that I would post something about a perspective that I have on benchmarking that might be somewhat of a minority position as compared to other management consultants. My thoughts were triggered in the context of an operations project where I am working with an ex-Booz Allen Hamilton person.

Benchmarking client company operations against comparable company operations helps to place the client company in the context of competition, quantify areas of differences, and provide a fact-based foundation upon which management decisions can be made.

I totally agree with this in theory. In reality, one can run into a ton of issues, some of which include:

  • Existing metrics and measurements were collected for a service or product which is not comparable to the service or product of current concern – This is somewhat ill-defined, but as an example, suppose that a operations process related to wireless data service is different from a support process related to broadcast video service.
  • Client or management pokes a hole in the validity of benchmark and undermines the credibility of your case – May be tied to a variation of the first one, but in any case, think about how strongly one wants to hinge the consultative study on a single benchmark source or data point.
  • Benchmark information cannot be readily found – Ok, one can go recommend starting a benchmarking study before taking any action as these need not be cost-prohibitive studies to conduct. Consulting firms can also leverage their knowledge bases and networks to bring light to the table. I just caution taking actions that delay progress when other methods for fact-building can be taken (perhaps in parallel with the benchmarking).
  • Client metrics don’t exist, are questionable, or are not comparable – After jumping through hoops, the client measurement systems may not match the requirements and measurement guidelines used by participants in the benchmarking study …

So given the issues above (and I have to say in my experience, every operations consulting engagement I’ve been in has run into at least one of these issues), I would suggest that the prospects of using other methods for operations analysis not be discounted too much (and these methods do not require benchmarking as a necessary condition):

  • Structural analysis – e.g., whether an operations process runs in parallel or serial and whether the processes can be run in parallel versus serial is something that can be factually analyzed and need not necessarily be compared to other companies.
  • Bottleneck analysis – e.g., when resources are waiting downstream for another resource that is bottlenecked and when this happens with a high statistical certainty, this can indicate that the work structure is not optimal (perhaps flattening of the work structure, cross-training, or better planning is desirable).
  • Trend analysis – e.g., if costs are going up, cycle-times to respond are getting longer, and customers are getting more upset, these are facts that one can respond to without having to have benchmark data to the nth degree up-front. Many companies may do an OK job at getting static data, but longitudinal data over time can also be very informative.
  • Consistency analysis – although not as cut and dry, the argument is along the following lines: if a company choses a particular strategy (e.g., being a feature leader versus low-cost provider), then there are some tactics that are inconsistent or less consistent with the strategy (e.g., being a feature leader and running below average R&D investment rates).

So while I will say that I am all for benchmarks, if one finds oneself swearing at benchmarks, then there may also be an opportunity to step back and apply some other principles that do not require as much benchmark information to be readily available. A tremendous amount of value can also be added using analysis methods like the ones I mentioned above. There are many other methods – please feel free to share some of your favorites.

Bonus link: good website covering balanced scorecard information as well as quality functional deployment (QFD) principles (the latter of which I have seen applied more in product management scenarios).

Musings On Jack Of All Trades, Entrepreneurs, and Position Players

Andy has a post over at his blog which highlights how an entrepreneur distinguishes himself from MBAs and venture capitalists, the latter two types of people characterized as those that frequently suffer from a "Jack of All Trades [Master of None] Syndrome". The entrepreneur cited in Andy’s blog writes (brackets added by me for clarity):

The reality is that VCs suffer from the same problem that most MBA graduates face: “Jack of All Trades” Syndrome. Put simply, they know a little about a lot but lack real depth when it comes to a particular field. Starting a successful company [as an entrepreneur] involves solving a critical problem for a targeted group of customers. To be able to do that, you have to understand the customer extremely well, and be an expert in their interests, needs and problems.

I don’t disagree with the need as an entrepreneur to be focused on the specific problems of targeted customers. What actually struck me as a little funny though was (my perhaps incorrect) perception of a distinction between Jack of All Trades-types and entrepreneurs.

In some ways, many entrepreneurs benefit from having some Jack of All Trades skills. If one is an engineer or software developer, having some innate sales skills or knowledge of the sales process can be invaluable in testing out ideas in the field early on. Having some knowledge about finance is beneficial too, especially if looking for angel or venture money and trying to understand their concerns at a deeper level. Knowledge of marketing also helps in a bootstrap environment as one tries to figure out how to develop that magical, self-referencing customer ecosystem. Having knowledge about how other businesses are run is also very valuable.

To digress a bit, a couple of months ago a venture partner indicated that my Jack of All Trades appetite was that of a classic entrepreneur. As context, his firm was about to draw a second round of institutional money (so the firm was little bit beyond startup), and he was contemplating having me run business development. An interesting question that came up was what was my appetite was for being a position player (a person that can fill a specific role exclusively, e.g., VP of Business Development, VP of Marketing, VP of Sales). In essence, this person was saying that Jack of All Trades-types were fine for early ventures, but as the company moved out of startup mode that it needed specialists.

All said, I believe that many entrepreneurs can benefit by being a Jack of Some Trades and a master of something. Note that the utility player in the baseball world is practically extinct (but then so is the 80s Rock Drummer). And while I made a case for utility players in entrepreneurial settings, there is a strong case for the utility-types being replaced by position players down the road as a venture gets more mature. Don’t overvalue or overdiscount the Jack.

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My Former Employer/Startup Acquired (The Fluid Nature of Startups)

Intalio (a company funded by 3i, Cargill, Woodside Fund, SAP Ventures, et. al.) has acquired my former employer, FiveSight Technologies, a manufacturer of one of the highest (if not the highest) quality business process execution language (BPEL) engines the world has ever seen. eWeek reports on it here. Congrats to the team of companies as they enter a new era. Maciej Szefler, formerly chief architect for FiveSight, takes over as chief architect for Intalio. FiveSight had some of the smartest guys (excluding myself) in the world working for it, and I thought I would take a moment to congratulate them, in particular founders, Paul Brown, Maciej Szefler, and Justin Guinney. I’d also like to thank the three of them for letting me join the team.

I thought I’d take a moment to reflect upon one aspect of FiveSight in its life as a startup. Perhaps it will shed some light on the fluid nature of the startup environment.

I joined FiveSight at the end of 2000 (close to concurrent with its seed round of funding) before we had offices, and I was the first non-programmer (aka business guy) to join the company. The company had a concentration in automating business processes using low-level, highly technical infrastructure and had a few clients exclusively in the healthcare space. The product that was sold was in the integration space, sort of like a toolkit, and it was *not* the product that was sold as part of FiveSight to Intalio. The standards around BPEL were not that well-formed around the time we were in that original business. We raised corporate venture capital (pre-BPEL) through Union Pacific Corporation (NYSE:UNP) and got some big name clients with our first product, such as Nomura and Hitachi in Japan, and Harley-Davidson. Probably the accomplishment of which I am most proud at FiveSight was locating a prospect (by cold calling them from a magazine article), selling our first enterprise deal into an industry sector where we had no references, and then negotiating and facilitating the venture funding with Paul. It is very hard to line up deals when you have no customer references, no brand name to speak of, no venture capital or big financial backer, and when you need to compete against brand name, larger firms.

To make a long story very short, the first product that we got out the door, served as FiveSight’s experience and drove a lot of the intellectual property that went into the BPEL engine now owned by Intalio. When we started the journey, we did not know we would wind up with a new product. But we listened to customers and the market. We also did not know how the proprietary versus open source playing field was going to pan out. FiveSight managed to focus on the shifting landscape. We went with proprietary until it made sense. While doing all of the basic blocking and tackling associated with near-term sales and startups, we also had to focus on the larger picture as to how the industry was shifting.

I left FiveSight at the end of 2004 due to a relocation from Chicago to Dallas (as my wife finished her PhD). To this day it is still hard to keep someone part of core management if they are not within HQ.

Open source is here, and with FiveSight, Intalio is even more at the forefront of a class of products provided via that means. Technology aside, Intalio got some of the smartest guys I have ever worked with. They are and will continue to be legendary.

Disclosure: I am an investor in Intalio and formerly part of the management team of FiveSight.

Update (12/8/05): Paul has some additional experiences to share here. Paul, thanks for the kind words.

Virginia Postrel On Job Hopping And Innovation

Virginia Postrel has a very nice new article that describes some theories supporting how job hopping may positively contribute to innovation. She cites the case of comparing Silicon Valley to Route 128 as I did in an earlier post (but where I cited the scenario in the context of venture capital and employee-friendy laws in California over Boston as a key explanatory variable on differences in amount of venture money).

There’s a paragraph in her writeup that triggered another thought. Here’s the paragraph:

When employees jump from company to company, they take their knowledge
with them. "The innovation from one firm will tend to bleed over into
other firms," Professor Rebitzer explained. For a given company, "it’s
hard to capture the returns on your innovation," he went on. "From an
economics perspective, that should hamper innovation."

I don’t necessarily agree (or disagree) with Professor Rebitzer here. Just because an employee (a supplier) can take their knowledge over to another firm does not mean from an economics perspective that innovation should be hampered. I offer another hypothesis (which is not supported by any data) – that employees in Silicon Valley look at their employers as a market. That net-net employees will choose to work for firms that have better business models and can appropriate the returns of good ideas. Perhaps because of better business models (or better hype), such companies have better future free cash flows and can pay better. Thus, the good ideas that come out of innovation will naturally travel to where the market of employers can best put it to use. This does not necessarily mean that innovation will be diluted across firms as suggested above.

But back to those Silicon Valley people, are they just not loyal to their employers if they are hopping around so much? Maybe time just moves faster in Silicon Valley … 😉