For My Vonage Diary

Steve has to try out the VoIP thing because of network flexibility it offers.
Steve has some problems with Vonage service quality compared to landline. Or not?
Vonage hits 1 million lines.
Skype, the much different P2P VoIP player, is acquired for $2.6 billion.
Vonage leads the VoIP pack in terms of number of subs.
Vonage files for IPO.
Jeff Nolan tips me that Vonage is offering customers a piece of the IPO action, but Steve has already cancelled service (was it for qualified investors only though, even though "everyone" got email?)
Zoli Erdos calls the Vonage IPO like he sees it and provides some other good background links.
Vonage pricing/market capitalization seems similar to the Skype exit value.
Vonage IPO off to the year’s worst start (also here).
However this turns out, it will be an interesting lesson in venture capital money, stock markets, and pure play vendor versus bundled offering versus P2P play versus …

Update (6/1/06): Crazy stuff. Om reports on angry customers (plus some stats on number of takers) that took Vonage up on getting a piece of the IPO deal.

Update (6/5/06): Kedrosky points to and sums up the pre- and post-money valuations of each round so one can estimate how much each tranche participant "made out" with (note no down rounds). As another recent link to fill out the story, here is a recent class action lawsuit filed by shareholders.

Update (6/19/06): Vonage is half the IPO price.

Update (4/12/07): CEO resigns. Situation at Vonage goes from bad to worse.

What Role Does Brand Name Play In Terms of Past Experiences?

This post was triggered by a current MBA student at my alma mater. I really should get some recruiting dollars from my former employers. It’s amazing how many questions I get about my past, as a direct result of this blog.

Unfortunately, I won’t be able to cover all of the ground as suggested in the title, but one item that came up from the soon-to-be grad was weighing the tradeoffs of going to one of two management consulting firms. One of the firms in question clearly had a better brand name (in terms of general recognition) than one of the firms I worked for, PRTM. One item of importance to this person was opportunities for advancement, potentially post-employment at one of the consulting firms and potentially as connected to brand strength.

In my opinion, brand name can play a role with future employers and with colleagues in an organization. This is just a fact of life. As a simple example, when I look through resumes, if it easier for me to identify with the companies that a person has worked for, I can often get a better sense of the context associated with that person. It’s just a matter of instant name recognition. Of course, when I spend more time on due diligence, I try to cut through all of that so that it doesn’t matter whether a person has past experience with a well-known brand or unknown brand company. All that matters is whether the person can do the proposed job, mix with the team, and flourish.

But fact of the matter in professional situations, like when I’m in a room introducing myself and there are brand names like Booz Allen and McKinsey at the top of people’s minds and perhaps sitting at the same table, people will often give me less attention until I back up my pedigree with actual experiences. Only then am I able to get myself ahead or on level ground. In some ways, it’s another level of explanation that I need to get through before I can get across the message of the "real me". Note that I’m not emphasizing ego here – simply the observation of how much communication time one may be allocated by others depending the initial impressions one makes based on brand name of past (or current) employers.

My original question was how much does brand name matter though? In worlds where first impressions matter more (which is not every world by any means), where there are numerous one-off interactions before people start formulating opinions or working relationships, where other people may talk about you (e.g., your boss’ boss) without having much direct working experience with you, I believe that brand weighs more strongly. So I have tendencies to believe that in things like startup and engineering environments, where relationships are more closely knit, organization structures are small, and where interactions are more frequent between people, the notion of brand name will not matter so much. In a larger company, however, there may be many more one-off interactions (in certain areas of a company like business development or consulting), and brand name of your past employers may matter "more".

But to put this in context, one does not have to use the brand of the employer to put forth one’s own brand. This was one of the reasons I was comfortable enough to take employment with a less well-known management consulting out of business school. It was easier for me to focus on fit, experiences that I desired, etc. as opposed to getting concerned with what company name was going to be on my resume.

When I sat down to write this post, I thought that I was going to conclude that people should put forth their own brands. At least I find that this seems to work for me, and it is probably the method I would suggest by default. But I have tried to open my mind some, and I have observed that there are some people that do quite well advancing the brands of their past employers before they advance their own brands. I have tried to think about why this may be so, and I tend to believe that the optimal path may depends on the environment in which one plays (e.g., as defined in terms of number of cold people-to-people interactions on a daily basis, the timeframe of an average interaction, the size of the organization, and the basic goals of an average interaction).

The Tao Of Taking Apart Cars With Your Bare Hands

Business school and management consulting firms provide their people with methodologies, best-in-class practices, historical case studies, scientific techniques, and the like as a foundation to the knowledge base. Usually there’s a past experience, a past consulting project … something for consultants to draw on to solve a client’s problem in the present.

But cases arise when a consultant in the field needs to solve a problem where it is (for all practical purposes for one reason or another, e.g., lack of sufficient time) impossible to draw from any prior experiences or any general framework. Problems of this flavor posed to me in the past include:

  • figuring out the optimum workflow for an outsourced function where the client is one of only two direct competitors in a closed industry where standard reference models are unknown
  • examining the operating model of a biofuel business (where I had no prior industry experience)
  • sizing the business value and economic value of a human life (for insurance and product development purposes)
  • valuing the price of a lease instrument that had never been created before (but that could be modelled ("mimicked") as three separate instruments that had been created and valued before)
  • predicting the nature of a competitor’s bid (based on imperfect and annecdotal information on their salesforce structure, estimations of sales quotas, estimations of sales cycle times, # deals, etc.)

I often liken the complexity and fuzziness of such situations to the situation of being posed the problem of having to take apart a locked car with one’s bare hands, without the assistance of tools, machines of any kind, or prior knowledge of past practices. How would you take apart the car quickly and if your life depended upon it?

Philosophically, one might try to breach the exterior of the car to get inside, where it might be easier to disassemble parts. One might break the window first, remove winshield wipers for make-do tools, use metal parts from the wipers as screwdrivers, unscrew pieces of the dashboard, and then try to move on from there. (Note that there’s no one way to approach the problem, but there are some ways that are probably less effective than other approaches).

The real point of my post is that a creative, never-give-up type of mentality is required, if anything as a last resort for a consultant. This same can probably also be said of entrepreneurship and other business scenarios, but I tend to associate this characteristic more with consulting (probably because of the project-driven, problem-solving nature of the practice). The Tao of Taking Apart Cars With One’s Bare Hands is a lesson in creativity, fortitude, and resolve in problem solving.