I’ve posted quite a bit about offshoring lately (e.g., here, here, here), and I’ve been more in tune with international business (now that I work for a German-HQed firm). This post over at SiliconBeat and the related threads are rich with information on deal sourcing, tides in the venture world, what macroeconomic tides many investors want to tap into, venture operations, the (un)scalable aspects of being the first resources in a start-up, plus much more (such as why later-stage deals have risen as of recent). The one thing that is not really covered in this post, however, and something I have not quite reconciled in my mind is the craziness of start-ups in the Valley right now. My hypothesis (which is neither complete nor a very constructive hypothesis) for the craziness is that the economics for certain start-ups has significantly changed (lower costs of entry), and that the reach of such companies can expand quite far. The utility of forming a hypothesis about all of this, however, gets at understanding where the money will be, where the money will flow out, where you want to be, and where you don’t want to be.
Outsourcing CIOs
Debra Chamra has a good article at Local Tech Wire on outsourcing CIOs. If your organization hasn’t thought about this before, perhaps a snip from the article’s section entitled, "Renting, Not Buying" provides good backdrop:
And why not? It is no secret to small and mid-size businesses that good tech help is not only hard to find these days, but potentially, hard to afford on a full-time basis. Known for creative solutions, these organizations have decided to rent rather than buy Chief Information Officers (CIOs).
According to Aberdeen Group senior analyst Stephen Lane, “The idea behind CIO outsourcing is that you’re renting an officer of the company. Ideally, that’s someone who has the experience to get your company started with IT while you’re building your own organization.” This movement goes beyond standard project-based outsourcing – an outsourced CIO becomes a member of the senior management team. Rest assured – while the role of CIO is relatively new, executive outsourcing is not a new endeavor. CEOs and CFOs have been outsourced successfully for years.
Handling Employee Blogs … Plus C-Level Censoring Of Blogs
See my blog post over here.
Interesting Post On New Capital Versus Hard Money And Pre-Venture Money & Sweat In Startups
Will Hsu has an interesting post on the jockeying and balancing that goes on between the outside financiers and founders (with respect to equity).
In a related area, I’ve sometimes been disturbed (not so much by the legal foundation) with respect to the "protections" for angel investors, non-founders, and early-in-the-game employees that get squeezed by later rounds of capital. Sometimes it seems like that the only real protection that these folks have come down to the integrity of the CEO, board members, and new investors in respecting what hard money (e.g., angel money) and hard sweat the employees have put in (for perhaps, very low wages). And where does the fiduciary responsibility of the board members fit with non-founders?
If you buy into my into my concept that it is impossible (or very hard) to provide legal protection to non-founders via investment rights agreements, etc., and if you further agree that board governance may be a little loose on obligations to non-founder employees, consider where the onus stands.
Update (8/18/05): BTW – in the case of non-founders I am conceptually all for performance-related structures, but the mechanics in today’s world seem very difficult to execute. Always interesting to search for new practices.
My First Amazon.com Book Review: “The Virtual Handshake”
I reviewed the book, "The Virtual Handshake" by David Teten and Scott Allen. My review is listed below and is also at the Amazon site. The American Management Association will publish "The Virtual Handshake: Opening Doors and Closing Deals Online" on August 30, 2005. Nice job by David and Scott.
As a person that sidewinded professionally into the social networking and blogging space over the course of a couple years, I wish I had the Virtual Handshake when I started my journey because it would have cut down the learning curve by orders of magnitude. The book provides a terrific overview of online and virtual networking technologies through detailed accounts of personal and business cases from around the world. Having a personal online presence has never been more important, and this book can show business people why it matters, how it matters, and where one can go to get started (in more areas than most can imagine). I have the Virtual Handshake as part of the required reading list for new employees not only because it’s the best concrete book on online networking in the market but also because I want people I work with to have a leg up in the world as individuals.
Continue reading “My First Amazon.com Book Review: “The Virtual Handshake””
Blogs Tip Gag Into Mainstream Media “Crisis” For FedEx
If you haven’t been following the FedEx Furniture guy, well here’s a good chronology of how a blog thing is just tipping from the blog world into mainstream media (becoming a story covered and to be covered on Headline News, ABC, NBC). Ignore it? Crisis? What’s the thought? Personally, I can’t wait for the Cast Away commercial with Tom Hanks and FedEx Furniture guy to smooth this all over. Hanks would have lived a lot more comfortably on the desert isle with some of FedEx Furniture guy’s stuff.
But seriously, this could be some of the cheapest advertising that FedEx has gotten in awhile.
Update (8/18/05): Bomb diffused very easily by FedEx (blog scoop by Jeremy Pepper). Via Steve Rubel.
Deloitte Choses Not To Blog And To Go Public
I’ve blogged before about the absence of management consulting blogs. Well it looks like Deloitte is signaling that they will not enter this realm because of risk and lack of clarity on how to legally protect the firm, which is a partnership structure.
From Rob O’Neill at the Sydney Morning Herald (need to register to see full article):
Big four accounting firm Deloitte has put corporate blogging on the back-burner following robust internal discussions about the company’s online strategies.
A proposal to start corporate blogging on leadership issues was put forward by the firm’s director of digital marketing and communications, Ryf Quail. But senior partners were concerned about legally protecting the firm, which is bound by a partnership structure.
I would speculate that by going public on this matter, and since Deloitte is considered to be a market leader in the consulting space, this is signaling 1) to employees that online strategies are a serious matter but need to be addressed appropriately and 2) to competing firms that Deloitte is not moving on blogging (and thus, other firms may really want to follow suit [like car manufacturers do with price leadership strategies of rising prices in a oligopoly-like market structure]).
Hat tip on Deloitte article: Niall Cook.
It Will Be Made In India
I just put up a post over at the CIO Weblog entitled, "OEM Software Supplier Balance To Shift Towards India". The shifts occuring with India have really peaked my interest from at least two areas: 1) how the changes will affect my children, and 2) how the changes will affect the business school communities.
Although it’s hard to read the tea leaves on this stuff, here’s a summary of some of the forces:
- financial skills and other skills getting commoditized
- offshoring to India growing
- offshoring of business skills to India growing
- offshoring of IT to India changing from offshoring to original manufacturing
- lower, historical concentration of management skills in India
- demand for MBAs in the US in decline
- concentration of the best business schools remains in the US
- US business schools under pressure (e.g., enrollment) and in decline
- MBA want to do management
- Signs of MBAs forgoing Wall Street for India internships (NY Times article)
To put light on the difference in demand, my sources tell me that MBA recruiting in India is very, very hot. As I understand it, MBAs go through an intense one day of recruiting, and at the end of that one day each person has 5-6 offers in hand. Compare that recruiting environment to the MBA environment for US students. No comparison.
So what are the opportunities? Probably any of the following:
- Opening of satellite campuses for US b-schools in India
- Maybe some entrepreneurs will start some new universities in India (like the venture when starting the INSEAD b-school)
- Growth of executive housing and relocation services for India
- High-end real estate targeted at international executives