Author: Steve Shu

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Mini-Review of the Judgment of Paris

Judgment of Paris, written by George Taber, is about the Paris Wine Tasting of 1976. When I first skimmed the book at the bookstore, I have to say it looked like a very dry read. That said, I found the book very interesting from the perspective of entrepreneurship, economics, and romance over a period of time that outlasted the history of most businesses (remember there are relatively few businesses that are over 100 years old). Three perspectives I gleaned from the book:

  1. Stories of Entrepreneurship – Dreams are nice, but reality is that winemakers often needed to get cash flow positive faster than the minimum of five or so some years to go to market with red wines. Thus, white winemaking became an early recognized business model of getting things rolling with its shorter (closer to two year) timeframe. Like the hopeful winemakers than envisioned getting their dream red wines to market while producing white wine in the near-term to build up credibility, entrepreneurs of today also find that they often need to get to cash flow sooner than later while making progress (e.g., to prove out their business models and build brand reputation).
  2. Backdrop of Macroeconomic Conditions Affecting the Landscape – As one might find today with traditional industries and functional areas getting turned upside by web 2.0 (e.g., PR world changed by blogging, brick and mortar bookstores displaced by Amazon.com), the rigid and regulated French wine industry was "overtaken" by entrepreneurs (that is, the entrepreneurs closed a big gap and redefined the game). Californian winemakers were not encumbered by regulations as imposed in France to make wines with 100% of such and such grapes, etc. The California winemakers were able to experiment by creating wines with blends of grapes (e.g., to mellow the taste), use refrigeration techniques in conjunction fermentation research conducted in the university, etc. They slowly experimented and chipped away at a problem of making serious wines. Although the US winemaking industry was almost decimated by the Prohibition era (and both the supply chains and demand chains took many years to recover), its was a combination of entrepreneurs and survivors (the cockroaches of the wine industry) that played a key role in democratizing wine and making it what we know today (as opposed to just a sweet, jug wine industry).
  3. Romance of the Senses and Commitment – I have never wanted to learn how to make wine before reading this book. This book romanticizes the process of love with wine more than I can describe. With the winemaker cross tasting barrels, walking up and down the rows of the vineyard and sampling the taste of each grape until the optimal 3-4 days of harvest, watching the weather with great hope, and then turning ecstatic when things come together or being disappointed when rain brings in the mold … When I think about the fact that some of the entrepreneurs in the winemaking industry violated commonly believed codes of startups by trying to solve both supply and demand issues (as opposed to just solving existing problems with solutions 1-2 orders of magnitude better than the past), well it just makes the book even more romantic for me.

The book is not for everyone, and I have to admit that had I not learned more about wines in the past year, I might not appreciate this book to the extent I do now. What I will say is that if you are interested in learning more about wines beyond tasting, this is a good book to explore. You may not get the same experience I did, but you may still find that by reading and exploring multiple sources of info that you get an enriched view of either people, wines, international history, business, and/or marketing.

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Improving the State of Corporate Blogging

As much as it pains me to agree with Jeff Nolan on his post about corporate blogging here, I have to say that annecdotally I do not see an immediate tipping point for corporate blogging. From my vantage point, I see at least a couple of other factors contributing to the sad state:

  • There are very few "skilled" bloggers in any position of authority within a corporation – Despite the grassroots nature of blogging, people still need role models for corporate blogging. Unless a company is actively supporting blogging, there is a (tremendous) amount of baggage that blogging (whether right) carries with it in a professional setting.
  • Academic arguments on risk management are nice, but some corporations need to gain extra comfort level with their abilities to handle actual blog crises (or at least criticism in the blogosphere) – Ask yourself, who in your organization is a role model for handling this kind of stuff? Have they proven that they can take the heat (of any temperature) in the blog environment or is it just conceptual? I’d be surprised if people could name three people (off the tops of their heads) in their companies that could "handle" the blogosphere. Again whether right, I see it as a barrier to corporate blogging.

The environment and culture surrounding blogging sets the tone within a corporation (case in point: Malcolm Gladwell’s portrayal of how crime in New York was reduced by eliminating graffiti and the visible signs of vandalism).

One area that I am sensing positive feedback in the corporate environment is around serious use of blog reading. Perhaps it is because people can digest larger amounts of information in blog format as opposed to reading traditional new sources. Perhaps it is because they can glean leads and subtle insights from reading blogs. Or perhaps it is related to the richer link content in blogs.

So if companies are not ready to encourage corporate blog writing by actively seeking, reaching out to, and elevating the exposure of skilled bloggers in their own organizations, I would suggest that they support blog reading (and blog intranets as sandboxes at least). The ROI on gaining industry knowledge from blog reading strikes close to very immediately. I think that some managers are surprised by how much their workers’ level of knowledge comes up when they are encouraged to read quality blogs, like Om Malik, Daily Wireless, and Mark Evans (to pick a few from the telecom space).

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Musings On Human Chimerism

This vacation I had a chance to watch some TV, in addition to spending time with the family, reading some books on wine and music, etc.

The most eye opening thing that I saw over vacation was some TV show on human chimerism, with at least two cases where people did *not* have any visible/physical signs of the genetic condition, but where they had two full sets of DNA in their bodies.

The term, "chimerism", comes from Greek mythology and refers to a multi-headed creature combining serpent, goat, and lion physiology (picture).

Now in human chimerism, there can be very visible markers. For example, in some reports of human chimerism (which is very rare as I understand things), people have documented checkerboard skin patterns on the chest where there is essentially a line going down the middle of the body, and where alternating squares (perhaps one inch by one inch blocks) of skin have light and dark pigmentation. To a casual observer, the checkerboard pattern may look perfectly square. In other reported cases, the person has adopted both male and female DNA. Again with a line going down the middle of the body from the head to the belly button, one half of the body may have male organs versus female. Surgery may be required to adjust the person to reconstruct the person as one sex or the other.

What blows my mind, however, is the case where the person looks and feels perfectly normal. As in turns out, it is believed that these people came to being by the fusing of two fully fertilized eggs as with Siamese twins, but because the cells did not split (say by day 4 of conception – don’t quote me on the specifics here since I’m doing off the top of my head), the embryo started to develop as one single baby with two *full* sets of DNA. Based on genetic, surgical, chemical, etc. research, it is believed that in these subset of cases that I am talking about, that while the person’s body consists of two full sets of DNA, any given organ may predominantly develop with one full set of DNA or the other (e.g., liver could have one full set of DNA from one egg, but the skin could have the full set of DNA from the other egg).

The cases caught on the TV show kind of blew my mind in terms of implications and how assumptions can be challenged. To make a long story short, two female chimeras from totally separate walks of life where shown to not have direct genetic connections to at least one of their children (by birth and eliminating possibilities of surrogate motherhood). One of the women was trying to prove that her kids were genetically hers, but DNA testing failed. Subsequent and more elaborate DNA testing showed that her kids adopted the DNA of some crazy combination of her father and her brother (this was after a court ordered that the birth of her forthcoming child be witnessed and have a forensic lab person collect blood, DNA material, etc. during childbirth – a DNA match between her and her child was negative).

DNA has often been used in courts of law to substantiate heinous crimes or to vindicate wrongly accused. DNA has often been thought of as having a one-to-one mapping with a person. Now the cardinality of the relationship may be challenged. (Note: to put some of this in perspective, however, the TV show stated that there may only be 40-60 cases [don’t quote me on number] of chimerism reported in the world, regardless of whether condition is physically visible)

Not a normal post by me by any means. But these are things that make me go …. hmmm. When I feel my (stereotypical) female traits coming through, well this discovery gives me moment to pause.

Update (2/21/06): See comments below on Siamese twins. It is likely that my reference to Siamese twins is incorrect.

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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.

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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).

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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.

Continue reading “Musings On Jack Of All Trades, Entrepreneurs, and Position Players”

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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.

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