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Yesterday, I attended the above mentioned talk at TiE Silicon Valley and picked up some very interesting nuggets that could be useful to other startups. Yes, many of these seem like common sense sales techniques, but all startups should keep these in mind especially if they are selling to the enterprise. Thanks to TiE and especially to Monica Hein of IBM in moderating the panel in an excellent way.

The three panelists included:

  •  Shamyo Chatterjee, CIO, Callidus Software Inc.
  • Chris Bedi, CIO, JDSU
  • Jessica Denecour, Senior Vice President and CIO, Varian Medical Systems

There was no prepared presentation and Monica ensured the session was informative and informal. I was pleasantly surprised with the frank and open discussions from all three CIOs which provided some interesting insights to the audience. After the session, Shamyo, Chris and Jessica stayed for quite a while offering advice on a one-on-one basis.

If you can get a hold of the video of the session you should watch it. Short of that, here are some of the nuggets I picked up.

There are four key questions that this session answered:

  • How can I get CIOs to respond to me?
  • What are the top priorities of CIOs?
  • How to esnure a successful POC?
  • What other hurdles should you expect?

How can I get CIOs to respond to me?

“I can’t get CIOs to respond to me” was a common complaint from all entrepreneurs in the room. Well, the good news is you are not alone and the bad news is that you are not alone. On an average, a typical CIO in Silicon Valley gets in excess of few hundred solicitations for various products from startups. So how do I get attention?

Here are some key points:

If your message resonates with the CIO’s key priorities, you are likely to get a response

  • Persistence is key – Jessica gave an example of a sales guy from Blue Jean Networks who persisted and she finally agreed to meet with him
  • Reach out to CIOs with some reference – Chris mentioned that coming through someone they know would get you on top of their queue
  • How – Phone calls are probably dead for most people, Email may work for some and Linkedin for others
  • Hangout at same places as CIOs do – not a Google Hangout but sessions like this like – a personal connection goes further, even in this age of virtual social networks

What are the top priorities for the CIOs?

This is a harder question to generalize but all of the CIOs agreed with the following at broad level:

  •  Mobilization of enterprise is one of the top CIO priorities – for some it may be just getting infrastructure issues like MDM, for others it is mobilizing their enterprise applications.
  •  Sales enablement or empowerment is and will continue to be hot; technologies that help to increase sales and sales productivity
  •  Big Data was probably the most controversial topics – a priority for Chris while Jessica saying she wasn’t interested

So how do you know what are the priorities of the CIO at a particular company?

Look at the company’s annual report. You can clearly see the CEO’s priorities and CIOs derive some of their priorities from that. A great suggestion from the audience is for CIOs to share their priorities like CIOs of government organizations do. The panel considered this impractical for commercial enterprises.

How do you ensure a successful POC?

You got CIO’s attention and you have a great product. Before buying from anyone, especially a startup, CIOs will insist on a proof of concept (POC) with their systems. Of course, you want the POC to be successful as that is the next hurdle to getting that purchase order (PO).

For a successful POC, the company and the CIO must agree on a clear definition of success – this will vary from product to product. If you need resources from the company, specify them upfront.

What other hurdles will should you expect?

As sexy as it may sound for a startup to land a large enterprise, consider that big companies can overwhelm a startup. Make sure your startup is ready for the challenge.  Can you really provide the level of support they demand? If providing SaaS, can you scale? Can you offer 24/7 service?

In most large companies, you must be approved as a vendor and that means evaluating the viability of your startup. If you provide a differentiated product with significant business value the enterprise needs, the bar may be low. If you are in the middle of the enterprise’s mission critical systems, the bar will be very high. In any case, the right funding, customer references and your team are critical aspects that demonstrate your viability.

Oh yes, if this is one of your early large customers, don’t expect to get your market price. CIOs that go on a limb to buy from startups will want a good deal – a very good deal. Before you offer that discounted pricing, get the CIO to agree to some soft benefits like take reference calls or make some calls to their buddies in the business.

Conclusion

Reaching and selling to a CIO is no different than any other sale. The key is to know where  your company’s value proposition sits in relation to the CIO’s priorites. Once you are in, ensure that you have well defined criteria for the proof of concept – both entry and exit. The road to PO will include the test of viability every startup should be prepared to deal with.

 

I have owned shares in various companies for the last 25 years but have never been to one of the annual shareholder’s meeting for companies I own shares in. To resolve my curiosity, I decided to finally attend Apple’s annual shareholders’ meeting last week. I read lots of articles from others and so will try to cover different aspect of the meeting in this blog.

Setup

If you are like me and get to places just in time, you will likely be in the overflow room for a popular meeting like that of Apple where you will be watching all of the action on the screen from next door. Interestingly, Apple CEO Tim Cook indicated to everyone that in the new headquarter, the meeting for 2017 will do away with the overflow room as the main room will be large enough. The overflow room was just one of the cafeterias and didn’t seem that grand as that of Google or Facebook or may be they didn’t think shareholders deserve anything better especially the ones that came just on time.

Entering Apple’s meeting with wearable Tech

In the name of security or privacy or secrecy, Apple decided to take away everyone’s cell phone or tablet or any computer somehow fearing we may use their technology to tell everyone what they said in a meeting which is open to anyone with a single share of Apple.  The last two times I had to surrender my cell phone was when I visited Samsung headquarters and then in Dubai when I visited a telephone service provider. So wonder what will happen when Apple and most of their competitors introduce new wearable tech.  I just hope Apple will lead in bypassing these archaic rules and take leadership in allowing these devices in the future.

 Would Steve Jobs be ever caught not using his own technology?

steve vs timFirst part of the meeting is a boring formal session wherein they just read all of the proposed resolutions and allow people to express their opinion even though online voting had already decided on the fate of every resolution – a mere formality.  Then came the second and most interesting part of the meeting wherein Tim Cook took the stage in a very informal way to answer questions. He started with a prepared remark and guess what device he used for his notes – iPhone, iPad or iMac? The answer is none – he used the old fashioned printed page. Yes, he did take questions from the overflow room on the iPad. Wondering what would Steve Jobs have done in this case?

Can software be done the same way as Apple has done hardware?

One and perhaps the only smart business related question was asked by one of the shareholders regarding Google’s perceived lead in new wearable tech. Tim Cook dismissed it saying we don’t announce pre release products and that they have many things in the hopper. It is a well known fact that software is really becoming the linchpin and just having a faster, cheaper, lighter device is not enough. However, looking at Apple’s issues with maps, Siri falling behind Google as a personal assistant and very imperfect finger ID effort, would they be better off being more open and giving their users a chance to test these products before releasing it in the wild.

Is Apple stock going to languish for 2 more years?

apple headquarter image from business insider

apple headquarter image from business insider

I have noticed that every time a public company starts to build its own campus its stock suffers during that time. I saw that happen to 3Com, Sun and then to Oracle and wondered why? May be because the CEO focuses more attention to leaving his/her mark on the building than on the company! Apple’s new headquarters is at least 2 years away from completion and Tim seemed really proud of it. I wonder if Apple will join the ranks of other companies and have its stock languish for few more years while they build a new home.

If Tim were the CEO of a startup?

Tim has an interesting style – kind of like Manmohan Singh, the prime minister of India – somewhat boring but to the point and may be that is what a large company like Apple needs. He did have some jokes but I kept wondering if he were the CEO of a startup how investors would perceive him. I have seen many a CEOs and founders being rejected by investors saying they were not passionate enough. May be the same investors would have rejected to fund his startup but now he is on the other side buying 20+ companies a year.

More Resources

Here are some more articles that reported on various other aspects of the meeting that may be of interest to readers

1) Climate Change and Tim Cook - http://arstechnica.com/apple/2014/03/at-apple-shareholders-meeting-tim-cook-tells-off-climate-change-deniers/

2) Apple TV and others - http://www.macworld.com/article/2103500/cook-dishes-on-apple-tv-innovation-cash-on-hand-at-annual-shareholder-meeting.html

3) Tim Cook on ROI - http://www.businessinsider.com/tim-cook-versus-a-conservative-think-tank-2014-2

Apple #AirDrop at #WWDC – compatibility & issues – #ios7 vs mac osX http://ow.ly/lWuEF

Thanks to Documents.Me user @NadiaHyeong – the ease of integrated #mobile #cloud access : http://ow.ly/lutEy

Today, Apple announced its new iPhone5. While I was reading this article from Mashable and the comments mostly from angry Android users, it reminded me of how this debate is so similar to what democrats and republicans have about their candidates Obama and Romney. So let us use that analogy and see if Apple will be winner with its iPhone5.

Independent voters/users will decide fate of AAPL

Like the presidential politics it is clear that democrats are voting for Obama just as existing iPhone users are going to buy iPhone5. Similarly republicans are going to vote for Romney just as existing Android users who are continuing to buy their Android phones whether from Google, HTC or Samsung. Just as this election is going to be decided by independents so will the selection of the phones be made by independents (neither an Apple fanboy nor an Android fanboy). According to JP Morgan study, success of iPhone5 may have a positive impact on the US GDP.

How will independents vote? To buy iPhone5 or Not!

There are three categories of independents who may make their decision differently

  • People taking their first plunge to smartphones
  • People taking their first plunge to touch based smartphones
  • People unhappy with their existing phones

People taking their first plunge to smartphones

This may be the largest segment for success of Apple or Samsung. Many of these users are likely to be price sensitive and so Android may win here or the older iPhones (iPhone4S, iPhone4) may win some percentage of these users. Also since many of these users are looking for pre paid plans, Android is likely to win here too. However, Samsung may not be the winner here as there are many more cheaper Android smartphones available from other manufacturers. This segment is generally ignored by Apple.

People taking their first plunge to touch based smartphones

This segment is mainly the remaining Blackberry users who have finally decided to move to a touch based smartphone. In this case the likely winner will be Apple since iPhone is approved by many more companies and is relatively easier to use compared to Android smartphones

People unhappy with their existing smartphones

This segment is probably biased more towards iPhone users since Apple does keep its users more happy whether through its stores or other Apple fanboys. If Apple succeeds in creating more hype as iPhone5 launch approaches this segment will shift more in its favor.

Will iPhone5 be a victory for AAPL

Granted that iPhone5 launch was nothing spectacular but Apple will succeed due to support from its

  • Existing iPhone users
  • Users migrating from Blackberry
  • Unhappy Android users

Thanks to Muppalla Sridhar, one of the organizers for Tech Symposium, I had the pleasure of moderating a panel entitled “ Enterprise Mobility – Challenges and Opportunities”. This is a summary from this session which will give a quick overview of various issues in this sector.

Thanks to my following fellow panelists who helped me with various questions including some from the audience

  • Sanjeev Gupta (General Manager, Avaya)
  • Ashwin Krishnan (Director, Product Management,Juniper Networks)
  • Indranil Chatterjee (VP Product Management, Openwave Mobility)
  • Toby Rush (CEO,EyeVerify)

The issues discussed can be split into the following main heading

  • BYOD – Bring your own device
  • Type of Device – Android, iOS or Windows
  • Making a Business Case
  • Security & Authentication
  • Applications and App Stores
  • Connectivity and Service Provider Issues

BYOD

With the consumerization of IT, consumers are more in control of what mobile devices they use. So rather than employees having multiple phones and tablets, enterprises have decided to allow employees to bring their own device or as someone put it more aptly as LYOD – lease your own device to the enterprise.

 Type of Device

Some discussions reaffirmed that RIM’s Blackberry failed to deliver to market expectation and is losing market share constantly. Apple iOS is very popular and almost the only tablet device in the corporate world. Android is important and with some new advancements like from Samsung in virtualization, it may become more enterprise ready. Microsoft Windows8 is great on paper but it is not clear if users will adopt it as fast as IT and/or Microsoft may like to see. Bottom line, any device that wins users will become the choice of enterprise as well.

 Making a Business Case

Sanjay Gupta, both in his session and at the panel, offered many examples of companies in healthcare and government who have justified use of iPad due to increased productivity like saving of 15 minutes per day of nurse time. May be we can share some of those slides in Slideshare at a later time.

 Security & Authentication

Security is paramount but focus of securing device needs to shift to securing enterprise data. VPN systems may not an ideal solution for securing mobile devices unlike PCs due to various reasons including power issues of mobile device. Toby Rush feels time for biometric security has now come with new cameras and additional capabilities on mobile devices and their software.

 Applications & App Stores

First and foremost, users need access to everyday files on their mobile devices something DocSync.Net offers. Then there is the issue of porting and running enterprise apps and with the fragmentation of so many devices this task is not easy. To know whether a particular app is secure or not is a challenge for which there are no clear answers but user education and enterprise authorized app stores were offered as possible solutions without any conclusion.

 Connectivity and Service Provider Issues

Ideally enterprises would like to get data only plans and family calling type plans for data services. The service provider billing systems will take some time to get there even if they are ready to offer such services. It was also felt that large operators like Verizon and AT&T have less incentive to offer these services and these services may initially come from regional operators.

 Conclusion

Enterprise mobility is a new frontier with many issues and so there are many opportunities for entrepreneurs and enterprising vendors in the eco systems to take advantage of it.

This post written by me was originally posted on Up and Running Blogs

Do I need a co-founder? How do I chose one? What do I do if the relationship doesn’t work out?

These are some of the most frequent questions about co-founders that I have heard from entrepreneurs over the years. In this post, I’ll try to answer these, and a few other important related questions.

Do I need a co-founder?
The entrepreneurial journey, though exciting and romanticized with stories of huge successes, is actually really lonely. It is a place where the buck starts and stops with you. You have a great idea to start a new venture and the theory goes that if you can’t convince at least one other person to join the venture with you, how will you convince customers to buy into your vision and product/service. The bottom line is that you do need someone else to bounce your ideas off of, someone who offers a different perspective at least sometimes, someone who also feels that his/her success is tied to the venture just as yours is.

Image

How many co-founders should I have?
There is really no right or wrong answer here. I have seen many successful companies with as few as 2 and as many of 11 co-founders. For every company there are critical skill sets that are needed to get it going. It could be an engineer and a business person, or it may need two different sets of engineering skills and a business person. For most companies, two to three people are sufficient as co-founders. Two co-founders is the most ideal from management perspective. Three, though okay in many cases, can become a crowd when new management is brought in and founders start taking sides.

What is the criteria for selecting a co-founder?
I have seen many companies with spouses as co-founders succeed, but as an employee I have stayed away from joining these type of companies and advise my friends to do the same. Often co-founders are friends, but is that the best way to select co-founders? I have seen many good friendships ruined after a startup venture goes south.

Every business needs some technical skill and some business acumen.  A good engineer can design something fancy but that doesn’t mean there’s a market for it or that it will sell. A good business person may know what will sell but if he or she can’t get someone to produce the right product, what good does it do? Co-founding teams should bring in complimentary, not overlapping, skills.

Should co-founders have the same equity stake?
If you asked me this question before my first startup, I would have said why not? Now that I have launched some startups, I would say there is no reason to have co-founders have the same equity stake. Most co-founders decide on the equity structure in a very arbitrary way. If you’re interested in more details about this topic, I recommend a very good book called The Founder’s Dilemmas.

I came up with a formula to make determining equity stakes easier:

Let us say founder A and B both start at the same time with similar value-add. Founder A is going to be the long term CEO while Founder B is going to be the VP of Engineering.

There are two parts to the equity:

  • Founder’s Part
  • Skills Part

Founder’s Part – This should be the same for both. If they started at different times or brought different contributions, that should be adjusted accordingly. But in our example, they’re even.

Skills Part – A CEO in a high-tech may get about 6-10% of the equity post Series A (when a VC or some accredited investor puts the money into company) while a VP of Engineering may only get 2%. So take this to pre-money level and assuming 50% dilution, it will be 12-20% (assume 16%) for the CEO and 4% for VP of Engineering.

Therefore 20% is based on skills and 80% is based on founding status. Founder A will get 16+40 = 56% while Founder B will get 4+40=44%

This is not the only way to do it, but it is something I have seen justifiable.

Can I fire a co-founder?
A company is a separate entity from the founder, and that relationship becomes even more separate when outside money is raised. If one of the co-founders is not performing or is being disruptive or unethical, you should definitely consider getting rid of him or her. However, never ever do this for wrong reasons, like depriving co-founders of their equity. Also, if and when you end up firing a co-founder, please do it with dignity. Everyone should be able to maintain their dignity in the process.

Conclusion
Deciding how many co-founders you need, who to bring aboard, and how to distribute equity all depend on your individual skills and the gaps you need filled. Whatever choice you make, be sure everyone is clear about their roles and agrees on the overall goals for the company.

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