Posts from February 2004

Recognizing the Obvious

The race for the democratic nomination is over. John Kerry is going to be the nominee.

He’s my third favorite after Clark and Edwards, but he’s the favorite of most everyone else judging from the results so far and the poll numbers in the next three states, Tennesee, Virginia, and Wisconsin.

By Feb 10th, Kerry will have won big in the southern states of Tennesee and Virginia, where Clark and Edwards are likely to make their last stands. On the 17th, he will win big in Wisconsin which is the place Dean has said he’ll make his last stand.

I am not sure it will actually go that long before the Dean, Clark, and Edwards campaigns throw in the towel. It’s hard to keep these campaigns funded when the contributors know who is going to win. Nobody likes to “throw good money after bad”.

Is such an early victory good for the Democrats? I am not sure. Kerry is a “known quantity” so its not like we are taking a risk with someone who hasn’t been battle tested. But the overwhelming media attention that the Democrats have been getting has been in parallel with a significant slip by Bush in the approval ratings. I think there are a number of reasons for Bush’s problems, many of them self imposed, but the spotlight of the media on Kerry and the other attractive Democrats like Edwards and Clark, and their attacks on Bush, are also an important part of the slip in the ratings for Bush.

If the campaign ends this week or next, how are the Democrats going to stay in the spotlight? I don’t know.

And the Bush smear campaign will start in force now that they know who to smear. That worries me.

All I can say is those of us who want someone who values policy over politics, truth over lies, and friends over enemies should get behind John Kerry now and don’t stop working for him until the election is over in November.


ASP vs. License

I have to say that I’ve always been a fan of subscription business models (the ASP approach) and dislike lumpy revenue streams (the license approach). But my favor for the ASP approach is tempered somewhat by the difficulty that all of us in the venture business have had making the ASP model work. And there’s a lot of money that’s been made over the year’s with the license approach. The ASP is not easy to execute and takes more capital to get to breakeven. There are trade-offs and the best may be a hybrid model where you give the customer whichever flavor they want.

Ross Mayfield (yes, i am linking to Ross two posts in a row) has some good stuff from the Enterprise Software Summit on this issue. The churn issue in particular is one that I haven’t heard enough about.

#VC & Technology

Customer Obsessed Companies

That’s what I want to invest in going forward. That’s where you can make money. It’s going to get harder and harder to build value in core technologies that have broad horizontal markets. The value is going to get created in providing technology-enabled solutions for customers. And if its the customer that matters most, instead of the technology, then I want to invest in customer obsessed companies, not technology obsessed companies.

I was with the CEO of a company that I’ve invested in today. He is about to close a round of financing and start to invest in people and resources to grow the business. He was asking me where he should focus most of his energy and talent and hiring in the next 6 months. I told him in the customer facing side of the business and in particular account management and customer service which are the “eyes and ears” of the organization and in product management (the “soul” of the organization) to synthesize this feedback into new and better products.

I was reading Ross Mayfield’s notes from the Enterprise Software Summit today and he quotes extensively from the panel on “White Spaces in Enterprise Software“. While he doesn’t give us any insight into new emerging white spaces, he does talk alot about customer obsessed companies. Maybe customer obsessed companies are the white space in enterprise software.

Ross says:

Build your organization around your customers. Only 10% of it is technology, creating efficiencies comes from this focus, the people, business processes and business rules.


Why are 80% of CEOs claiming its (the it being customer service) the top priority while only 40% are surveying their customers on a regular basis? Most CEOs visit the customer service center when it opens or closes. The average CSR gets 5 hours management attention per month. 56% of consumers believe good service as the greatest impact on customer loyalty, the largest factor. Good service can make up for product problems and provides differentiation in commodity businesses. 80% of consumers say customer service has a major influence on their impression of a company, 85% would drop a product after a bad experience, 56% have stopped using one. The younger the people the stronger the response. Loyalty, revenue, reputation and market share can be easily taken away.

I like to say the way you start a company is you build something for not a lot of money, sell it to a few brave customers who you then develop deep relationships with, listen to them very closely, follow their lead and improve your product and develop new products around your customers feedback, and soon enough you’ll have a good business that will be profitable and loved by its customers. It’s not easy to do but that’s the model I like best.

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Pining for Kinja

I suppose that headline shows what a geek I am, but I really do want a great browser-based RSS aggregator. I’ve tried Bloglines and it just doesn’t do it for me. This is an exercise in a great UI and Bloglines isn’t what I am looking for.

One of the seminal experiences of the web version 1 for me was MyYahoo. I saw it and fell in love immediately. It’s my real time newspaper and Internet start page and has been since it was launched 8 years ago.

Well MyYahoo now offers an RSS feed for MyYahoo. And its pretty good. But all it does it let me add blogs as headline sources to MyYahoo. A major improvement, but not exactly what I am looking for.

What am I looking for? Well, for start a recommendation engine. A search field. An index. Technorati-like popularity ratings, but by category. All in a great UI.

This list by David Galbraith captures most of my wish list. iTunes for blogs is a great metaphor.

I hope Kinja gets it right. Because I need it.

#VC & Technology

Longing For Arthur Rock

Dana Blankenhorn at Moving Picture is longing for the old time VCs like Arthur Rock to come back and start backing great long term ideas again.

It’s a good criticism of the venture capital business. But its not really a lack of investment capital that’s the problem. The $18bn that we invested in 2003 will probably mark the low point in the VC investment cycle. There are so many signs that the business is heating up again that I can’t imagine we are going any lower.

The criticism that Dana makes that really hits home with me is the lack of patience with the great investments and the lack of courage to write off the losers and free up time and money to find interesting new things.

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