Posts from Microsoft

How To Be In Business Forever: Week Two

First we'll take care of some logistics and then we'll get to the post of the week in my Skillshare Class on sustainability in business.

Office hours will take place at 6pm eastern today. The link to the hangout is here. I don't like the way office hours worked last week and so I am changing them up. I will start by asking people to post questions in this discussions section. Then I will review a few business model canvas projects live for everyone to see. Then I'll finish up the 30 minute session by answering as many questions as possible while time lasts.

There are roughly 80 business model canvas projects posted so far. You can see them here. Since I will only be able to review a few of them today in office hours, it would be great for anyone who is taking this class to stop by and pick a few to give comments on.

If you are looking for a web-based tool to build and share your business model canvas, this thread mentions several of them.

OK. Now that we are done with the logistics, I will move on to my second post in this series.


Last week we talked about long term thinking vs short term thinking. But sometimes, no matter how long term you are thinking, things happen that you didn't plan for and they can impact your business. Actually, this always happens. And that is when you need to adapt.

You will not stay in business forever if you don't adapt to changing market conditions. This doesn't mean adopting the "business model of the hour" model and this doesn't mean pivoting either. What I am talking about is the once every few years "oh shit moment" when you realize that the path you are on isn't going to work in a year or two and that you need to make some changes.

This is a frustrating realization. I have a good friend who has been running a business for more than a decade. He told me a few weeks ago that he thinks the market he has been operating in is changing and it is starting to impact his business. And just when he had everything firing on all cylinders.

That's how it is in business. Just as you are taking the victory lap for the kickass execution you and the team have delivered, the track takes a tilt and things start getting harder. Businesses don't operate in a vacuum. They operate in a dynamic ever changing market that is going to make things difficult for you, especially if you want to be in business forever.

I think some examples will help. The one that comes to mind front and center is Microsoft. By the middle of the 1990s, Microsoft had it all. They had a dominant share in desktop operating systems and a dominant share in desktop apps. They were literally printing money. Then the commerical internet happened. Netscape showed up. And Microsoft's market changed, forever.

Microsoft did adapt. They built Internet Explorer in reaction to Netscape and then used their desktop dominance to push it into the market, hurting Netscape so badly that it had to sell to AOL. That got Microsoft into trouble with the Justice Department and they were investigated as a result.

But what Microsoft didn't see in 1995 was Google because it didn't exist. And they didn't see the emergence of cloud based productivity apps because they didn't exist. In hindsight, it is pretty easy to see how fundamentally transformed Microsoft's business has been by the Internet and it is also pretty easy to see that they have not been able to adapt sufficiently to maintain any semblance of the dominance they had in the mid 90s. This stock chart tells you everything you need to know about what the Internet did to Microsoft. They may be surviving but they are certainly not thriving.


Another great example is RIM. I don't even need to tell this story. Everyone knows that the dismissive tone and stance that RIM's management took toward the iPhone and what it represented was essentially the death knell of a great company. I suspect they wish their stock chart looked like Microsoft's.

But let's look at a more positive example. As Ron Ashkenas points out in this HBR article, IBM saw that the hardware market was changing and their competitive position in it was changing with it. They sold their PC hardware business in 2005 to Lenovo and doubled down on consulting and related services. Their stock chart tells the rest of this story.


Adapting doesn't always mean exiting a business that you decide has issues. You can also retool, reshape, and refocus the business. A company that I've worked with for more than a decade saw the industry it services go through some painful transitions in the 2008/2009 downturn. They built an entirely new line of products that service the growth part of the industry while working to maintain the older products through an orderly and gradual decline. It's been a difficult transition because it has meant that the company's top line hasn't grown during this transition. But the company is still in business and the new products are growing quite nicely.

Every situation is different and I don't have some "silver bullet" to help you all think about how to figure out when to adapt and when to stay the course. But I do have some observations. The comfort of a strong balance sheet (and a nice looking stock chart) is often your enemy not your friend in these situations. The most agressive CEOs I've seen in these situations are often the ones with less than a year of cash in the bank and survival instinct in full on mode.

Another observation is that getting your organization to adapt is harder than you might think. Organizations have inertia. The bigger they are the more inertia they have. If you think you need to adapt your business quickly, you will need to figure who is in the boat with you and who is not and make the changes you need, particularly on your senior team, to align the team with mission and get going.

Finally, you cannot be in adaptation mode all the time. If you map out long living successful businesses, you will see they go through periods of great stability followed by periods of great change and then move back into stability mode. You have to know when to get into which mode and you need to see each one through to its logical conclusion.

Given how hard all of this is, you might wonder if you really want to stay in business forever. The answer may be no. But even if it is no, you had better plan for and act like you do. Because I am certain that if you don't, you won't.

#MBA Mondays

Skype Out

My friend @David asked me to revisit the post I wrote about Skype spinning out of eBay back in the spring of 2009 in the wake of the news that Skype is headed into the hands of Microsoft. David quotes this part of that April 2009 post:

But the best thing about this is getting the asset back into the hands of the entrepreneurs who created it and built it. We all saw what happened at Apple when Jobs took back the reins of the company and I suspect Niklas and Janus would not be thinking about this if they didn’t have a strong strategic plan for Skype.

I’ve said this many times on this blog and I’ll say it again. Big companies mostly mess up entrepreneurial companies when they buy them and it really is best that companies like Skype stay independant and run by their founders if that is possible. And it looks like that might be possible with Skype. That makes me happy.

We all know that Niklas and Janus were unsuccessful with their bid for Skype. And it is entirely possible that Microsoft will not end up owning Skype. There are plenty of rumors that don't actually come to pass.

But it is equally clear that Skype is very likely headed toward some form of corporate ownership. And my hope that Skype could stay independent will not come to pass.

When Niklas and Janus failed to conclude their attempted purchase of Skype, it traded into the hands of Silver Lake Partners and a group of other investors. This investor group initially tried to keep Skype independent by virtue of an initial public offering. Skype filed to go public last year but the offering never came.

In the past six months, something changed at Skype and now we see the end game is a sale to another corporate owner. We can speculate on what those changes were. Maybe the public market was not that receptive to the offering. Maybe the company was having difficulty growing its revenues as fast as the public markets wanted. Maybe the investors lost confidence in the management's ability to continue to build and grow Skype as an independent company. Whatever the reasons, Skype's experiment with being independent is over and I am disappointed.

We use Skype every day in our office. It is our videoconferencing system and increasingly our phone system. It works amazingly well. Recent UI changes to the new client have been frustrating. On a Skype conference call yesterday, we were all lamenting the loss of the old client where we knew where everything was. Skype brought VOIP to the masses and I'm very certain that someday we will all be communicating by voice and video over IP, maybe via Skype, maybe be other services. It is the future for sure.

I'm not particularly inspired by the idea that Microsoft will do something great with Skype. But I do think they are a better corporate owner than eBay. The second acquisition of Skype isn't likely to change our daily usage of the service. But it may be an inspiration to VOIP entrepreneurs everywhere to think big and create new services that can someday be as big or bigger than Skype. And that's a good thing.


Windows Phone 7

As I finally migrate my entire contact database (after some serious cleaning up) from Outlook and into Google Contacts, I am sitting here thinking that Microsoft may be getting its mojo back.

I'm done with their productivity suite. I left Outlook mail for gmail a few years ago. Left Outlook calendar for google calendar shortly thereafter. I've left Excel and Word for Google Docs (mostly) and now my contacts are headed to Google too. Then I will be once and for all done with the twin beasts called Outlook and Exchange.

But I am starting to consider other Microsoft products. We've got two xboxes in our home and a Kinnect is coming soon. I've been using Bing more and more. And now I am about to get a Windows Phone 7 device. It was a comment on this blog that got me to do that (I also love their ads).

Windows phone 7 comment

I'm totally into my Samsung built Nexus S so I just found an unlocked Samsung Focus on eBay and it is coming my way. I'll use it for the next few weeks and then pass it around our office for others to try out.

Windows phone 7
I'll be curious to see how well Windows Phone 7 supports the google productivity suite. If Microsoft really wants to be a player in mobile, they have to ditcch the idea that everything revovles around their productivity suite which more and more people are leaving for the google apps.

But I am totally taken with the idea that the contact book on your mobile device should be the central organizing principal and all the social apps/nets you have should plug into that. So I'm going to give Windows Phone 7 a spin. I'll let you know how it goes.


What Blackberry Is For Outlook/Exchange, Android Is For Google Apps

My friend Wil Stephens posted his thoughts on his first day on a Nexus One just now. If you click thru and read it, you'll note the similarity with the review I posted last week. I am not suggesting Wil was influenced by my review, I'm simply pointing out that we've had very similar experiences and both of us moved over from a Blackberry Curve.

In Wil's review, he says:

Cube, like many companies I guess by now, have Gone Google. My Calendar, Mail, Docs, Contacts are all hosted on Google. This made the setup and transition to the Nexus very easy. I entered my Google credentials and within seconds, my mail, contacts and calendars were all synced up and ready to go. Which, unintentionally or not, makes this a seriously good business phone.

I've spent the past year migrating from Outlook/Exchange to Google's Apps. I've done it gradually, in fits and starts, as our firm is still on Exchange. But I just could not get Outlook or any other Exchange client to scale to the size of mailbox I operate. And so I had to move to a more scaleable solution. That solution was Gmail and now that I've been on Gmail for almost a year, I am so happy.

Most people and companies move to Gmail for different reasons, mainly cost. But regardless of why this shift is happening, it's a very important one to pay attention to. Because it leads to other changes.

Like what phone you want to use. Blackberry is the perfect phone for someone with an Exchange setup. The Blackberry Enterprise Server for Exchange is a great product. If you run that alongside your Exchange server, setting up a Blackberry to be a full blown Exchange client with mail, calendar, and contact sync is a breeze. That's how we've been doing it at the venture firms I've helped manage for over a decade now.

But as Wil points out, if you are on the Google App suite, turning on an Android phone is even simpler. You simply login to the phone with your Google credentials and you are done. And the native Google apps on Android are extremely well done.

So, for good and for bad, I believe Blackberry is attached at the hip to Exchange. As Microsoft loses share to Google in the enterprise, something I believe is bound to happen, Blackberry will lose share to Android as well. Wil and I are cases in point.

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