SQL Musings : Business of Software

The Twitter Ripples

Steve Jones — Thu, 23 Apr 2009 15:04:00 GMT

I saw this post on The Business of Software Blog about a use of Twitter to spread the word for a marketing guy. As an aside, I attended the 2008 Business of Software conference and it was outstanding. I’d recommend it to anyone in the software business.

It’s an interview with Dan Nunan, with whom I used to work, and it talks about how he handled a recent trade show. Pressed for time, they created a reconstruction of the Huson River plane crash that had occurred recently. What’s interesting, is how he used Twitter to spread the word and have a fairly wide reach.

It’s unclear if it was successful, and I think for many marketing efforts it’s a cumulative effect over time that determines if you’re successful, not the immediate response. Still I think it was a creative use of the medium, and a recognition of how the ripples can spread out from Twitter to mainstream media.

37 Signals

Steve Jones — Wed, 22 Oct 2008 16:03:26 GMT

I thought this was a great talk and interesting to watch. If you build software, I’d check it out He has some interesting ideas and comments and I like his very practical approach....(read more)

Business of Software 2008 - Noah Wasserman

Steve Jones — Thu, 18 Sep 2008 20:24:00 GMT

I'm starting a series of blog posts from the Business of Software conference that I attended last week in Boston. If you are part of a small technology business (software, hardware, etc.), especially if you are an owner, I'd highly recommend that you attend this conference next year. It's small, 250 or so people, and everyone is interested in business. It's not a lot about technology, but it's inspiring and exciting to talk about business with lots of people looking to build their businesses.

Joel Spolsky introduced Noah as one of the few people whose programs that he graded as a Teacher's Assisstant in college that he remembered. With that introduction, Noah proceeded to say that he's moved completely away from programming and is a Harvard Business School professor.

His talk was about being rich or being a king in a company. I wasn't sure what to think of the talk from the description and title, but I have to say I really enjoy it. Dr. Wasserman has focused on learning more about what makes private companies succeed or fail, and a lot of it from the view of the founders. He researches both small and large companies, but all private, and tries to identify things that can help predict, or even prevent, failure or success.

The talk flowed nicely and I enjoyed his style. He's definitely engaging, interesting, and a good speaker. If you get the chance to see him, take it.

He started by asking how companies get formed. Typically it's one of 4 ways:

Go it alone
Start with family
Start with friends
Start with strangers

This is one of the first fundamental decisions that you make as a business owner. I know I've gone through it, both with family and strangers and it definitely makes a difference. He talked about how it's often harder with friends because you know each other and that affects your decisions.

From there he went through some of the other decisions you make. Once you have the founders, you next need to decide how to divide up the ownership of the company. You can do this as equal or not equal. He presented some research that showed dividing things up equally doesnt' work well. A few successful companies, like ZipCar, have had issues with not all founders doing equal work, but having equal ownership.

It's interesting to hear him talk about how unequal shares are made. Could be based on exsperience, on the job you'll do, on initial funding, or something else. He talked about the difficulties of talking this out, but it seems important to help the company grow up. Equal ownership seems to not be the best way.

He had a lot more to say, especially about when companies get bought. Interestingly enough, once you start to take some funding from VCs or investors, often the founder gets replaced if he does really poorly or really well. Only a mid level of success allows the founder to remain "king."

I stopped taking notes because I enjoyed the talk quite a bit. You can follow Dr. Wasserman's work at founderresearch.blogspot.com

Business of Software 2008 - Richard Stallman

Steve Jones — Wed, 17 Sep 2008 20:11:00 GMT

I was kind of excited to hear Mr. Stallman speak. I've read about him for years, and I agree with some of his thoughts and opinions, and I'm glad he's out there working on free software. But I have to say that I became disapointed quickly and it wasn't a good talk for one simple reason.

The crazy came through.

He talked about software patents for an hour. He had examples, and he'd thought out his position, but he stammered here and there, didn't have any slides (Powerpoint being a horrible piece of closed software) and he pounded the same thing home over and over. And the crazy shown through, which diluted his message.

That and his abrasive, bordering on rude, delivery. And it's a shame because he has a good message. He pointed out many of the problems with software patents and the difficulties with being able to develop software independently. If you have any sort of success, you might easily run afoul of someone that claims a patent on your idea. He games examples of the gzip/pkzip fiasco and a few others. He showed how hard it is to find a patent, decipher the filings, and even the problems with patents that are under consideration. All pose problems and Mr. Stallman is right, we need to do something.

However he's not the person that should lead this fight. He doesn't come across well.

Business of Software 2008 - Selling 101

Steve Jones — Tue, 16 Sep 2008 19:12:00 GMT

I wasn't sure what to make of this session when it started. Paul Kenney, a sales trainor from the UK, was giving a talk on selling 101. Since I am like most of the geeks out there, and don't like selling, it was good to hear Paul take a different approach. He talked to us at our level and I think won a few people over. I know he won me over.

Paul started by having everyone stand up. No one wanted to, but his enthusiasm got us up. He then asked a series of questions, having us sit down if we disagreed (or agreed, can't remember now). In any case, he asked some standard things like "who likes being sold to", "who could sell something they believe in" and a few more. The answers are probably what you expect: most of us don't like selling or salesman.

Paul then proceeded to say that he thinks we haven't encountered many good salesman. He then told us that a salesman can really help you, but they have to be properly trained. I was skeptical, as you probably were, but Paul won me over. He gave a few examples that really helped.

The first was a doctor situation where a new drug was being marketed to help people with osteoperosis. The drug was more effective with fewer side effects, but also more expensive. Insurance companies didn't want to pay for it, and doctors had ot prescribe it. In showing the literature and test results, most salesman weren't effective. A few were, and the doctors and patients were very pleased with the results. What was different?

Paul asked us and people had theories, but the result was that those salesman made it personal. Rather than framing the drug as it will help some people, or old people, they framed it as "it will help Mary, your 70 year old patient." By showing the results to specific people, the doctors were more willing to listen.

Playing on emotions? A bit, but also framing the product correctly. Sometimes people are too busy, even to hear about something that is beneficial and a salesman helps facilitate a good dialog. A second example about a hightly specialized piece of drilling equipment showed a similar result. Even though companies needed a lot of expertise to use the product, a good salesman helped.

From there Paul talked a bit about finding the right salesman. He stressed the need for training, but also that you need different salesman for different types of sales. As the sales cycle becomes longer and more involved, you need a more skilled salesman. There ended up being 3 types he sees, the ones that can close quickly and take orders (low skill, low complexity). A medium skilled one that can get to know customers and make them feel confortable, but doesn't take forever to close, and then a long term salesman that can work with customers over a year or two to close a deal. It takes different people to do those jobs. A long term salesman in a short term situation doesn't know how to close quickly and move on (or let the deal go).

It was an interesting talk, especially for the end of the day slot just before happy hour. I think people really enjoyed it and I let Neil know that Paul is a speaker to bring back next year. If you need sales training, he's at www.oceanlearning.co.uk.

Business of Software 2008 - Pecha Kucha

Steve Jones — Mon, 15 Sep 2008 15:42:00 GMT

I had no idea what this was about, though I'd read the description. It encouraged you to submit 20 slide, getting 20 seconds for each, for a total presentation of 6:40. Sounded hard, wasn't sure what I'd present on, so I decided to watch.

The list of Pecha Kucha contestents was wide and varied and each had different messages. Each had their slides automatically advance every 20 seconds and they should see their slide on a monitor in front of the audience (down low) along with a countdown timer. Still their ability to make the presentation move with the slides was hit and miss.

The first presenter was Alexis Ohanian, and he obviously practiced and rehearsed his presentation as he was having his lines (many of them funny), timed out very well with the slide changes. He went for a humorous presentation, somewhat making fun of how to build a company. He had roaring applause and I think that this tact makes the most sense.

Jashon Cohen, on Agile Marketing wasn't bad.

Larry Port - Launching with no money was pretty good as well, and had good ideas.

Bob Pritchett - He tried to be funny, talking about firing someone when you needed to, but it didn't work out. It was a blend of serious and funny.

Lou Franco - Evaluating your engineering funnel, I was starting to tune things out here.

Jack Zoellner - On the fact that people matter, too serious and not funny enough.

Johnathan Mercer - A very dry, math filled presentation. Timing wasn't great.

Steve Holdenberg - On sales, it was a little too serious and didn't work out well. His timing wasn't great.

Let me be fair to say that I enjoyed the first 3 or 4 and they were pretty good. The first presenter was obviously much better than everyone else, and that meant that things went downhill, but still the pace was quick and it was neat. There is tremendous pressure to talk for 20 seconds a slide and if you don't believe it, try it at your desk sometime. It's tough. Kudos to everyone for giving it a try and I'm somewhat challenged, excited, and nervous about giving it a shot next year.

I think 8 was too many to run at once. It would have been exciting to have one or two go in between a few sessions, and then give us a break. I'd also ask for a audition so you can schedule them in a good order. The hit and miss aspect of it means that people might not really enjoy some of them and you want to balance that out. I think auditions would also help in choosing the people to compete.

Business of Software 2008 - YCombinator - Jessica Livingston

Steve Jones — Fri, 12 Sep 2008 20:32:00 GMT

I was really interested to hear this talk, and then incredibly disappointed at the end. Honestly I felt that the entire talk was a plug and summary of her book: Founders at Work. I did download the sample chapter for the book and it was interesting. I ended up buying it because I like those real life, biography type books, and this is one, with interviews with some successful founders of companies.

Along with a couple others (Paul Graham and Trevor Blackwell ), Jessica runs Ycombinator, an incubator that funds very early stage startups with small amounts of money to see if they can develop a business. These are small amounts of money, like $5000-$2000, not enough to really survive on, but it might buy ramen noodles for awhile. They take small stakes (2-10%) and a couple of their companies participated in the conference.

Her talk centered around some basic ideas and anecdotes from interviews in her books. A few of the ideas:

Most founders didn't have great ideas. Their ignorance was an advantage and they often succeeded in an area they hadn't expected.
New ideas look bad to most people. If they didn't, someone else would be doing it.
You have to make something people want (obvious to me)
Do not give up! Perseverence is critical. Business is a roller coaster and you have to believe in your success and be determined. It seems that a lack of determination is the #1 reason for success.

Not sure I'd recommend her as a speaker, but there were some ideas worth thinking about for startups.

Business of Software 2008 - Dharmesh - On Startups

Steve Jones — Thu, 11 Sep 2008 19:41:00 GMT

One of the more intriguing talks was given by Dharmesh Shah, founder of Hubspot.com and OnStartups.com. He was also the most disorganized, but I think people really enjoyed it. At one point he stopped and admitted he'd had hardware problems and brought the wrong presentation on a USB stick, so he skipped ahead to an outline slide and asked us to tell us which items we wanted to hear about.

I raised my hand and asked about Liquidity events since I was interested in them. I'd had one, hope that another falls into my lap one day and so I decided to get his thoughts. He said that they were under-rated, in his opinion, and then got distracted. However I cornered him later on at the reception and he spent a little time talking about how he thinks most entrepenuers wait too long to have them, trying to grow and grow the business. He admitted he's a startup guy, someone that wants to continually start companies and so it's a generic play from him. His thoughts are that he would have taken less money and gotten out sooner if he could have in his first company.

We got a bit of history from Dharmesh on his experiences. He started a company in Alabama, proof in his view that you can start a technology company anywhere. Location doesn't matter for most technology companies. He spent 10 years building the company and selling out for a few million dollars. I think it was 5 or 6, but does it matter? In any case, he was tired of it, had wanted to get out, and had decided to go back to MIT. He went back there and got his CS and MBA together, proving that he's a smart guy, not just successful

At MIT, he didn't want to do a thesis, but had to, and started another company, OnStartups.com, a blogging site. He graduated, then moved on to form Hubspot.com.

He offered a bunch of advice for starting a company and they were interesting. I've got some basic notes that I made, somewhat disjointed because that's what the talk was, so I didn't get as well organized. And I didn't write this stuff up that first night. :(

b: Get started, just get moving and start working on your idea. The best idea usually comes along later.

Products

Every startup should be embaressed by their first attempt at a product. They are usually really bad. If you aren't embaressed, you probably waited too long to release it. Not sure I agree with that, but Dharmesh thinks speed matters.

Pricing

Soem talk about pricing models, and that you have to look at the cost of customer acquisition (CCA), the Lifetime value of a Customer (LTV) and if the former is less than the latter, you're OK.

You can focus on increasing LTV in two ways: raising prices and reducing attrition. He feels that reducing attrition is where you should focus your efforts. Dharmesh is in a monthly subscription model, so that makes sense, but he feels you really need to get the data so you are aware of the CCA and LTV numbers. Even if you're not sure what they should be or what to do with then, collect the data.

CHI - Customer Happiness Index, be sure that you calculate the probability that a customer will remain with you for the next day/week/month, etc.

Venture Capital

VC money is relatively expensive, and often not worth it. It's hard to raise, it often causes you to lose some control, and Dharmesh doens't necessarily like it. Do your best to avoid it.

That being said, Hubspot has VC money (along with $500,000 of Dharmesh's money) and he admitted it was a swing-for-the-fences startup. He's hoping to really cash in with this one.

Overall

Overall this was an interesting talk from someone that has had success in starting a business. I'd recommend his blog if you are a startup-type guy.

Business of Software 2008 - A New Type of Company - 37 Signals

Steve Jones — Tue, 09 Sep 2008 21:00:00 GMT

The second talk that I saw was from Jason Fried of 37 Signals. It was an interesting session in that Jason basically spoke for 20 minutes, just some thoughts on his company, and then he took questions from the audience.

He has a very interesting way of running his company. In many ways I think he's the type of business owner that I've tried to be, along with Andy Warren and Brian Knight. He perhaps is a little more laid back, but he's concerned about building a company for the long term, not just developing an investment he can sell. It seems that the "lottery mentality" is still alive and well in the software world and many people are thinking of how they can get someone to buy them.

Instead Jason is focused on building a better company and a better workplace. He wants employees to stick with him for 20 years and is trying out various things to help that. What is he doing?

The Four Day Work Week - 37 Signals has gone to a four day work week for most employees. Someone mentioned support and Jason admitted that the customer support person needs to work Fridays and he helps out on Fridays a as well. However they've found that peope are more productive. This doesn't mean 4 10s, but just 4 days of work a week.
Paying for Hobbies - 37 Signals helps people that work there pay for their hobbies. They are helping one person learn to fly, another with photography. Their goal is to get people to work there for 20 years, not the next year. This means taking care of the person more than just paying them a salary.

There might be more, but I missed some things as I was fairly captivated by Jason's words.

In terms of business, they want to build a sustainable business, selling to companies like them. So they are targeting certain companies, not every company. They want to sell to other small companies, help them be more productive and they focus there.

This also means that they don't always respond to customer requests. One of the specifics mentioned was that Gantt charts have been requested, but 37 Signals, or at least Jason, doesn't believe in Gantt charts. He doesn't think they represent data well and they are an abstraction. They don't represent the real world, but some idea, and that distracts people. So he'll never add them.

Same for personas and spec documents. They don't believe those accurarely model things, they're abstractions and you're not building an abstraction, you're building software. So they start to build software, they do more of what works, less of what doesn't. I like that.

They also don't track bugs. They work on things they need to work on, and they think that developers and customer support people will know what causes problems often and respond to those ideas. They're a young company, but with a few products, and successful. I hear good things about their software, so perhaps some of these ideas make sense.

Business of Software 2008 - Erik Sink

Steve Jones — Tue, 09 Sep 2008 20:08:00 GMT

I have never met Eric Sink or heard him speak, but I have read his blog and things about him in the past, so I was interested to see what he had to say.

He based his talk on the fact that it takes 10 years to build good software. Joel Spolsky wrote an article on this as well, and Eric mentioned it. The premise of his talk was that software is like your kids. There are early years, middle years, later years, and that you need to treat the software differently at each stage. His title: Product Parenting.

He focused on the product manager, the person that must help ensure the product lives and grows and becomes successful. He said that every product needs one, and if you don't designate someone to do this, various people will do it (perhaps unconsciously), and it won't be done well.

He had six stage for software that I'll summarize here, giving you the key idea for each one.

Prepare - The stage before the first release, you find an idea, you are dreaming, and the development team does most of the work, but that's a problem. The product manager needs to find ways to differenttiate this product and develop messaging.

Care -This is the 1.0 release and it's a newborn. You have to get the product out the door, but you can't ignore it. It needs attention from marketing to get the message and launch out there for people to see.

Listen - State 3 is between the 1.0 and 3.0 releases. At this state the product exhibits a bit of its own will, customers will want changes, the product isn't mainstream and you can tweak things, but you want to listen more to the market and customers than start jerking left and right to correct things.

Talk - Stage 4 is the 3.0 release. At this point your product should be mainstream if it's still viable. Most people can use the product and you can ignore the competition. You are either differentiated from them or you're never going to be. At this state the product manager needs to be sure that customers get information about the product. White papers, videos, comparisons, etc. are all needed to be sure that people can easily use the product. Eric mentioned that he didn't do enough of this with his software.

Balance - This is the post 3.0 release and the product may not need things, but customers will ask for them. A product managr needs to steer a bit less and let the product evolve. It's too late to make big changes, and the product will be what it is. Don't let it get ruined with a bad release at this stage (like Vista) and champion quality.

Let Go - The last stage is when the product is mature. Rational Rose is an example of this. It still needs developers and maintenance, but the product is basically done. Move on to the next product and let support handle this one.

Eric has a programmer style of talking, he talks with you and you feel that he's an average guy. He's a bit self-deprecating and talks about the things that he's done wrong with his companies and how things have done and he readily admits to mistakes.

I think it was a good talk, although not exciting or inspirational.