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The Parallel Lives of Open Source and Social Networks

Early today, just after my morning run, my brother forwarded to me an article from the NYT about making money with Open Source software. For many in the tech community, this is a bit of old news. The summary version is that you really can’t make money with free software. Stated simply, people want something to help them get their job done, not free software. Think about names like MySQL, Drupal and yes SugarCRM, all fit into this category.

About 10 minutes later, I am scrolling through my Linkedin feed, another morning ritual, and there is an article, referenced by a connection. The article is about how Linkedin has “Lost its Luster”, the theme, hit the nail on the head. Linkedin has unfortunately, progressed from one of the most valuable social networks to business professionals, to almost ‘just another network’. More people, more noise, more content, we need more filters, rinse and repeat.

How are these Topics Related to Each Other?

In order to survive, progress from ‘free’ to making money, both of these business models pissed-off a great many people. In the world of open source, the idea was to rally the troops to build something cool, that is open and available for everyone to use. Then, it did not quite work as planned, to quote the NYT article:

Get a software project going that outsiders can work on, and with your own team sell proprietary stuff that makes the open source project actually useful.

In other words, open source basically follows the 80:20 rule of developing almost anything. You can get just about there, but the ‘spit and polish’ required to go mainstream takes a bit more effort than anyone wants to put into the software. Then people change jobs, when they leave, you realize that the enterprise <something> is running on a 10 year old Dell Server under a desk. The management team is now jaded on open source, and that is something very hard to over come. The company, who “makes” the software is trying to figure out how to make money. They throw it onto the cloud, spend money to polish it up, rebrand it a little, sell subscriptions, support services or consulting services and now it makes money… except, all the people who helped get it to that point are yelling and screaming in IRC ‘how dare they’!

What About Social Networks?

While the article I reference above, and quote below, talks about Linkedin, it could be stated (and has) about Facebook, Twitter, Pinterest or Google+.

LinkedIn is successfully manipulating me. I’m spending more and more time on the site, viewing more pages, contributing more data (including data about other people) and ultimately driving up LinkedIn’s advertising revenue. At the same time though, LinkedIn is delivering less and less of what made it valuable to me in the first place.

The way in which these Networks grew up was to slowly gain trust and encourage you, the user to add more and more data, spend more time on the site and then WHAM! advertising, gamification, strangers trolling, unwanted solicitations, er connections. The same people who helped to build of these networks are now disenfranchised, annoyed and they are yelling and screaming in Skype ‘how dare they’ – oh, the irony.

The summary version is that Facebook announced its numbers yesterday and they tell an interesting story. Looked at from a yearly perspective, $11B (yes, B) in annualized advertising revenue 1/6 of the total Television advertising number. These platforms, whether we are talking about Open Source or Social Networks were built by the early adopters, but they were not meant for us. In the open source world, there will always be the purists. However, mainstream business really just wants something that works and they prefer not to have to build it themselves – sorry. In the world of social networks, just deal with it, complain if you are paying, or move on – obnoxious, maybe.

Yes, I had my own small part in both, but I learned a lot, so it is ok. I disconnected FourSquare, yesterday, no interest in Swarm, but I like Slack. This is all about value exchange, and I will continue to play, learn and adopt or adapt as needed. I will skip Snapchat, dabble on Instagram and well…see what comes along next. One additional point, one of the biggest differences between the first Internet bubble and where we are now, is that companies can now quickly spin up servers in the cloud, which by the way, is all based on OS. Open Source enabled a whole generation of innovation (including many of the Social Networks referenced), we cannot lose sight of this point.

(x-Published on Linkedin)

Burlington Free Press gets a ‘C’

I read with interest the article, “An F for business friendliness?” As a person who seems to dance between being a small business owner and an Entrepreneur, in Vermont, I do see the issues, feel the struggles and I am very aware of the landscape. As someone who helps companies from all over the world to interpret data (Big Data, Little Data), the headline simply missed the mark and the article tells an incomplete story.  Full disclosure, I am not a subscriber to the Burlington Free Press, so it is possible that I am not qualified to give them a grade. That said, the data science behind the article is also a bit loose, and the company does not do business in Vermont.
 
The article takes a cue from an Economist article, which references data from the original Thumbtack data, that unfortunately compares data from different years. While the BFP article did recognize this point and did highlight the fact that Vermont was excluded for 2013 and 2014 because it did not reach the threshold of 30 responses, it missed one important element, the reason why. By the 2012 standards, Vermont did reach the threshold in 2012, of 10 responses – a different threshold. Is 10-30 respondents from 2012 statistically significant enough to warrant a 2014 headline? (It could be more than 30, but we would need to ask).  Why was the threshold changed?
 
Thumbtack seems like an interesting company, but they do not do business in Vermont. This is a significant data point, as the survey methodology described selects from users to their website, and randomly offers a link. However, if they (Thumbtack) do not do business in Vermont, how valuable can a respondent from Vermont be? (Honest question, I do not know the answer). The analysis suggests that the Vermont response rate was “inline with US population”, but is the state by state analysis statistically significant? (Only a handful of states did a deep dive on the regression analysis).
 
The science in general does seem sound for the US in general and for some larger states, granted. But, it all needs to be put into context. I would encourage a review of the Kauffman data (PDF), specifically the 2013 Entrepreneurial Index data and the 2011-2013 running Entrepreneurial Index data. The prior puts Vermont middle of the road (almost exactly) and the later put Vermont in the top third, or higher.  My takeaway, that trends are important, as noted by the Kauffman study.
 
I am not going to look at this through rose color glasses. Yes, Vermont has some things to fix, all states do (It could actually be a Marketing problem, another point made by the survey results). But, an F, I am not so sure about that. In school an ‘F’ suggest a student incapable, Vermont does have both an Entrepreneurial and Small Business economy, an ‘F’ would suggest this is not possible. The point of data is to create actionable insights and help people to change. Is it more important to change the perceptions, or the realities?
 

BTW – Why did I suggest in my title that the BFP gets a C? Because it is average – it does just enough of the work to get the job done. I am not really qualified to give it any other grade…

Freshdesk Attracts another $31M in Series D Funding

I do not typically write about IPOs, or funding or things of this nature. But, this is interesting for a number of reasons,, in a space I do watch carefully. Yes, Freshdesk has 23,000 customers,  10,000 in the past two quarters, across 175 countries, what is fascinating is that they made it to this point with a very small team in the US, and no team on the ground (as far as I know) in 160+ of the 175 countries (I need to verify this, and will) even then the team in the US is new. If you want to see more press worthy coverage, TechCrunch covered the news this morning as well.

Another interesting tidbit is who participated in the round of funding; Google Capital and a strong show of support from the current investors, as the current round was actually led by Tiger Global Management and Accel Partners. But, Google Capital makes different kinds of investments – late stages than Google Ventures, the two should not be confused. taken from their own blog, a few short months ago:

Like our colleagues at Google Ventures, our goal is to invest in the most promising companies of tomorrow, with one important difference. While Google Ventures focuses mainly on early-stage investments, we’ll be looking to invest in companies solely as they hit their growth phase. That means finding companies that have already built a solid foundation and are really ready to expand their business in big ways. We’ll look across a range of industries for companies with new technologies and proven track records in their fields. Our investments to date include SurveyMonkey, Lending Club and Renaissance Learning—with many more to come.

Then there is the space, customer service, support, and helping to manage customer expectations. We need (the greater we) the ability to provide businesses strong capabilities to be agile and adapt to the needs of the customers. Zendesk went public, SugarCRM is knocking on the door and many others have been scooped up by larger companies, RightNow, Desk, just to name but a couple. Is this about subscriptions,  customer service and support or something different? In the end, (having just come from the SDL Innovate Conference), companies need a holistic view of the customer, from as many angles as possible and it must not require the moving of mountains to allow these system to speak to each other. 

Freshdesk is aligning itself will to attach this space.  What will they attack first? Going up market with more seats, investing in their sister products (FreshService)?  Will more integrations with sales and marketing systems be built (hint: I think they should) With this funding in place, watch-out for good things to come, best of luck to them!

 

If you had a 25th hour, how would you spend it?

If you had a few more hours in your day, what would you do?

Seriously, would you spend more time with your family, work more, take more time for yourself. While at a personal level, this might be an unfair question, answer it wrong and you will be sleeping on the sofa! But, for work, your job, what would you do with an extra hour in your day? Now, it is a bit of trick question, you cannot really take more time for yourself. So, what do you do? How about spend more time with customers, partners and the important people. What if this also involved getting a quick workout in?

For DRI, Reebok is a client, a partner and just a lot of fun! Spending time inside Reebok is a pleasure. A great atmosphere, great people; the energy is almost palpable. One of the things I learned quite quickly; don’t schedule a meeting during lunch, everyone is working out. The second thing I learned, partners are really important, something I wish more companies would learn. The training team at Reebok had some basic technical requirements, but all they really wanted is more time to talk to athletes, people, human-to-human.

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The reason for program is to more tightly align and coordinate participants within the Reebok ecosystem. The important piece to remember is this is all part of marketing – relationship marketing. This is about listening; communicating, facilitating and helping people to more deeply understand the brand. There is no sale, no lead and it is not customer service, but is customer experience (sit on that one for a bit). Some of the things the team does may feel like customer service, but it is about relationships with people, at a very personal level. At the core, it is not about an individual, it is about what two people and teams of people can do together.

The starting point of the project was a focus on data. Data. Data needs to be accurate, sharable and is dynamic. Different people have different needs, but that does not mean everyone needs their own copy of the data.  Yes, Reebok works with athletes, trainers, advocates and friends of brand. What this means is that while we used a CRM platform at the core, to manage the information, this is not about pipeline, marketing automation (yet), nor customer service. This is about giving people time back to focus on the relationships. In the digital age, with the focus on Twitter, Facebook, Instagram, Snapchat, Vine, YouTube – it is amazing what a personal touch can do – you know, a phone call, or heaven forbid an in person conversation!

If you would like to learn more about how DRI is working with Reebok, feel free to give me a call! (Or email, if you like).

Pitching a Startup, Vermont Style

In Silicon Valley, you have the well-known and lesser know hotspots – From Buck’s to Quattro. In Boston, the locations are harder to pin down, not quite the same culture. But in Vermont, we get it done on the ski slope (or in the pub, with a micro-brew!  On March 6th, 2014 Peak Pitch Vermont will be held for the 9th time at Sugarbush Ski resort. My personal interest,  a healthy entrepreneurial ecosystem in Vermont. I am on the Advisory Board of StartupVT and enjoy the energy within the startup scene.

In preparation, since I have not been before, I needed a good way to learn about the Startup scene.  As part of StartupVT, I started doing podcasts with Cairn Cross of Freshtrack Capital and decided to extend that with a Q & A specific to Peak Pitch.  I plan to follow it up a similarly formatted post taking some points from Cairn’s partner Lee and it is already interesting to see the differences (I cheated, I have Lee’s answers).

Yes, this is a bit of a promotion – but not for a product, service or otherwise. It is a promotion of Entrepreneurship, learning new things and, well, hitting the slopes. I do plan to bring a long my new GoPro camera, for some filming, a perspective on VC pitches probably not seen before…stay tuned!

Here is a YouTube Video