John Radge Blog

Karl Fisch, a high school administrator at Arapahoe High School in Littleton, Colorado, pulled together a powerpoint with some interesting and thought-provoking ideas.

Shift Happens - Did you know?

Karls blog is here.

Michael Wesch is an incredible visionary and is is Assistant Professor of Cultural Anthropology at Kansas State University. His presentation, “Web 2.0… The Machine is Us/ing Us” is incredibly thought provoking and really nails down the fact that we only can estimate technologies advancements but are yet unable to comprehend the affect on every day life.

Web 2.0… The Machine is Us/ing Us

At the end of the financial year I gather up key staff and retreat to a place where quality time can be spent planning. The interruption free environment allows us to throw away what we have done so far, start with a fresh canvas and create the future. There are planning events continuously throughout the year however the financial year end session has a greater bearing as it marks a milestone, gives us an opportunitiy to celebrate successes from the last year, allows us to decompress and reflect and then move on to face the challenges and excitment that the new year will bring us.

To some extent these planning days are structured with a framework generally followed so as to ensure that we arrive at the end of the planning days with outcomes. That said there is a high degree of free-form, as there has to be to engender a creative environment. The Strategy Session framework workbook is available at the link below albeit with confidential material removed.

Strategy Session Workbook here  [Word 166K]

Innovation is the key to the creation of new wealth in economies. Innovation drives employment growth, technological development, business rejuvenation, and global competiveness. Entrepreneurship provides the link between invention, innovation and success. Innovation is the application of the new technology or process to a new product, service, or production or management process. Someone has to do all the hard work between the invention and the innovation and between innovation and the attainment of sustainable competitive advantage - that person is the entrepreneur.

Software companies have innovated in a variety of areas which have spurred other software companies to innovate further. The power of these software industry innovations results from their ability to innovate far beyond the product itself. Consider this list of innovations that an entrepreneur can use:

SaaS, Software-as-a-Service, is a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet. The emergence of the on-demand, SaaS business model and the success of vendors like Salesforce.com makes it an increasingly prevalent delivery model for software vendors.

Open Source refers to any program whose source code is made available for use or modification as users or other developers see fit. Open source software is usually developed as a public collaboration and made freely available.

SOA The days of proprietary architecture are falling to Service-Oriented Architecture which powers Web services-driven new releases, such as SAP’s NetWeaver and Oracle’s Fusion.  A service-oriented architecture is essentially a collection of services. These services communicate with each other. In Service-Oriented Architecture autonomous, loosely-coupled and coarse-grained services with well-defined interfaces provide business functionality and can be discovered and accessed through a supportive infrastructure. This allows internal and external system integration as well as the flexible reuse of application logic through the composition of services.

Global Development. The power and efficiency of outsourced and offshore development services firms, particularly in India, has driven innovation.

Enterprise 2.0 has allowed the rapid adoption of new collaboration and workflow technologies, such as Socialtext’s wikis, to automate tacit interaction. The most common definition of Enterprise 2.0 has involved the application of Web 2.0 technologies in the enterprise. Enterprise 2.0 is the synergy of a new set of technologies, development models and delivery methods that are used to develop business software and deliver it to users. See http://sandhill.com/opinion/editorial.php?id=98

Web Delivery The ability to download, try-before-buying and pay online for software has drastically reduced sales cycles as well as sales and marketing costs.

Mashups. The arrival of the ability to merge applications together to achieve new functionality in a new application. A mixture of content or elements. For example, an application that was built from routines from multiple sources or a Web site that combines content and/or scripts from multiple sources is said to be a mashup.

Google Apps with the launch of new Web-based or open source, Microsoft Office-like applications. Google Apps is a service from Google for using custom domain names with several Google products. It features several known Web applications, including Gmail, Google Calendar, Talk, Page Creator, and Docs & Spreadsheets.

Pricing Models. The rise of subscriptions, ROI pricing, shared-savings pricing or other value-based pricing options

Hybrid Models. The usage of multiple pricing, delivery, marketing and development options in a single organization has allowed substantial differentiation.

The ANZA Gateway to the US Conference was held over 3 days in late October 2006 at Silicon Valley’s newest incubator facility Plug and Play Tech Center in Sunnyvale. For a start-up in the SaaS space the setup at the Plug and Play Tech Center would be ideal. Shobeir Shobeiri, the Business Relationship Manager for Plug and Play Tech Center, showed me around. Typically for around $500/mth you get a cubicle to work from; similar to a serviced office, and includes janitorial, security, parking and furniture. Phones/Internet/IT Services are additional and are only available through Plug and Play. You can proceed month-by-month if you wish, moved in immediately if desired.

What makes if very different from a serviced office is the large data center in the basement. There is plenty of rack space to put your gear in. The cabinets are locked and accessible by tenants of those cabinets. You can rent as much or as little cabinet space as you need and scale to your requirements. The previous tenant of the building had priority power off the grid so even in a brown-out mains supply is there. Being a data centre of course it has UPS. The perfect place for your SaaS start-up.

Check it out at PlugandPlayTechCenter.com

Hmmm. This is the first time I’ve seen Google throw an error…

Getting the creative juices going amongst staff can be a challenge at times. All too often they are heads down beavering away doing the day to day stuff to think about innovating and turning those ideas into commercial realities. How do you solicit those ideas from them?

My approach is to take staff out of their usual environment and have an offsite somewhere and spend a few hours running through a template or framework to get those ideas boiling to the top. Below is an extract from the powerpoint presentation I use for this purpose.

 Definition of Entrepreneurship: “Perceiving an opportunity and creating an organization to pursue it”

• Can we discover or conceptualize an innovation that is marketable?
• Do we have the expertise and desire to bring this innovation, whatever it is, to market?
• Do we have access to the resources to produce this innovation?
• Can we create/operate in an environment conducive to perpetuating this venture’s success?
• There are no guarantees! People in this room have full responsibility for the success or failure of this venture.

 The Idea

• Idea must be unique.
• It is neither likely nor required for a business idea to be new; odds are that someone, somewhere, has had the idea before.
• What is relevant is the implementation of that idea.

Product Concept and Market Need

• What is the product/service in terms of features and benefits?
• What does the product/service do and how does it do it?
• What are the target markets?
• What is the target population in terms of number, demographics and potential sales?

 Expertise, Resources and Environment

• What expertise is required to translate the idea into reality?
• What physical resources do we need?
• What capital do we need?
• Are we in an environment that supports our business efforts?

Strategy 

• Without a comprehensive executable strategy we will be forced to rely on crisis management to react to unforeseen events
• Strategy is like a game
• Consider it a game of chess
• Players weigh possibilities about the outcome of moves
• Armed with foresight and knowledge, determine the best move(s) to make
• However, business strategy is far more complex than any board game
• Business playing field holds many challenges
• Need to consider the market, innovation, core competencies, value creation, growth, restructuring, reengineering and global strategies
• Need to anticipate a wide variety of factors including:
• Global playing fields, new players, new products, new market sizes, new customers and competitors strategies to name a few.

Funding Vs Bootstrapping

• Where are we on this continuum?

Ideal Business?

• One built on a system rather than a product or service
• Is setup to run itself
• Is either:
• After a niche market; or,
• Is high volume not low volume high profit margin
• Not geographically constrained

Success

• Some businesses succeed more than others because:
• They positioned themselves within their industry context and reacted either quicker or better to specific industry conditions to gain some advantage over their rivals
• They acquired or developed resources or assets that are scarce, valued by customers, non-substitutable and are non-imitable
• They gradually accumulated complementary knowledge to build routines and core competence that are hard for rivals to imitate

Opportunities

• There are many opportunities that we can pursue.
• We have a diverse range of skills and experiences amongst us.
• We’ll tap into each others ideas, resources, understanding, knowledge and creativity to construct new shapes, blocks, buildings and formats, ways of doing things.
• The needs of customers are basic to product development.

Ideas

• Top ideas should stir public interest.
• Go for innovation, surprise, practicality, aesthetic value, different usage, time efficiency, quality, worth. 
• Look for gaps (environment scanning), emphasising leading edge technologies
• Opportunities can arise from a change in industry
• Revise and adapt what we have to specific market needs?
• Monitor customer insights for inspiration
• Look for new business concepts

Opportunities

• We must gather customer insights and use them to build differentiated value propositions
• Information Technology is the engine room of business
• Software is a good profitable business to be in
• Continue to …
• Rejuvenate our pproduct with a different model (perhaps SaaS model?)
• Or start with…

Imagine

• Pretend we are a startup
• Don’t have any preconceived notions
• Worry about execution later

Opportunities

• Can we create the “next big thing” technology?
• Where do we fit in the software ecosystem?
• Should we carve out a substantial horizontal niche? Be disruptive to incumbents in the enterprise software space? Lets throw hand grenades in!
• Should we consider giving our software away and making it up with service?
• Setup a few diversified online business streams? Like a portfolio of online businesses.
• Put our IP online?
• Repackage what we have and put it online?
• Can we put a killer app online? ASP. CRM online, integration, data scubbing all on-line? Proximity matching online, $10 per batch…
• Maybe we develop software way outside of our comfort zone and go into podcasting, VOIP (i.e. Skype) or something like Google maps?
  Info online, Courses online 

Build a system that cannot be easily replicated (Dell, Fedex, Amazon, E-bay)

First Mover Advantage - Jump competitors by getting product/service out there fast

Going Foward

• Need to understand markets
• Sell the product while it is being built
• Everyone is in sales
• Leverage outsourcing, offshoring and open sourcing

Download opportunities template [.doc 61K]

November last year we outsourced a significant part of our software development to India. We engaged a company in Bangalore to assist us in driving a number of initiatives. The engagement was a combination of dedicated resources and fixed cost project type work. The dedicated resource part of the engagement was setup such we considered the dedicated resources to be contracted staff. The rates were very reasonable and the new India based “staff” had access to our intranet and development environment. They used a variety of collaboration tools such as Skype and IM to be able to interact with our Aussie development team. Unfortuantly we had to make a hard decision recently and that was to disband the dedicated resources and continuing engaging with India solely on a fixed cost project basis. The reasons for this decsion were:

- The nature of our conversion from Enterprise to SaaS was not suited to India

• India had a large overhead of specification/requirement documentation and we were “feeling” the spec as we went. As we were converting our enterprise product to SaaS the concensus was “We don’t need fancy documentation and designs, just get it out there”. This type of philosphy does not work well with India outsourcing.
• We required design work to be completed and unfortuanty India dedicated resources did not fill this role

- There was difficulty with India participating in the full cycle of software development

• Requirement
• Design
• Implementation
• Testing
• Documentation
• Release
• Project Management
• Support/Maintenance
• Server setup: security, database setup, scripts, libraries

- We found India to be narrow in skill sets, i.e had depth rather than breadth

• Hard to communicate and direct since there was 5 1/2 hours timezone difference
• Found that India dedicated resources could not work with minimal supervision
• Poor code quality
• Communication was difficult, a lot of discussion required drawing up things and meetings
• Dedicated resources felt a little left out… hard to be team players

- We were switching gears with our SaaS rollout and were about to embark on:

• Architecture project
• Database redesign
• Requirements gathering and design work

hence as this type of high level work is best done inhouse we are now engaging India purely on a fixed price project basis. I’m glad we had the opportunity to try dedicated resources. At some point in the future we will attempt using dedicated resources again though there will be changes such as  building a larger team so we have critical mass and appointing a team lead with higher level and broad skillsets.

Back in 2004 we attended and presented at the ANZATech Conference. One of the main benefits that we got out of that was an introduction to Silicon Valley Bank. If you are seeking funding in the US then SVB has to be on the top of your list to engage to assist. They have a division called Venture Exchange Services which, within 1 week, had put together a preliminary target list of VC’s for us and starting introducing us.

We worked through their SVB Venture Exchange program and we agreed to grant SVB the right to invest and warrants on a successful fundraise basis. SVB introduced us to 17 VC’s. The SVB Venture Exchange leads came through their network of 27 offices across the US, with approx 100 relationship managers serving more than 9,000 tech and life science companies. The Success Fee Agreement was signed and executed. We now have a strong partnership with SVB and to date we are impressed not only with their services but also breath of services SVB offers.

More info on the Venture Exchange Program at: http://www.svbank.com/svbcapital/pegroup.asp

P.S. We did not get funding through VC’s in the end. Because we were self funded , profitable and had no debt we were able to grow out of cashflow. All the same it was a good experience.

This book is worthy of reading for any entrepreneur. This book is a practical “how-to” guide for overcoming the hurdles that all entrepreneurs face when starting and growing a business. Serial entrepreneurs Matthew Michalewicz and Zbigniew Michalewicz provide countless “out-of-the-box” solutions for:

• Winning that first major client
• Signing up partners and resellers
• Building an all-star management team
• Leveraging new customers from existing customers
• Impressing the media and analysts
• Engaging high-profile board members
• Finding investors who provide more than just money
• And much more.

Many software company examples are given particularly related to the US. Worth a look at http://www.credibility.com.au/