Saturday, January 5, 2008

An Embarrassment of Riches

I'm doing some consulting with a 15-year-old 'start-up' company in Boulder who has an unusual problem: too many valuable, potential directions to choose from. You see, these very smart folks applied their deep knowledge and expertise in telecom to building a platform that could serve any number of markets in any number of ways and they're finding it hard to pick one or two to focus on to maximize their current revenue and potential exit valuation.

In a nutshell, their platform can 'harmonize' data from virtually any source - any database, interactive phone-based input (IVR), web forms, text messaging, call center operators, etc. and also turn that data around and push it back out. For example, if I want to know right away when I receive an important email, this platform will read my messages as they arrive and call me to read to me the ones that include the phhrase "term sheet" (or whatever words I deem important - think Outlook Rules Wizard). Or, say I want to ask my customers some survey questions. This will call them and administer the survey by phone, or let them transfer (even mid-way through) to finish with a call center operator or via a website. Need to alert a bunch of people via multiple media of something urgent - and want their verification of receipt of the notification? No problem with this platform.

In essence, they've got an erector set full of very cool parts that can be assembled in a variety of ways for a variety of purposes. Unfortunately, this can also feel like a solution in search of a problem. When it comes time to actually sell something where do you market? Who are your potential customers? "Everyone" is obviously not an effective market segment since it can not be targeted.

It strikes me that something like Twitter has essentially the same problem. They put out a tool and left it to users ("everyone") who discovered it to figure out what to do with it to make it valuable. One usage I saw great value in was when evacuees from the SoCal fires this Fall were able to let their loved ones 'follow' them while they submitted updates from their mobile phones. Unfortunately (for Twitter), I don't see that they've discovered how to monetize their capabilities into a business yet.

My goal is to help this company pick the BEST opportunity or two to pursue for the quickest impact and using the least of their limited resources. The SWOT Analyses we're performing are helpful but not quite enough. It seems like most frameworks for evaluation of strategic options assume the industry you are part of is a 'given' and thus your competitors are also clear. I'm in search of an analytical framework for evaluating amongst several potential products and industries (e.g., do we pursue Realtors or Homeland Security?) without creating months' worth of work trying to understand and size each and every prospective segment separately.

Can anyone recommend such a framework or an analogous case study?

Wednesday, December 19, 2007

Adventure / Travel / Humor

After 5 years working in the adventure travel industry I've developed enormous respect for the diversity of places, people and cultures around our globe. It's really been humbling to realize how big the world is and how little I know of it (and to what degree others have been able to see so much of it).

That said, you can never take yourself, or humanity, too seriously so I want to plug The Onion's work on their Atlas of the World. It's a very nice implementation of technology and just plain funny. For example, it's description of China:
"With over 700 billion citizens manufactured since 1892, China is the world's
largest mass producer of Chinese."
Warning: This is probably to be avoided by those who are easily offended by political incorrectness or who ever worked in the Peace Corps!

Wednesday, December 12, 2007

BRRR! The Chilling Effect of Healthcare Costs on Entrepreneurship

Open Letter to Government Economic Development Directors:

You all say that the "cost of doing business" is key to attracting business headquarters & operating units to your State, City, etc. Given that many more jobs are created by small businesses than those with a 'headquarters' I invite you to consider the chilling effect of current healthcare policies (with the exception of those in a few progressive States) on entrepreneurship and innovation. Perhaps your first visit tomorrow should not be to the Chamber of Commerce meeting but to the department responsible for Healthcare Policy in your State.

When someone considers starting a business they are generally weighing the viability of leaving a paying job, with benefits, for a life of uncertain income with a future pay-off (or a certain income of exactly zero, for some time). While one can plan ahead and then accept the lack of income for a time, it is very difficult to factor in an expensive healthcare insurance premium along with basics like food & shelter and still find the math saying "go for it!"

Sure, COBRA sounds great as a way to keep those 'big company benefits' coming for a time while I build my new business, but with the premium cost each month almost equal to my house payment, can i really afford it? No. And this is not an exaggeration. I'm lucky to have a fairly petite mortgage payment because i bought long ago, but it would have cost me about $1,400/month to keep the very good insurance plan I was receiving from my last company. That has a drastic impact on my monthly budget for staying alive while I build a business that can support me, my family and eventually other workers.

So, would-be job creators go out looking for cheaper alternatives. And plans are out there - as long as you don't have any pre-existing conditions and don't plan to need any expensive healthcare (which you really wouldn't be able to afford with these inexpensive High-Deductible plans that require you to spend $10K out-of-pocket before they provide coverage).

The bottom line in all this decision-making is that a number of smart people with good ideas for new businesses that could grow the local economy are just staying put in corporate jobs that equate to financial security for their family (at least until the next round of layoffs). How about we take off the handcuffs that bind would-be entrepreneurs to their healthcare-providing corporate sponsors and find a way to create one pool of insureds who remain insured, at a constant cost, no matter who they choose to work for?

Sunday, November 25, 2007

"Why Me?" - Attribution Theory of Success/Failure

I found this post by Guy Kawasaki about serial entrepeneurs (spurred by the thoughts of Glenn Kelman) surprisingly 'emperor has no clothes' for a VC.

It's also a fascinating topic when viewed through the lens of "Attribution Theory". A lot of Guy's & Glenn's comments seem to have unknowingly stumbled into Psychology's well-studied world of "Attribution Theory." In a nutshell, people attribute success or failure to luck or ability depending on their expectations for success or failure. For example, I know that passing the Bar Exam (for lawyers) is hard, so if I fail it that was expected and hence bad luck, not a measure of my innate ability. On the other hand, if I fail an exam for a driver's license (that is simple and hence expected to be easily passed)... well then i might have to attribute my failure to lack of ability.

For a dry, scholarly look at the topic you can read this.

This topic gets very interesting when you start to bring in gender differences. Most studies find that gender differences in expectations and attributions arise primarily from stereotypes about the task itself. Given that women generally have low expectations for success when completing "male" tasks (like business & entrepreneurship), they tend to attribute their success to luck and to attribute their failure to lack of ability. However, men, who generally expect success, often attribute their failure to luck and their success to ability. [paraphrased from above source]

As a woman, I have to say I have fallen into this trap myself and looked enviably at my male counterparts who, after failing right along side me, could chalk it up to just 'bad luck.' And speaking of failing - we always hear how you learn more from failure than from success... where are the VCs looking to find the 'smartest' entrepreneurs based on this metric?

Saturday, November 24, 2007

Facebook for the rest of us

So the gold rush is apparently on... what applications can we build on the FB platform to achieve fame, profit and glory? Must one serve the young consumer market to succeed or is there a way to tap into the growing membership of adults with interests beyond parties and throwing sheep?

I hear other adults talking in hushed tones about using FB, despite our advanced age of 30+, and i've been checking it out myself for about 6 months now.

Conclusions thus far: it's fun! I'm sharing pictures with my friends and playing scrabble with old college buddies now far removed, and following the Twitters of friends and even family displaced by the recent fires in SoCal.

My big questions about crossing the chasm into the business-use realm:
  • Can this be useful, and not just fun/interesting, for people/companies who want to serve a business need?

  • If there's a useful app out there for business users will they expose their profile to business colleagues in order to enable the app?

  • Will we end up with 2 profiles each - one 'personal' and one 'business' - to avoid the above problem?

  • Perhaps the tools themselves will allow us to have one profile but bifurcate our selves into fun-lover versus professional for the purposes of who sees what?

More questions than answers, but given the amount of press that Facebook is receiving I believe we will see our answers quickly.

Wednesday, November 21, 2007

Airlines: Why we hate you

No matter your business or industry, you probably have to fly to do your job. You may even choose to fly in pursuit of fun (remember that?!). Whatever the purpose, we have all learned to accept poor customer service, dirty planes, starvation and delayed flights in exchange for the cheap fares we are now addicted to.
Despite all of these lax expectations, air carriers still manage to find ways to make the traveling public just plain hate them. To wit:

I am contemplating a trip from Denver to SoCal, and I choose to explore fares to the Ontario airport. Here's a non-stop on United for only $300 (not bad for less than 2 weeks before departure):

But since I'm searching with Kayak, I can also check-out fares to other nearby airports. Of course, I was expecting to check out other SoCal airports (San Diego, Orange County, LAX...), but to my surprise instead found this:

A flight for $173 round trip that starts and ends in Colorado Springs but has the EXACT SAME Denver/Ontario trip in the middle! So, for HALF the price I can take TWICE the flight segments. This defies all human logic.

Clearly their decision to price fares this way has no basis in costs. I couldn't even find a competing fare from COS to ONT that might explain why this fare exists from a competitive standpoint.

Meanwhile, I'm left with the choice of whether it's worth cutting our airfare in half by driving to an airport that's about 45 minutes further away than DIA and of course expanding the travel time significantly.

I choose to not divulge my decision, but to continue to hate airlines and to complain to the blogosphere instead.

Can anyone from United Airlines comment on this seeming paradox in pricing?

Tuesday, June 26, 2007

Entrepreneur-a French word meaning 'glutton for punishment'

I realize, 5 years into my second VC-backed start-up, that each and every one of us has a disease. Some diseases are obvious physical ailments, some the better-hidden emotional weaknesses and others, like myself, are struck down with ridiculous amounts of hard-to-detect stubbornness. For this, sadly, there is no cure.

My parents tried to fix me, from time to time, but it just didn't take. My friends occassionally deserted me over it, but i didn't learn. Fortunately, it turns out VCs thrive on this particular vein of illness. They call those of us struck with this disease "entrepreneurs" - I call us 'gluttons for punishment.' We are they who buy into the dream, drink our own kool-aid and refuse to give up until cold, hard financial realities break us.

This blog is an ode to the delightful gluttony of punishment an entrepreneur can receive from a start-up.