Archive for September, 2010

DC Tech Cocktail Recap

I took a break from tweeting about TechCrunch Disrupt and went with Mike to Tech Cocktail last night at Slaviya (formerly Left Bank) in DC.  I have fond memories of Left Bank, as last year we presented there and got tons of great feedback. And also criticism. I went up to one group (who shall remain nameless) and not only was their pitch lukewarm, but they didn’t know their competition and therefore could not respond to my simple question of “how is your product different than X?” That’s okay though. I definitely (still) feel put on the spot when asked to pitch and sometimes awkwardly blunder my way through it.

I love Frank Gruber for starting Tech Cocktail and I think it has made the DC startup community a small world with a tightly knit group of players.  I love seeing what everyone is working on, meeting developers, lawyers, and our own local venture capitalists/angels.  I saw some startups that really could add to the online conversation, and provide neat tools that I would genuinely use.  Tech Cocktail despite its name is so much more than just a ‘social hour,’- start ups really use these events to practice/hone their skills in their most friendly market.  I would love to see Tech Cocktail build out some kind of feedback mechanism for the start ups that presented so that others could make suggestions, vote, etc. on the start ups who present at each event.

Also, talked briefly with Peter Corbett about iStrategyLabs building an Innovation Center for start ups in DC. I LOVE THIS IDEA and IM SO GLAD they are doing it! So many of us work out of basements and our own bedrooms that it’d be fantastic to have a place (hopefully with a bit of character, not a pointless grey land of cubicles) that we can utilize for meetings, gatherings, etc.   Mike and Sean bonded over their barely functioning cars, and once again I was reminded of how much I hate mine.  To do item: purchase a car I actually like, that has a somewhat lower car payment, with four doors.

All in all, great Tech Cocktail once again. Look forward to seeing everyone next time!


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Business Intelligence vs. Predictive Analytics

As a person with an ERP background, and deeply held respect for data, I’m not usually one to rag on Business Intelligence. There is, undeniably, a lot of value in knowing where you’ve been.  But there’s an evolution in thinking, and I think it’s very exciting, and that’s in the realm of predictive analytics. What I’ve seen in my six years of implementations is a lot of ‘stuff’ (data) that is basically gathering cobwebs in the database tables. Unused.  A lot of companies archive this information without even looking at it.  And analysis of all the data might yield interesting results, some facts and figures, but most people don’t have the skills to make real predictions using data, no matter how much of it there is.

Consider, for a moment, the stock market.  I can take any stock on yahoo, and I can get daily, historical returns. I can get the PE multiple, EBITDA, the SEC 10k, and I can learn everything about the management team, including their kids’ names. But does this wealth of information get me anywhere? Not really. Why not? Well, because I’m not a financial analyst. Even with financial analysis experience (which I do have, incidentally), I’m not necessarily able to make conclusions about future performance with certainty. Even if I took all the information available about the market, the competition, and rolled it all around in my brain, the chances I’d come up with an accurate prediction are practically 0.

In the same way, companies aggregate their own floods of information, but the person doing all the number crunching usually 1)doesn’t understand all the information that they are looking at and 2)isn’t trained in predictive analysis.  I think a wealth of tools exists that have enabled organizations to look at the crushing load of data and derive insights from it. It can be described sufficiently in business intelligence to give it meaning to the user. But, that still doesn’t take us all the way to what we need, which is predictive capability.

What would be really incredible would be real-time predictions, with abilities to change certain key parameters. I want to know, with 95% confidence, with an error rate of 3%, what are the chances we will make our numbers for next quarter given our standing as of right this moment. And no, I dont want to schedule a meeting with Bob from Accounting and John from Strategy to tell me this, I want an application to do it.  Sounds awesome, right?  And that’s a financial calculation, mostly. But what about even better predictive analytics, that looks at several different data sets, and joins them all together so that it can tell me if I discount one product, would we beat our financials, and how much can I discount it, and what are other possible solutions?

In short, applications that advise rather than show and tell.

(Sidenote: Hey Mike. I think this should be our next product. Whaddya think?)

There are a lot of players in this space (SAS, Teradata, MuSigma, not to mention the BI integrators, etc.), but there’s plenty of room for more. It’s a universe of data. And I think that the modeling tools , and their hideous interfaces, could definitely use an infusion of creativity. And perhaps also some taste. Whatever, you know what I mean.  There’s a conference in DC in October (details) and I’d love to go but it’s expensive.  What’d be better is if any start ups in the DC area in this field would email me and we’d have a get together. Hint Hint.

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Why Chris Sacca is Awesome

So, last week I went out to lunch with a small group of Georgetown students and Chris Sacca was there to chat and give us free advice (free! advice! from Chris Sacca!) and some of the things he said really struck me as being a true evolution in the minds of venture capitalists, and one that I think is 1)necessary and 2)welcome and 3)awesome.  The message was a recognition that for many founders, although our company is ‘our baby’ and we sacrificed thousands of hours, months/years, possibly relationships, the overriding concern is money.  Too often, entrepreneurs sell out or give up at precisely the wrong moment. I could make up a bunch of reasons why this is, but let’s be real here, it’s about the money.

But not in the way most people think. We are not just money-loving bastards, wanting to make a buck.

On our own startup, givto, there have been ups and downs. At one point, one of our founders had to literally ask for money from his parents. And his friends. And wasn’t eating, or sleeping, ever. We all have debt, and I don’t mean $4 and change, but literal mountains of student loans to pay. Plus the debts we’ve taken on for the company. Plus our housing, cars, and food. Although is now profitable, no one is living large. There have been definite sacrifices in time, in money, in relationships, in “fun” for the company over the last year and half. Sometimes, it feels we are snailing our way down an endless road to nowhere.

But we did all of that because we love Givto, and we have a vision and purpose and we believe in it. That being said, if someone offered to buy us for $2 million dollars tomorrow, would we (could we) refuse?  I don’t know. For Mike and Adam, it’s been a definite struggle to find talent and resources. For me, having another job and doing an MBA and doing a start up leaves me little time for other important things, like seeing my family. Or sleep. Our other partner, Michelle, is in law school full time and could definitely use the money.

I know many start ups are in similar or worse positions – strapped for cash, exhausted, but elated they’ve made something from nothing, thrilled that someone (anyone) else thinks it’s a great product. Unless they were born millionaires, every founder is faced with the inevitable choices of giving up, selling out, or holding on for just one more day.

This is why I think Chris Sacca’s viewpoint on giving founders smaller amounts of money to “tide them over”, and/or buy a small amount of their shares for immediate cash, is a fantastic idea. For a relatively small amount (say $5000), startup founders could feel less like they are in a financial nightmare. I’m not talking about Dom Perignon and nights at Nobu – I’m talking about the ability to pay for server costs. For business cards (at one point Givto was too poor to pay for business cards…). Or for just peace of mind.  Through a veil of desperation, it’s hard to make wise decisions about the future of a company, especially when getting out of it looks (at times) like the only option.  VCs tend to think the only money that “moves the needle” so to speak is a $100k investment, but that isn’t the case. I think it’s the smaller amounts that say more, if only because it acknowledges a true understanding of the startup dilemma, and I think it also generates a level of trust between the founders and their investor.  As foolish as it sounds, Founders want to know that VCs care about more than the product, they care (even just a tiny bit) about us too.

This is also why Chris Sacca is (so far) my favorite guy out there. Not only does he understand the founders dilemma and is working to spread his theory on small cash infusions to start ups to other VCs, he also legitimately seems to care about “the kids”. His response (read it here), was not important in the sense that it was ‘a response to Ron Conway’. What was far more important were the ideas embedded in the email, and I urge every founder and VC to read critically and give these some thought.  After meeting with him (which was prior to Angelgate), I know this response is not just words but a firmly held point of view, and one that he talks about with passion. And that’s awesome.

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Can you hear me?

First off, allow me to say that if you’ve checked my twitter, I’m sorry.  It’s a sad thing, I don’t maintain it very well, and I usually don’t have much to say.  In fact, I tweet (on average) once a month.  I was amazed when people started following me.  First it was family members, then friends, then recruiters, then people I didn’t even know, then it was other organizations.  I’m no celebrity, and I am not sure if I have anything valuable to say, but I have followers.

If I have learned anything from Twitter, Facebook, Youtube, and the like it is that people are listening. In fact, someone is always listening, all the time, to everything.  For an organization, this is fantastic news.  This means that no matter how small your town, or your network, your budget, or your inventory, someone out there will be listening to your message. Any message. And they will be taking it seriously.

For an organization, this is also terrible news.

Traditionally, whenever a company wanted to share information about itself with the world, the message was carefully crafted by communications personnel. It was vetted by multiple persons in the organization. It was often painstakingly reworked by a team of lawyers. All in the hopes that not a single word would be taken out of context, that there was not even a comma that might mistakenly offend the delicate ears of the listener.

This is no longer the case. Organizations are finding that they have shockingly little control over their own image.  Individuals are finding the same.  Working in the space of social media, I am surprised daily by how few truly grasp the power (and danger) of Twitter and Facebook.  Idealogues and political campaigns, non-profits, educators, whomever – flooding listeners with information without knowing who is listening, saying whatever comes to mind. They press “post” without reviewing, without a legal team, without anything except the delete button to save themselves. And sometimes that comes too late, and thousands of unknown eyes have already seen what you wish you’d never said.

In some ways, the dangers of social media remind me of my early forays into the workplace.

Because I was young, and naive, and didn’t know who was listening, I said whatever to whomever. All the time. The result of this of course was an endless string of miscommunications. I hurt people’s feelings, opinions of me developed that weren’t true, and I ended up in more than one difficult situation.  As time went on, I learned that what comes out of my mouth in an office space can be overheard, that I should close my door before cursing, to take a long deep breath and listen to flute music before pounding out an angry email.

When an organization uses twitter (and when its employees use twitter as individuals), every post becomes a conversation with the brand’s listeners.  The information shared is synonymous with the brand. And that can be both a bad and a good thing.  Companies with a stodgy and staid appearance can now use Twitter to “lighten up” and open their proverbial doors to outsiders. Innovative companies can get feedback on ideas before they are pushed out of the nest, making them smarter and less likely to fail. And individuals can share their views, find solace in not being alone, and develop relationships with like-minded people hundreds of miles away.  Or organizations can have one company member post a racist ‘funny’ video, and find their reputations ruined within hours.  Individuals can criticize their boss online and have it read aloud to them by their HR Department the next day. And people who are icons of a community can find themselves looking like backstabbing shitbags who turn on their friends in an instant.  These one-time posts may say little about who or what the organization is really like, but to those who are listening, one post may say everything.

I literally cringe when reading the tweets of celebrities, organizations, or CEOs who simply do not realize how incredibly idiotic (or arrogant) they sound to the average reader. Be assured, if you have written even one unprotected tweet, someone has read it. Someone has read your words and formed an opinions, just like they would if you had tapped them on the shoulder and spoken to them face to face.

Plenty of studies have been done (including one by!) about the power of communication via twitter. Studies show that it is not only tweeting itself that brings followers, but specific types of tweets. The entities (persons, orgs) with the most followers are ones that tweet news, share personal details, interact with listeners by answering questions or commenting. In short, they engage in a conversation with the listener, not just information sharing.  But at the same time, you want to engage the listener without alienating them.  With this is mind, perhaps we can refer back to the basic rules of conversation making that are used in dating:

  1. Say something interesting
  2. Don’t always talk about yourself
  3. Expect positive and negative feedback
  4. Be respectful
  5. Know when to shut the hell up

So next time you post on twitter, and  you wonder if anyone can hear you?  Just know that yes, they definitely can.

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