LSQHA Blog Reviews

Today I spoke with a diverse group of new entrepreneurs as part of my ongoing Online Strategy Roundtables . Together, this group illustrates how a business depends on how sharply the target market is defined. One entrepreneur is well on her way and another needs to focus more on his strongest market segment. Like many entrepreneurs, the other two are clearly accomplished people, but don't come from a business background. For such entrepreneurs it is often worth looking for a cofounder who can fill in with expertise in areas where gaps exist. Sponsor Guest author Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies and writes a business blog, Sramana Mitra on Strategy . She has a masters degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Her three books, Entrepreneur Journeys , Bootstrapping, Weapon Of Mass Reconstruction , and Positioning: How To Test, Validate, and Bring Your Idea To Market are all available from Amazon. Her new book Vision India 2020 was recently released. Mitra is also a columnist for Forbes and runs the 1M/1M initiative. Julie Goldman did a nice presentation of her company The Original Runners . In 2003, she was the first to offer non-slip, high-quality fabric aisle runners for weddings and special events. Through her website she offers gorgeous hand-painted runners wholesale, and business has been growing to a revenue of $700,000 last year. I really like how tightly focused this business is. Niched wholesale businesses are great! Her main concern is that two dozen lower-quality copy-cat competitors have popped up over the years. To stay ahead of her competition, whom she describes as mom & pop at-home operations, I suggested she work with bloggers who are influencers with wedding planners (her main customers) to help specifically articulate why her product is superior. She has already relocated the business from New York City to New Jersey to reduce costs. To further counter the pricing pressure she is feeling from her competitors I suggested she look at relocating somewhere where it will be even less expensive for her to operate, like Vermont perhaps. She plans to launch a new brand as an accessory line and we discussed how it is only when she markets this new brand to her list of existing runner customers will mentioning "from The Original Runners company" hold any weight. New customers will not recognize the name and its association with quality products. We also spoke about SEO and search engine marketing, on tightly focusing pay-per-click campaigns on higher-end markets rather than going broad with a worldwide campaign. So far Julie's is a great case study of a growing niche business. Next up was Sonali Roychoudhury presenting for Pursue Natural . Sonali is a scientist who is working with a team that is conducting research to find and bring natural medicinal plants to market that are not in the mainstream. Like many entrepreneurs who do not have a business background, Sonali is risk averse, unwilling to make assumptions, and uncertain as to what the next steps should be. We discussed the natural breath freshener that they have produced. It seems like the cost of entry into this small niche market is too high for this to make sense. She then explained how a small but loyal customer base has grown for this product through their process of testing the marketplace. By just setting up a direct Web sales business targeting their existing fans and the extremely high end natural product boutiques, I believe she could build a very nice small business selling small quantities month-to-month. As long as it is profitable, a small business is more than worth building. Lorenz Lannens and his company Online Design Bureau started as a consulting business that grew into to a Web solution for small and medium sized companies that helps them to develop their Web marketing strategies. His product and service enables clients to set up their Web marketing system, and he has metrics from early customers showing the system works. As we discussed his current customers, it became clear that his service is not really for startups, but more for businesses that are not Web savvy. I believe if he goes after companies that are not doing Web marketing as his segment and targets the verticals that his current clients fall in (like architecture firms), his list of customers will grow. I liked this presentation and clearly there is a need for this service. Many entrepreneurs who have pitched at these roundtables could probably use Lorenz's help. In fact I suggested that both Sonali and Felice tap into his expertise. Lastly, Felice Gerwitz presented Scholar Square , a beta site targeting the homeschool community. She is an educator and author who specializes in homeschooling and hopes to sell a wide range of presentations and seminar classes through this site. As Felice explained her ideas, it became apparent that she is trying to do too many things for too many people, the classic "spray and pray." I may have been a bit hard on Felice when she told me she did not go through the Clarify Your Story questionnaire as she was asked to on the roundtable registration page, but I think it needed to be said. There are no shortcuts when you are an entrepreneur. You need to do your homework. Felice needs to focus on the segment of the home school market that she tackles the best and is passionate about, and let the other ideas go. This should help her site find its center of gravity and its customers. These roundtables are the cornerstone programming of a global initiative that I have started called One Million by One Million ( 1M/1M ). Its mission is to help a million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. In 1M/1M, I teach the EJ Methodology which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures. If you are an entrepreneur working on an idea or an early stage business, I am also very interested in hearing what you are looking for from 1M/1M. Please weigh in here . We are crowdsourcing the design of 1M/1M, and requests that have come up include Receivables Financing as a way to bridge to a validated business without giving up precious equity, I would love to hear your thoughts. You can find the recording of this roundtable session here . Recordings of previous roundtables are all available here . You can register for the next roundtable here . Photo by Nick Cowie . Discuss

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Startup Strategy Roundtable: Well-Defined Niches Work Best

Today, we got the chance to sit down with Aprimo, an on-demand marketing automation company that has built their software business around scaling their own cloud infrastructure with VMware vCenter . Aprimo has optimized its offerings to scale with customer growth and leverage best-in-class hardware to match innovation in the software layers it develops. In this discussion, we found less need for discussing private vs. public cloud. Instead, we found more focus on performance and speed-to-market as key drivers for moving a virtualization strategy into personal cloud infrastructure reality. Sponsor The story of Aprimo starts with virtualization - and has led to the company defining the boundaries of its cloud offering and product architecture around the benefits of scaling resources on demand. Aprimo uses a Microsoft .Net three-tier architecture with MSSQL in the back-end. All of the three tiers (front-end, business logic, database) run in virtual containers that are monitored with vCenter. Performance is the question that Aprimo studied when bringing vendors on board. The company has relationships with 3Com, Cisco, and HP for the three key parts of the technology stack. vCenter joins these offerings together and offers the company quick response to new customer requests. Like many business, marketing can come in waves and this architecture is designed to scale around the unknown and to be agile enough to support the marketing calendar. Here is a diagram showing the core services VMware vCenter is focused on: We had the chance to explore the customer experience of build-your-own-cloud with John Gilmartin, Director of Product Marketing at VMware. We asked him if VMware sells clouds, or if instead its tool build clouds. What we found is that it is a bit of both. Like a data center itself, or a complex application, building your own cloud can be a multi-faceted event. Customers are using vCenter as a building block to manage the resources and enabling automation around business processes. By thinking of automation as the line in the sand between virtualization and cloud, we can easily see how connecting business processes focuses on the best place in harnessing on-demand resources for business benefit. Some of the areas of focus we the Aprimo team took on as the company to optimize its virtual resources into its cloud. Design and optimization of resource pools Database tier optimization and support new dynamic customer scaling Designing for performance with vendor evaluations Leveraging best practices from VMware on tuning and finding bottlenecks Processes for spinning up new users automatically across all resources Out of these focus areas, we found database scaling the most interesting to consider. It seems clear that as build-your-own-clouds grow, database performance, concurrency, and process integration are ripe for further optimization. What we learned from Aprimo and VMware vCenter is that launching a cloud infrastructure is a combination of virtualizing computing resources and designing the automation of the right business and technical processes. Reaching the stage of an effective cloud depends on how the team thinks about connecting software, sales, and infrastructure together as a process. Making a commitment to your own cloud can bring a company together - from sales manager to developer. This join can position an organization to win customers and grow the business due to an increase in the end to end agility of the organization. Is your business ready to cook up a cloud recipe of your own? Discuss

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One Approach to Growth: Build Your Own Cloud with vCenter in the Middle

Salesforce.com is acquiring Jigsaw for $142 million in a deal that exemplifies how crowdsourcing has entered the the business world. Sugar CRM also uses Jigsaw for business directory information. The deal should cast a shadow on that relationship. Sugar CRM and Salesfore.com compete in the social CRM market. Salesforce.coms says the Jigsaw service will continue to be available on other platforms besides its own. Sponsor Jigsaw uses a Wikipedia-style crowd-sourcing model to deliver up-to-date business contact data. Salesforce.com see the company's crowdsourcing methods as a leap in improvement over traditional enterprise data management models that require expensive integration and dedicated maintenance to keep the records updated. Jigsaw's crowdsourcing model leverages contact data from its community. The data is usually what is found on a business card, including name, title, company, mailing address, business telephone number and email address. Jigsaw.com community members can access the database and accumulate points by helping maintain the quality of the information. The points may be used to access additional information. Companies may purchase contact data from the service. Jigsaw also provides a subscription service that automates data cleansing services to update and improve the quality of the information for the end user. Salesforce.com recently launched Salesforce Chatter. The company says Jigsaw will be integrated to allow for updates in contact information through real-time feeds. But isn't data becoming a commodity? Crowdsourcing techniques are becoming increasingly sophisticated and there are lots of options out there. And then there is the veracity of the updated contact information. Sales contacts are a company's crown jewels. It may work for the small company seeking to beef up its lead pool but for the larger organization it may be just fine to use those enterprise technologies that Salesforce.com loves to kick. On the flip side, it's a different economic reality that we all face and low cost pools of data can be invaluable to companies. Additionally, crowdsourcing helps companies use the information of the crowd to build its business. That's the force Salesforce.com hopes will come with the Jigsaw purchase. Discuss

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Salesforce.com Buys a Crowdsourcing Company

At the most recent Apple keynote , Steve Jobs announced Apple's upcoming advertising platform called iAd . Included as a part of the OS 4.0 update, the mobile operating system upgrade due out for iPhone this summer and iPad later this fall, the iAd system aims, in its very Apple-ly way, to make mobile advertisements "delightful," meaning ads worth clicking on, engaging with and viewing. What Jobs didn't mention, though, is how Apple plans to give iAd its head start: by kicking out the competing analytics and advertising platforms now thriving in nearly every iPhone app today. Or so it seems. Sponsor Developer Reports App Store Rejection Due to Analytics Inclusion Last week, technology news blog VentureBeat caught wind of a story where Apple had rejected an iPhone application because it, according to the email sent to the developer, "is not appropriate for applications to gather user analytics." Not appropriate, you may ask? Since when? Apparently since Apple released their updated iPhone Developer Agreement. Alongside the SDK 4 beta , made available shortly after the announcement in early April, the developer contract was updated, too. Specifically, the clause in question, section 3.3.9, reads, in part (more here ): Notwithstanding anything else in this Agreement, Device Data may not be provided or disclosed to a third party without Apple's prior written consent. Accordingly, the use of third party software in Your Application to collect and send Device Data to a third party for processing or analysis is expressly prohibited. To date, the changes detailed in this clause have been overshadowed by the one preceding it - in Section 3.3.1, Apple banned the use of cross-compiler tools for building iPhone applications, like the one Adobe was just about to ship , for example. But in the long run, it's Section 3.3.9 that may have more impact on the industry as a whole. "FEAR" You may have not heard too much about this change because no one actually knows what's going on thanks to Apple's par-for-the-course policy of refusing to clarify its meaning. Plus, the companies who may be the most heavily affected by an analytics ban - services like Flurry , MediaLets , Motally , Localytics , and SimpleGeo , to name a few - don't want to talk about it. On record that is. But after a dozen or so phone calls and emails, we're starting to see a picture forming and it can be summed up in one word: FEAR . "Nobody wants to be the canary in the coal mine," one source told us, referring to the radio silence we're getting from these companies when you would have otherwise expected to hear outcry, or perhaps even anti-competitive claims. Some companies, off-record, say they are afraid to complain . If they do, they could be the next to be banned. Another source reported that a number of their company's clients weren't submitting updates to the iTunes Application Store because they were worried that the updates, with the analytics included of course, would be rejected. Instead, the clients are leaving their older applications in place since it doesn't appear that Apple is going back through all the current apps and booting out those that already include analytics within them. "Maybe the older apps are grandfathered in?" they wondered aloud. The fact that no one knows, not even the big name, big box retailer that sits at the top of the latter's client list, is a testament to how Apple likes to do business. Here's the agreement, read it and sign it...and that's the extent of the communication. As to those who did manage to get someone from Apple to talk about it? The answer was simply: "read the agreement." But if Apple holds true to what's written there, it sounds like it could spell doom for mobile analytics and ad firms, especially the small-time players beloved by independent developers. iAd, Anti-Competitive? What no one will say - again, on record, that is - is that the changes have a whiff of anti-competitive behavior to them. The issue at hand: Apple is preparing to launch iAd, an advertising platform based on the newly-acquired Quattro Wireless, a second choice for Apple after the Admob deal fell through. "We tried to buy AdMob, but Google snatched them up because they didn't want us to have them," Steve Jobs said during the April keynote. "So we bought another smaller company, Quattro. But we're babes in the woods." Some say that the added language to section 3.3.9 is a direct shot at AdMob in the same way that the changes in 3.3.1 were a shot at Adobe. That is, instead of allowing Google to get its mobile advertisements onto the iPhone, Apple can keep them out via the new analytics/ad ban. Whether or not that's the case is certainly up for debate. But considering that the Google/AdMob deal is still being researched by U.S. antitrust enforcers, regulators aware of the issue. Word has it that Google even pointed it out to the FTC, just in case. Continue Reading: Next page, "A Second Opinion" A Second Opinion: Privacy Concerns Others, however, say these changes aren't really about analytics, ads and anti-competitive behavior as much as they are about privacy concerns. In speaking with Alan Chapell, chairman of the Mobile Marketing Association Privacy Committee and whose firm advises companies on privacy and data strategy, the changes to Apple's agreement have to do more with consumer privacy than anything else. With language that refers to "geo-location" and targeted advertising, a good bit of Section 3.3.9 is about how location-based applications should behave. With the rise of location-based services especially and location-based social tools like Loopt, Foursquare, Gowalla, and others, privacy is at the forefront of everyone's minds these days. ( Including ours ). There are no standards for location based data yet, Chapell explains. No rules about how such data should be used, retained, shared and so on. In addition, Apple is under heavy pressure from regulators to protect the privacy of its customers. And if the third-party analytics providers do something which comprises that privacy, it will be Apple that gets in trouble. "This debate is about privacy and innovation," Chapell notes, "and finding a balance between the two." Unfortunately, even if Apple chooses never to enforce the new rules, explains Chapell, the changes will have an indirect impact on innovation in this area. The next round of ad networks, analytics providers and other in-app data-sharing tools will be less likely to be funded. Not Just Funding at Risk... These changes won't just affect the funding of services like those noted above, though, they could affect how services are developed for the iPhone. Take for example, Xtify , a location-triggered geo-messaging system now available for Android ( previous coverage ).

Google has purchased Agnilux, a chip startup run by Apple refugees. After P.A. Semi was bought by Apple in 2008 for $278 million, several of the prime movers of that company, including Amarjit Gill, Executive VP of Sales and Business Development, along with several Apple employees, jumped ship and started Agnilux. A former Tivo executive also joined the company. P.A. Semi produces the chips that run the iPhone and iPad. Speculation has surrounded the theoretical Apple intel that might come with the company, the entertainment media background of some of its executives and the extraordinary secrecy of Agnilux. Sponsor Despite investigation by the New York Times , very little information is available on the company. In February, NYT talked about the company's website. That website no longer exists. When it did it had little information. "Hop over to the Agnilux Web site and you're told very little about the company beyond the location of its offices and the derivation of the company's name. Agni is Sanskrit for fire and Lux is the Latin for light." An anonymous source told the Times he thought the company was producing a server. Prior to accepting the Google deal, Agnilux held conversations with Cisco, Microsoft and Texas Instruments. It's uncertain whether they spoke with VCs or other investors. Discuss

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Google Snaps Up Agnilux, Whatever That Is