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August 2005 Archives

August 26, 2005

What's Google up to? It's going to become a wireless telco with its own fat backbone...

...a searchbox accessible from anywhere

By Tom Foremski for SiliconValleyWatcher
My colleague Richard Koman picked out a great discussion topic for our newsletter subscribers. It is about where Google is heading and what it plans to do with the $4bn it is adding to its war chest...

I think it is very clear what Google's strategy is, or rather has to be. I think it is getting ready to do a wireless telco buy. Because everything is rapidly being walled up into gated communities, and the gatekeepers are the cable companies and the wireless mobile phone companies (the land-liners are toast).

Those walled gardens can shut Google out, or put Google a click or two away....and on a mobile phone that might as well be Siberia, you are going to use the first search box you see and it doesn't have to be Google.

In context

Google is not interested in search. It is interested in connecting the dots in user behavior. My cell phone can tell Google a huge amount of information about my user behaviors. And as Om Malik at Business 2.0 GigaOm, rightly points out, location is a powerful thing when you are in the contextual ad business...

Search box reach

For Google, it is all about location, location, location. It wants a Google search box in front of every person at any time and in every place. Look around, I bet you can see one right now :-)

Eric Schmidt, on Charlie Rose, said the mobile phone is more important than the PC, because there are huge areas of the world where the PC-based Internet doesn't reach but wireless cell phone technologies can.

"We'll get them all, even the ones in the trees," he said, referring to the Amazon jungle and all the unwired-to-Google-searchbox-places still remaining in the world. Google will get a search box to them on a wireless phone that runs on bicycle-power recharging stations in the wilds....is my bet.

That's why Google has to become a wireless telecommunications company -- because the carriers are forming wireless walled gardens, and Google needs its own.

Wonderful vaulting WIMAX

The only other alternative is to hope that WIMAX can vault over the walled gardens and we can get access to nearly free bandwidth through public WIMAX/WiFi projects...then we can get a Skype mobile phone with a Google interface that knows who you want to call and the call is virtually free...now that's disruptive.

But there is way too much at stake for that to happen. The wireless telcos won't allow the PC-ization of their markets because they saw how Intel and Microsoft sucked in all the margin from the PC market, leaving PC makers with crumbs...and an open communications network, the Internet! Where is the money in that? Lots of user value, of course...

Proprietary cash

The wireless telcos have proprietary networks that are massive cash generators and new cash markets are right ahead. They won't give that up to WIMAX and public WiFi in a hurry.

That's why Google can't bet on WIMAX, (it would take too long anyway). It has to hedge its bets and it has to become a wireless telco. BTW, look at where Softbank in Japan is heading...

August 26, 2005 | Permalink | Comment on this post | Tag: Google [GOOG]
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August 25, 2005

Are IT markets "deadly dull" or "quite interesting? The Gallant/SVW debate heats up...

. . .the Vorticians are coming! (SF Palace hotel October 24-26)

By Tom Foremski for SiliconValleyWatcher
John Gallant is truly one of the leaders among thoughtleaders in the global information technology industry ($1 trillion plus).

My colleague Richard Koman has put together a fine piece of reporting on our respectful digital tussle: It was the most dull of times...

I just wanted to say I am flattered that Mr Gallant, Editorial Director of IDG's flagship IT publication Network World, continues to engage in discussion about my contention that IT markets are deadly dull.

. . .

I still say that information technology is not strategic. What is strategic is the thing that is yours, yours alone, that thing that is proprietary, that is your intellectual property, that only you can do--you can only get it here. That thing that is unique to you.

Information technology markets are open to any buyer. Information technology is like every part of your business, it expresses your strategic value. Your entire business is an expression of your strategic value. Your entire business is an expression of your uniqueness.

. . .

Another reason IT is not strategic:

The entire IT industry has barely been able to measure any value to white-collar productivity from more than 40 years of information technology use and investment. Let alone strategic value!

I would print that in capital letters but it looks ugly, as you can see:

THE ENTIRE IT INDUSTRY HAS BARELY BEEN ABLE TO MEASURE ANY VALUE TO WHITE-COLLAR PRODUCTIVITY FROM MORE THAN 40 YEARS OF INFORMATION TECHNOLOGY USE AND INVESTMENT. LET ALONE STRATEGIC VALUE!

What about bold?

The entire IT industry has barely been able to measure any value to white-collar productivity from 40 years of information technology use. Let alone strategic value!

The times IT might have been strategic are so few that they are probably accidental and an artifact of the law of large numbers.

Most burning question in IT

But Mr Gallant this week has written another column on what is rapidly escalating into the most publicly debated question about the state of the future IT industry today on our respective blogs.

Please read Mr Gallant's column and his Vorticians, and let us know what you think. I'll post more when I finish packing and moving apartments...

[Actually, I think John and I are most probably in larger agreement than smaller. And that the divide between us is narrow, and mostly semantic.]

Network World: Agreeing to disagree, part deux (with some small agreement this time)

Here is a taster/teaser for you from John Gallant's column in which he attacks Steve Jobs (Silicon Valley's Babe Ruth), iPod business calling it (gasp!) the iCon...

-------
(SteveJobsisprobablycrushinghisheadbetweentwowellmanicuredfingersrightnow...[hereletmegetoneforyouSteve:])

Here's John:

First off, I'm not arguing that information technology itself is exciting or fascinating. Yes, some of this stuff is innovative and quite interesting. But far be it from me to extol the sexiness of, say, storage virtualization versus an iPod, the iCon of successful consumer technology...

and the most oft-cited product I can remember. (And, Tom, I'd argue that Apple's marketing prowess was equally, if not more, responsible for the iPod's success as marrying the MP3 player with a great online music store. I don't have an iPod - imagine that! - and I still love the ads.)

Rather, what's fascinating to me - and what I argued - are the changes the enterprise IT industry is going through - changes that rival the scope of the most significant market shifts we've seen in the past. These changes are being driven by the death of client/server and the emergence of Web services-based applications. How successfully customers and suppliers navigate this transformation will make all the difference in their success or failure in the years to come.

Tom's right about a couple points in his column...

Network World: Agreeing to disagree, part deux (with some small agreement this time)

*Please remember, our comments section is back up and running!*

August 25, 2005 | Permalink | Comment on this post | Tag: Thoughtleaders
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August 24, 2005

It was the most dull of times, it was a fascinating time when one paradigm was dying and the next was not yet born

By Richard Koman for SiliconValleyWatcher

We're a little behind here, but I want to make sure folks are caught up on the running conversaton between Tom and Network World editor John Gallant. In point/counterpoint fashion, (if some of are still around who actually watched 60 Minutes in the 70s, or Saturday Night Live for that matter), here's a recap of the debate.

• In Deadly dull IT markets ..." Tom claimed that three things will keep enterprise IT in the doldrums: Maintenance spending is rising, so there is less money for new technologies; the market is controlled by one or two large players which discourages innovation; there is too much FUD in IT markets; and enterprises themselves will wither under the assault of small, nimble companies and the weight of legacy infrastructure.
  
• John responded that Tom was dead wrong, and laid out exactly why he thinks the enterprise is at a most interesting crossroads:
  

  We are at the end of the client/server era of computing. What the next era will be is not clear yet. That presents vast potential and vast risk to enterprises, who have to navigate major changes in the way they build and use computing, network and storage technology, and for the vendors who have made their fortunes on client/server. Some of them will choose the dangerous and self-destructive path of trying to protect the current ways of doing IT, failing to learn the lessons of earlier dinosaurs who fell in market upheavals of yesteryear.

  Where we are today is analogous to the end of mainframe and mini-computer eras and the emergence of PCs, networking, the Web - shifts of vast magnitude. We're on the verge of a revolution because enterprises need IT more than ever to compete in a highly price-competitive, fast-shifting marketplace and they need to do IT better, smarter, faster and cheaper. They have to break the bounds of today's systems and they need much more help from the IT industry to make these changes.

  The problems that Tom cites are real. But they are symptoms of client/server's demise. They were caused by client/server (just throw cheap bandwidth, storage and servers at any problem!) and they are exactly the kinds of challenges that must be addressed in the new era. What's more, they are exactly the kinds of opportunities that smart entrepreneurs are setting their sights on today.
  

  
  

• In Tom's rejoinder he wrote, "Things seem very simple to me: strategy is strategic, not information technology. Information technology supports your business strategy. In the most cost effective, agile way, ideally. And that means open source open platform." And also: "I don't think IT has ever been strategic. Except maybe now, if you count the following approach: Don't take on any commercial proprietary software if you can help it."

• So are enterprise IT vendors the walking dead because of open source? John finds the notion unappealing.

  "I'll also agree that open source will play a huge role in the future. But I won't agree that everyone will have a plain vanilla open source (yawn) IT architecture that offers no competitive advantage. God forbid that's what the future holds for US businesses, particularly in light of the emergence of powerful global competitors. Saying that Google has built a new business on this low-cost, open source platform misses the point that Google has married that with search technology and a slew of other features and functions - embodied in its own secret sauce IT - that set the company apart. The beauty of open source and commoditization in the hardware arena is that they enable companies to devote more of their IT resources to developing applications that provide a competitive advantage. Just because you are not using off-the-shelf packages doesn't mean you aren't applying IT strategically. In fact, it will be fascinating to see how well New and Old Rules Enterprises take advantage of the power of Web services."
  

Some of John's readers have some perspective too. But don't let them have the last word. What's your opinion? Is it all about open source? Is client/server dead? And what the web services future look like - deadly dull or wide open?

August 24, 2005 | Permalink | Comment on this post | Tag: Thoughtleaders
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[Publisher's Note] Mea Culpa: Lost syndication feeds...the comments problem (fixed!) ...I'm way backed up on my emails (sorry!) ...and I'm moving apartments

By Tom Foremski for SiliconValleyWatcher

My apologies for the loss of some RSS feeds...I thought I'd do some legacy axing now instead of later... :-)

So, if you've been complaining that I haven't been posting anything lately it's probably because I'm trying to whittle things down to just RSS 2.0, (sorry...it wasn't personal.)

Comments problem

The good news is that I've traced the source of the problem we've been having with our comments section--which sometimes seems to work. I traced the problem to me, unfortunately.

I've been geeking around the past couple of days and tinkering with our Movable Type templates and scripts and CSS file. Once I get stuck into it the hours just whiz by and I haven't posted any entries.

Except that I can post about it as I am right now, therefore I'm always covered, it's always research :-)

Outside in world

But what a strangely interesting inside out world this has become.

I can write about the changing media/technology landscape; the emerging media technologies; and write about the new rules enterprises emerging--while at the same time be it.

And the strangeness of this situation makes me think that we will probably never again in our lifetimes witness this kind of massively significant intersection of trends.

It's interesting, don't you think?

August 24, 2005 | Permalink | Comment on this post | Tag: Tom Watch
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August 23, 2005

MSN sends out aggressive RSS bot, apologizes

by Richard Koman for SiliconValleyWatcher

Like a pledge who hits on every woman at a frat party in the first hour, only to be taken aside by a brother and told to chill, MSN Search is apologizing for its overly aggressive RSS bot, which was hitting feeds every 10 minutes. According to SEW there is a robots.txt command to slow things down. Says Eytan Seidman, MSN Search program manager, (and kudos to him for knowing about it, linking to it, and responding quickly):

At this point we are just experimenting and suffice to say that in our short experiment we have learned a lot. We have been a bit more zealous in our crawling then we would have liked and we are going to fix that. Thanks for the feedback!

August 23, 2005 | Permalink | Comment on this post | Tag: Microsoft [MSFT]
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If Silicon Valley is to become the Las Vegas of Innovation it has to improve the local public schools

By Tom Foremski for SiliconValleyWatcher

Following my participation in the recent Cisco panel on education and healthcare, I was inspired to spill some digital ink. I proposed helping schools use simple, inexpensive collaborative technologies to access the resources all around them, as well as within the school system, to create an environment of educational excellence.

Since then, lots of our readers have jumped in by sending in ideas and even offering technology and time, to improve the sorry state of Bay Area/Silicon Valley public schools.

There are tremendous capital, material and intellectual resources within a 30 minute car ride of any public school here. We just need to connect them up with a Craig's List type of online community built around every school.

Let's help the schools use open software and hardware, blogging software, wikis, and social networking software--all of which we have in abundance--and let's see if these technologies are game-changing technologies (as they appear to be.)

Silicon Valley survival

If Silicon Valley is going to survive and prosper, it has to become the premium brand of innovation. Otherwise it will lose ground to centers of innovation in the US and around the world.

Silicon Valley has to follow the Las Vegas strategy.

When Indian casinos appeared within a couple of hours' drive from any large population center, Las Vegas didn't die. It scrambled up the value stack.

It built grander structures and dreamlike scenarios of pirate ships battling. Amid the cannon smoke the Eiffel Tower can be seen, and the skyline of New York City...and Camelot is in the distance.

Silicon Valley needs to scramble up the value stack and become the premium brand of innovation, by building ever grander structures of imagination and dreaming big, big dreams of better worlds.

Silicon Valley cannot become the premium brand of innovation, and it cannot claim that the future is invented here, if it continues to tolerate such atrocious public schools. This is not the future ...(right?).

Because otherwise the world will see that maybe the technology-driven future is all about ignorance in the local public schools, and ignorance of the problem by elite local business communities. That could lead to substantial and lengthy pushback....and that's not good for markets...(right?).

That's why the future is clear: every Bay Area/Silicon Valley school, public or private, becomes a showcase of educational excellence. And it is all made possible because of the power of Silicon Valley's innovation and innovators.

August 23, 2005 | Permalink | Comment on this post | Tag: Future Watch
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August 22, 2005

Learning to speak Geek. . .in easy, lonesome lessons

By Tom Foremski for SiliconValleyWatcher

I speak some Geek because I used to be a software engineer 25 years ago. And I worked on some of my own web site development projects in the mid-to late 1990s.

But working full-time in the Financial Times SF/Silicon Valley bureau my tech skills were rarely needed because we had teams of copy editors, page editors, sub-editors and "dotcom" production staffs, not to mention teams of IT support people for our computers and our custom-made in-house editorial/publishing content management systems.

After leaving the Financial Times in May, 2004, to become what I call a "journalist blogger" and a media entrepeneur I've had to brush up my geek skills -- and I've enjoyed doing so.

I don't have to be a master of the geek technologies, but I should be able to get under the hood occasionally to replace a faulty spark plug. And if the camshaft needs replacing, I can figure it out--it'll take me longer, but I can do it.

Plus, it's fun work and it reminds me of the lonesome pleasures of software coding, losing days enmeshed within a software project, and being completely enveloped in a world apart.

But the most important reason that media entrepreneurs need to speak geek is that an understanding of the software technologies can potentially allow you to figure out innovative media ventures.

Also, you have to communicate with your development teams. And that means specifying what is needed--and more important, knowing what *can* be done.

There are some that will give me 50 reasons why a project is too difficult. Or that they've been doing things for 15 years and "that's not the way things are done."

Well, if you speak a little geek you know that most of the time, that kind of push-back is BS.

Instead, give me 50 different reasons a project *can* be done. Give me innovative ways of using low-cost technologies to support complex media projects.

Oh, and BTW, you had better have a good understanding of business models and business processes (an MBA doesn't hurt...)

Fortunately, Nick Aster and the others working with me on SiliconValleyWatcher and related projects are of the latter kind, the emerging class of media-savvy geeks.

[Nick is also in the middle of his "Green" MBA studies...]

August 22, 2005 | Permalink | Comment on this post | Tag: Media Watch
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August 19, 2005

Microsoft Blog Business Summit in SF: Chockablock with marketers

. . . and Robert Scoble

By Tom Foremski for SiliconValleyWatcher
I should be writing an end of week wrap but I'm exhausted from running around all over Silicon Valley. Summer is usually slow regarding news but this time it's not. And everybody I know seems to be the same way, busy.

I did gatecrash the Microsoft sponsored Business Blogging Summit reception Thursday evening and ran into the indefatigable chief editor of ZDNet Dan Farber, New Communications Blogzine publisher Jen McClure, and Phil Gomes (now blog czar at Edelman).

I didn't go to any of the sessions, but, it seems that Robert Scoble, Microsoft's "Geek Blogger" seems to have come out of the marketing closet. Check out these sessions on the first day:
In the session "In Building Traffic: Posting isn’t Enough!" Robert Scoble and Dave Taylor promise:

In this session, you'll learn some of the best ways to build blog traffic quickly, increase interest in you and your product or service, and improve your bottom-line results.

Plus:

Tips and tricks to keep your visitors coming back for more.

Later in the day Robert Scoble and Janet Johnson provide tips and tricks in the session: "Dealing with Bloggers: Partnering and Defense Strategies." Which includes:

* How to get the bloggers to deliver the right positive message(s) * Prioritizing the bloggers * The power of linking to your critics * Saying you’re sorry—what the Lawyers don’t know.

Then on day two, Robert Scoble and Dean Hachamovitch provide the keynote: "Why Microsoft is Betting Big on Bloggers and RSS." And they promised to reveal:

where the world of blogging and syndicated content is going as they create the largest single platform on which business bloggers will deliver their messages.

I'm a big fan of Robert Scoble, who writes the popular Scobleizer blog.

I first met him earlier in the year when he and I were on a Nooked sponsored panel [Nooked is also a sponsor of SiliconValleyWatcher] at the Syndicate conference in New York.

And I remember a fascinating conversation at dinner when he said he found it impossible to lie online. Every time he tried to fudge something, his readers spot it. I said maybe we could devise a sort of Turing test to see if readers could spot a lie, because I agreed with him, there is something about writing online that means you can't hide behind inauthenticity.

Robert Scoble is also a text-book brilliant example of how to blog, and how less is more. Also, until fairly recently, Microsoft barely knew he existed. Yet he is one of the giants of the blogosphere.

And Microsoft's PR department wasn't too happy with his popularity. Microsoft didn't stop him from speaking at conferences but they wouldn't give him a travel budget and he would also sometimes have to use his vacation days. That's why he had to share a room with Jeremy Pepper of POP! Public Relations at the Syndicate show--which demonstrates how his extraordinary passion for blogging surmounts any adversity.

My concern is that if Microsoft has now woken up to the power of blogs, and is now using him so blatantly as part of its marketing efforts, he will be seen as a marketer and much less so as a A-list blogger. There is a difference and I'm sure you know what I mean.

- - -

A star struck Scobleizer meets Silicon Valley's Babe Ruth: Steve Jobs

My first Steve Jobs meeting

http://www.blogbusinesssummit.com/

Blog Business Summit speakers
- - -

No Need to Click Here - I'm just claiming my feed at Feedster

August 19, 2005 | Permalink | Comment on this post | Tag: Mediasphere
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The coming era of the media engineer and media entrepreneur

. . . software engineer era ending

By Tom Foremski for SiliconValleyWatcher
There are tens of millions of programmers entering the world's job markets annually. Paradoxically, this global expansion of the geek population means the end of the era of the software engineer/coder as the most important profession in Silicon Valley - and in other centers of innovation.

Why? Because it is a common commodity. Software, servers and algorithms are cheap and are going to get cheaper. That's why Internet 2.0, this next phase of the internet (lower-case "i" please) will become the era of the "media engineer" - tech-savvy content producers, including journalists.

There are very few of them and the global pool grows slowly. [It's easier teaching geek to creative people than the other way around.]

It's all about the content

Google, for example, uses servers and software and algorithms to produce content - they publish pages of machine-harvested links. Yes, it's not easy to do well, but it's not that difficult for others to do reasonably well.

What counts, at the end of the day, is that Google's links have to point to something of value, to content that has not been machine-harvested or machine-aggregated. Producing content such as news stories, features, and reviews, is not cheap. It is produced by media professionals, not machines. And increasingly, it will be produced by tech-savvy media professionals.

That is why finally, content will be king, imho. (I bought ContentWillBeKing.com about a year ago!)

This is now the era of the media engineer and media entrepreneur because the future is all about technology-enabled media companies.

[Oh, and BTW, every future company is a technology-enabled media company :-). . .]

Also see: Journalists need to learn to speak some geek

August 19, 2005 | Permalink | Comment on this post | Tag: Media Watch
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August 18, 2005

A Gallant attempt at making IT interesting...

By Tom Foremski for SiliconValleyWatcher

Just in time for Thoughtleader Thursday, John Gallant, editorial director of Network World, in Boston, takes on my recent post about deadly dull IT markets.

In his column, Mr Gallant says some very kind words about SVW (making me blush), and he argues passionately that information technology is strategic and even exciting.

From NetworkWorld Weblogs: Agreeing to disagree on the future of enterprise IT.

I had met with Mr Gallant and Geoffrey Moore when they were doing the rounds recently to raise interest in their forthcoming Vortex IT conference. Mr Moore has a new book due out early next year.

Mr Moore continues to believe that information technology is strategic. "It just has to be" he said, "otherwise our living standards are in jeopardy." I asked if it was his personal living standards he was worried about, but in fact not, it was all our living standards.

[BTW, I think Mr Moore is dead-on right, all our personal living standards will decline. It is because information technology has helped accelerate the natural processes within capitalism that constantly seek to trade and thus redistribute wealth globally.]

Things seem very simple to me: strategy is strategic, not information technology. Information technology supports your business strategy. In the most cost effective, agile way, ideally. And that means open source open platform.

Apple and its iPod are often used as an example of a successful technology driven business.

But is there anything information-technology-strategic about Apple's iPod? Or even anything exciting about the technology? There are a hundred makers of MP3 players. A player is just a hard drive and a chip.

Selling music online? Heck, I can do that right here with a link.

What *was* strategic about the Apple iPod business was Steve Jobs' brilliant strategy to marry the hardware device with the web service with the desktop. And that kind of strategy is very difficult to copy, (which makes it even more strategic ;-)

I sometimes wonder what was strategic about the SABRE airplane reservations system, the poster child of the IT-is-strategic movement? It seems to me that American Airlines, the owner, had simply increased its opportunities to offer quotes on the search pages. Strategic placement of quotes on the page is a great strategy -- supported by IT.

IT strategy now

I don't think IT has ever been strategic. Except maybe now, if you count the following approach: Don't take on any commercial proprietary software if you can help it.

This has become so common in Silicon Valley. I cannot tell you how many big (Google) and smaller (Become.com) companies tell me, we use Linux, MySQL, etc. We are huge open source open platform users, we have virtually no commercial software. That's the kind of IT strategy I'm seeing.

- - - -
Here you go gentlemen, let me help you in your quest with a free advertisement for the Vortex conference:

But please be aware gentle readers, it is invitation only but if you register by September 23 you can get a preferred rate.

VORTEX 2005: October 24-26, The Palace Hotel San Francisco, CA Join John Gallant, Geoffrey Moore and key stakeholders in enterprise IT -- including IT industry executives, up-and-coming technology disruptors and investors-to reset and renew the agenda for the $1 trillion enterprise IT market.

Click here for more information about VORTEX

http://www.networkworld.com/

http://www.networkworld.com/weblogs/vortex/2005/009795.html

August 18, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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The monetization of ironic incidents...

. . . rare insight into blogging #64

By Tom Foremski for SiliconValleyWatcher

Wednesday I was due to meet with a consultant to some of the most senior Silicon Valley executives.

His advice spans business and lifestyle. He helps our harried elite find balance in their lives. Yoga, etc.

However, I was up until 5am trying to import my contacts file into Gmail and missed the meeting. This puzzle of why I couldn't import my contacts file took up most of my day (and night). I knew that it was all totally unnecessary but I couldn't let it go and that's why I missed the meeting and I apologize.

My life is out of balance but (it is Always On [Tony, you are dead right...!]) what can you do?

One of these days my life will be in balance and I will be able to visit with him. That's my goal, maybe even next week if I can reschedule.

August 18, 2005 | Permalink | Comment on this post | Tag: Tom Watch
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August 17, 2005

Journalists need to learn to speak some geek. . .

. . .and learn to type

By Tom Foremski for SiliconValleyWatcher
Journalists have had it far too easy, for far too long, compared with the geek professionals--especially those involved in coding, scripting and building online sites.

In those professions you have to upgrade your skills constantly. There's an astounding number of alphabet-soup technology acronyms that you need in your toolkit.

Five or six years ago web site developers just needed to know HTML tags and some simple applications and tools.

Today they need to know HTML, XML, PHP, PERL, MySQL, Linux, Flash, Javascript, and CSS. And also be a master of sophisticated applications such as DreamWeaver, Movable Type, Illustrator, PhotoShop, plus they had had better have a good understanding of the underlying business processes.

Yet journalists barely know how to type, or even how to spell (v. true believe it or not).

Most journalists don't know a lick of HTML or even much about their software and hardware beyond the basics familiar to a 10-year-old.

That's going to have to change as the print/broadcast world, on which journalism was been built, becomes a mostly online mediasphere (I include the blogosphere in this;-).

Journalists are going to have to learn to speak some geek, because increasingly, they will not only be researching and writing, but also producing and editing and publishing online too.

Yes, journalists are very skilled, despite barely knowing how to operate a keyboard. They know how to tell stories, how to research, how to interview, how to structure ideas, how to communicate complex concepts, to ask the right questions. And, they have the essential skill of being able to sniff out a story.

These, and the many other skills journalists have, are extremely valuable, and they take time to develop. It's a skill set that cannot be easily or quickly learned (or outsourced).

Dump your word processor

My recommendation to fellow journalists preparing for the new world is to dump your word processor.

Microsoft Word and the others, were created to format printed pages and they litter your copy with invisible control characters that need to be stripped out for online publishing.

You should be using a HTML text editor--it produces clean copy and it enables you to embed links and scripts.

I really like EditPlus, and for online research and note taking I really like EverNote Plus.

August 17, 2005 | Permalink | Comment on this post | Tag: Media Watch
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August 12, 2005

. . . the end of week wrapper

By Tom Foremski for SiliconValleyWatcher

It was a very good week for stories again. Whenever I hear other journalists complain that there are no stories around, I shake my head (slowly and sadly). I keep finding so many that I never have the time to write them all.

Here are some of the week's highlights:

I'm on Cisco's first podcast, a historic occasion, a media roundtable discussion about education and healthcare with John Chambers and the heads of VeriSign, NASDAQ and HealthRay.
Cisco opens NASDAQ virtually. . .

Cisco panel on virtuality...

The panel inspired me to get something going, a Doc Searls snowball type of thing. It was when the moderator Jim Goldman, Silicon Valley Bureau Chief, CNBC, said, "Well, what's the next step, what do we do this afternoon?"

It reminded me of the recent "Die, Hippie, Die" episode of South Park.

I realized that this was the most important question. The entire panel agreed that public education in Silicon Valley was terrible and had to be improved. So now what? What do we do this afternoon?

I spent part of my afternoon writing this post about a new rules approach to helping our schools. Maybe you, wise SVW reader, could add a few ideas to this new rules community idea. Maybe we can open-source it somehow - let me know what you think. Also, we need somebody to coordinate things...to help aggregate the thoughtleaders on this topic.

A call for a New Rules community platform centered on education and public schools

Scoop: Friendster-the enterprise business platform

I ran into Dave Kochbeck, Director of Operations at Friendster, at a Novell/Horn group media roundtable earlier in the week. He's a very interesting guy and he completely remade my impression of Friendster.

The original social media network is growing up; and its going to be making its platform available to other businesses. In other words, as Dave said, "It has to be about more than just getting teenagers laid." That's a killer quote - Dave knows the value of a soundbite.

Dave worked on the Howard Dean presidential campaign and he admits that the lure of the political world still tugs at him. He's got some interesting ideas about tying together political and social media networks.

Friendster as an enterprise platform makes perfect sense. After all, business relationships are all about personal relationships. And Friendster has been developing some algorithms that map relationships between people in interesting ways - though that work is still in the lab.

Oh, BTW, if you aren't a user, don't apply for any jobs at Friendster. They'll check, and a low membership number helps too.

. . .

My Microsoft AntiSpyware has never found any spyware on my computer. It must be very good. I guess when PestPatrol finds 80 pests, and then erases them, it just likes to look like it's busy.

. . .

What's GoingOn? It's AlwaysOn-the platform

Joining the enterprise platform market is the media technology developed by AlwaysOn, the visionary online magazine/blog/wiki/social network/insider network/forum/print publication media company. Founder Tony Perkins tells me that anybody can license and use the platform. Marc Cantor is handling the sales/infrastructure side of things.

Tony says that SiliconValleyWatcher could use the AlwaysOn platform. Interesting offer, I might try that out.

I asked Tony if possibly some of his enterprise software advertisers and sponsors of AlwaysOn might feel that he is now in competition with them to some degree. They might be asking themselves what's going on?

Tony said he didn't see a problem at all; they are two seperate ventures, AlwaysOn is the media company and GoingOn is the software company.

I admire Tony's bravado. It's a bold move. Media markets are tough, and enterprise software markets are even tougher. And it is even harder to do it this way. I think if GoingOn created AlwaysOn, that would be the killer strategy. I'm sure it's still a killer strategy.

BTW, If you want all the details, funding, etc, here's Matt Marshall at the always excellent Silicon Beat. (This is one reason I love blogging, you can point to excellent work by other journalists and save yourself from writing a lot of boring bits.)

RackSpace keeps scaling

John Engates CTO of RackSpace, the fast growing web hosting company, was in town this week for LinuxWorld and we caught up for a few minutes. He's become one of my favorite sources for reporting from the front lines of the future data center.

With more than 13,000 servers and a 50/50 mix of Linux and Microsoft, John has a view like few others into the top issues facing large computer centers.

In addition, he has thousands of customers, and each needs its servers set up in specific ways. Try managing that environment and sleeping at night.

I have an interview with John from a couple of weeks ago, I've been waiting for the right time to publish it. It'll be in a Thoughtleader Thursday coming up soon.

Real tales of legacy systems...

One large financial services company, I was told, has so many legacy computer systems that they don't know which applications run on which computers. The way they find out is by unplugging them one by one, and seeing which department starts calling tech support.

Another financial services company somehow walled-in a bank of four servers. The company IT staff could not find out where the "ghost" servers were located. They finally had to follow the wiring and discovered them behind a brick wall. [I wonder if it was cheaper to leave them there and depreciate them than tear down the wall?]

Fencing the commons -- the plot to shut down the open source movement

I wrote a piece this week about my concerns that open source tech development could be stopped by wrapping it in proprietary intellectual property. I see this "fencing of the commons" happening everywhere, such as Verizon trying to stop municipalities from offering public wi-fi networks, so that you always have to go through a commercial choke-point to reach the Internet.

I think the open source movement will one day be seen as one of the most significant contributions to humanity. So I hope it continues to prosper.

But I ran into Gary Edwards, of OpenStack Business Systems; and what he told me was very worrysome.

He's been involved in the OASIS and prior standards groups for nearly two decades, and he says there is a concerted effort to try to shut down the open spource movement. I'll tell you more about it over the next few weeks, and why the GPL licence is open source's most sacred document, and its only protector.

Fencing the commons...

. . .

Do you think there might be interest in a weekly [T+OM] podcast? The Watcher plus the Universal Sound of all that is Broadband...what do you think? A kind of Friday Wrap with special guests even, maybe?

. . .

Look out for more Friday Watch items...

And also, please subscribe to our email newsletter, we're still pulling the format together (it's always in beta) but we have some interesting ideas for it.

And don't forget to come out for a trip to NYC in mid-September to see Joe Trippi, IBM's Jim Finn, and Google's top advertising strategist at Impact'05. I'll be on a panel with Mr Trippi. Just mention SVW and you've saved $100.
Details here.

August 12, 2005 | Permalink | Comment on this post | Tag: Friday Watch
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August 11, 2005

A call for a New Rules community platform centered on education and public schools

By Tom Foremski for SiliconValleyWatcher

I wrote about the issue of Silicon Valley's terrible public schools earlier this year. I got some great responses on the subject. But Dan Gillmor berated me for berating Silicon Valley. "Berating doesn't work," he told me at a recent event.

Well, not berating Silicon Valley doesn't work either then, at least it makes me feel better, if nothing else.

But I also realized that there is a lot of work being done by leading Silicon Valley companies such as Cisco, Sun, HP and many others, around the subject of education. And they all seem worthy projects, yet the results of all that do-gooding are hard to find.

Here's my take for a "new rules" philanthropic education effort, (and it means we ditch the non-profit company approach, even if it means losing that tax deduction, I'll explain.)

And please, take the following and add to it, or change it, or whatever else needs to be done to change things, these are just a few ideas to maybe develop an open source business model that will make a big difference in our communities, and become a blueprint for other communities too. This is a work in progress:

New Rules Community Platform

-Let's combine most of the local educational efforts by tech companies into one organization, say call it SVFuture.

-The mission of SVFuture would be to enable public schools to use digital collaborative technologies to communicate with their local communities and to tap the many sorts of resources within those communities. The premise is that there is a tremendous amount of knowledge, material, and volunteer labor within each community, to enable every public school to become a center of educational excellence.

-SVFuture would use open standard open platform technologies.

-SVFuture is not a not for profit, it is schedule C or S or LLC--but the idea is not to be limited by the limits on not for profit companies.

-At SVFuture it is OK to make a profit because it means it becomes self sustaining, it does not require further handouts or distractions in begging for supporting funds.

-SVFuture is a "not for loss" company rather than "not for profit." It is an idea borrowed from Muhammad Yunus, founder of the Grameen Bank, a not for loss business that makes micro-loans and has created an enormous amount of value in the developing world.

-SVFuture's mission is to offer free collaborative and community building software to schools. I'd like to see a wiki in every school, for example. I've mentioned this to Ross Mayfield , CEO of SocialText, and Joe Kraus at JotSpot. They like the idea. And wikis are simple technologies that can help schools by drawing on the resources of the community.

-SVFuture would help build a type of "Craig's List" community around each school, plus a teacher/class blogging platform, plus a request for supplies or skills from classrooms, plus sharing of community resources both physical (e.g. projectors, meeting rooms) and people (teacher assistants, baby sitters, etc.) Schools would become the centers of their communities, because we know that more parent involvement in schools leads to better education.

-SVFuture would collect best practices, templates, etc, to share with other schools.

-SVFuture would offer a public wi-fi service to the community around each adopted school for a fee that covers costs. It would charge commercial and government establishments higher rates for this service.

-Because SVFuture is a normal commercial entity, the objections of Verizon or any other company to municipalities/public organizations offering public wi-fi at low rates would be removed. In fact, SVFuture rates might even be higher than from a competitor, but the social value returned would be recognized by its customers and they would willingly pay a premium.

-SVFuture revenues would also come from the community: local advertisers, ad postings, classes in computer skills, etc.

-SVFuture might experiment with different tech architectures, such as harvesting spare microprocessor cycles from the community. Wireless bandwidth could be shared more openly by each household, for example, (the way it once was.)

-SVFuture would be a commercial company in other ways too, it could pay competitive salaries for example. This would enable "not for loss" companies to attract larger numbers of talented people.

-SVFuture if it can be made to work, would help make wireless, and wired broadband a reality sooner, rather than later for many communities. That means the US builds its 21st century infrastructure faster, and more efficiently.

-SVFuture would show that doing good can be made profitable and sustainable.

But we need somebody to take it on and lead this new rules educational initiative, or something like it...anybody want to make history?

In the meantime, send me your ideas, let's compile an open source business model around education.

August 11, 2005 | Permalink | Comment on this post | Tag: Thoughtleaders
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Cisco chief says Silicon Valley public schools are an embarrassment. . .

. . . and names education and healthcare as the two largest issues facing US businesses

By Tom Foremski for SiliconValleyWatcher

I was on a very interesting panel Wednesday morning at Cisco. With 12 panelists, it could have been a bogged-down-and-dreary-event with much waffling about "virtuality" and how it will boost healthcare and education.

Instead, it turned into a very spirited discussion, as the journalists on the panel took on some of the sometimes empty rhetoric of corporate-market-speak from the heads of three large US technology companies: Cisco, NASDAQ and VeriSign, and startup RelayHealth. And in the process, some of the corporate-market-speak at times gave way to a real discussion.

Wendy Kopp, the charismatic founder of Teach for America, made some good observations given that she admitted that she had not a single minute thinking about tech. And Jim Goldman of CNBC rolled with the flow as the panel's moderator, keeping things moving. I know I took away a lot more than I expected from the event. In a first for Cisco, the event was podcast as well as webcast.

[Panelist list is at end of post, along with a link to the podcast.]

The event was to discuss "virtuality" and how this technology would improve healthcare and education.

After ten minutes it became clear that "virtuality" was one of those words that had yet to crystallize around an agreed upon definition; so it virtually disappeared from further use, and the group moved onto a much broader discussion about why public education is so bad, and why the healthcare sector has resisted investments in technology.

Mr Chambers initially presented a rosy view of a healthcare system making use of computer technologies to save lives, and the cost savings they would recover. However, a carrot also comes with a stick, and during a further conversation he warned that large corporations would force changes on healthcare providers.

He said Cisco's healthcare costs had skyrocketed over the past five years - "and we're a relatively young company." It is a burden that cannot be maintained and it requires exposing the healthcare system to direct market forces, instead of the insurance companies. That would then encourage healthcare organizations to invest in IT for the cost savings.

At one point I complained that if Silicon Valley wants to be seen as the premium brand of global innovation, that this is the place where the future is invented, it had better make sure its public schools are showcases, not basket cases.

John Chambers, chief executive of Cisco agreed, saying it was embarrassing that the K through 12 public education system is broken in Silicon Valley.

Mr Chambers has put a lot of work and money into political campaigns around educational issues, such as school vouchers, a sometimes controversial method to prod schools toward higher academic performance.

He admitted that technologies such as distance learning, had not proved themselves as expected. But he said Cisco studies showed they did have value in short 10 to 15 minute online lessons, along with other educational materials.

Panelists:

John Chambers, CEO, Cisco Systems, Inc.
• Bob Greifeld, President & CEO, NASDAQ
• Stratton Sclavos, CEO, VeriSign
• Giovanni Colella, CEO, RelayHealth
• Wendy Kopp, Founder, Teach for America
• Moderator: Jim Goldman, Silicon Valley Bureau Chief, CNBC

• Quentin Hardy - Silicon Valley Bureau Chief, Forbes
• Tom Foremski - Silicon Valley Watcher
• Paul Kapustka – Editor, CMP
• Carrie Kirby – Reporter, San Francisco Chronicle
• Mark Boslet – Reporter – Dow Jones
• Aye Furato – Reporter, Nikkei

Also: Listen to the discussion with Cisco's first-ever podcast, featuring John Chambers and other Silicon Valley leaders.

August 11, 2005 | Permalink | Comment on this post | Tag: Thoughtleaders
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Mid-September gets a little Trippi..Impact '05 conference at NYU

By Tom Foremski for SiliconValleyWatcher

I'm enjoying speaking on panels, and I seem to be doing at least one per week.

I'm really looking forward to this one: I'll be on a panel with Joe Trippi, Howard Dean's famous Internet strategist, September 15, at New York University Impact '05-New Channels of Influence.

Mr Trippi is credited with figuring out how to use blogging software to galvanize large numbers of young people into political action. Even though his technical skills are legendary for their rarity, Mr Trippi understands that it's not about technology; what counts is how you use it.

Andy Plesser and Kent Holland, of the New York firm Plesser Holland Associates are organising the conference. And because I'm doing it for couch space in Andy's basement, and a Jet Blue flight, Andy says SiliconValleyWatcher readers can save $100 off the $475 conference price. So, mention SiliconValleyWatcher and save $100 when you visit Impact '05.

And I just found out who else is going to be there. He was probably one of the top ten most prominent people in Silicon Valley over the past two years...

Yes, Jim Finn will be there, the former comms chief at Oracle, now back at his alma mater IBM.

And, that's not all, Google's top advertising strategist, Patrick Keane will be there too...

A stellar conference line up, plus autumn in New York? How can you resist?

- - -

Here's the line up:

:: Ron Alsop, Senior Writer, The Wall Street Journal
:: Paul Argenti, Professor of Corporate Communications, Tuck School at Dartmouth
:: Lewis D’Vorkin, VP, Editor-in-Chief, News and Sports, America Online, Inc.
:: Jim Finn, Vice President of Corporate Communications, IBM
:: Tom Foremski, Editor and Publisher, Silicon Valley Watcher
:: Tom Groppe, Executive Editor, Electronic Media, The Deal LLC
:: Julia Hood, Editor-in-Chief, PR Week
:: Patrick Keane, Head of Advertising Sales Strategy, Google
:: Jim Kennedy, Vice President, Director of Strategic Planning, The Associated Press
:: Kevin Maney, Technology Columnist, USA Today
:: Jason Pontin, Editor-in-Chief, MIT’s Technology Review
:: Shoba Purushothaman, CEO and Co-Founder, The NewsMarket
:: Scott Raynovich, US Editor (New York), Light Reading
:: Jai Singh, Editor-in-Chief, CNET Networks
:: Joe Trippi, Political Strategist
:: Joan Walsh, Editor-in-Chief, Salon.com

For information call Plesser Holland Associates at 212-420-8383, ext. 100 or impact@plesser.com

http://www.impactconferences.com/

August 11, 2005 | Permalink | Comment on this post | Tag: About SVW
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August 10, 2005

Cisco opens NASDAQ virtually in auditorium filled with two thousand employees

By Tom Foremski for SiliconValleyWatcher

It's an early start for me Wednesday morning, as I head off from San Francisco to virtually San Jose, for a webcast discussion at Cisco Systems on virtualization technology [it's the older meaning of virtualization, not the server kind.]

For 2,000 Cisco employees, their day will start much earlier than mine, they chose to be present at the first virtual opening of the 34- year old NASDAQ market. That means be in your seats by 6.30am, my webcast discussion doesn't begin until 9.30 am :-)

It should be a fun discussion here is the lineup:

Participants: • John Chambers, President & CEO, Cisco Systems, Inc. • Bob Greifeld, President & CEO, NASDAQ • Stratton Sclavos, CEO, VeriSign • Giovanni Colella, CEO, RelayHealth • Wendy Kopp, Founder, Teach for America • Moderator: Jim Goldman, Silicon Valley Bureau Chief, CNBC

Active Media Participants:

• Quentin Hardy - Silicon Valley Bureau Chief, Forbes
• Tom Foremski - Silicon Valley Watcher (formerly a reporter at Financial Times who left to create a Technology Blog, Siliconvalleywatcher.com)
• Paul Kapustska – Editor, CMP (Information Week, Networking Magazine)
• Carrie Kirby – Reporter, San Francisco Chronicle
• Mark Boslet – Reporter – Dow Jones
• Helene Laube – Reporter, Financial Times Deutschland
• Aye Furato – Reporter, Nikkei

I'm flattered to be a part of a such an august gathering. I guess things have progressed quite far for "blogger journalists" if SiliconValleyWatcher is considered part of the local media establishment in Silicon Valley.

Usually, I'm invited to such events to offer a disruptive perspective and spice things up a little. Some see me as a representative of a disruptive technology in the living flesh(!). In this case, the disruptive technology is the blogging publishing platform. It's just one part of a panoply of disruptive media technologies.

And I'd rather be on the disruptive end of things than the receiving end :-)

Except that the disrupted media still have a business model, crumbling though it might be, while online media business models are still in development :-(

Happy 20th Anniversary

The NASDAQ opening is part of Cisco's 20th anniversary celebrations. If only I had invested a couple of $K in Cisco stock when I arrived here 20 years ago. . . Instead, I filed numerous press releases from Cisco (snail mail then) in the circular folder.

What can I say? Routers were very boring subjects to write about in 1985 and remained so for about another decade (or two).

Almost real

For the NASDAQ opening, Cisco has gone to great lengths to recreate the huge video wall of monitors that form the backdrop of the opening bell in New York. Cisco has tiled together 32 monitor screens, not quite the 96 NASDAQ has, but the effect should be virtually the same.

From Cisco:

Using a high-speed, dual-path and highly-secure private IP network, data is routed from NASDAQ's New York MarketSite to Cisco's Silicon Valley virtual MarketSite...

My suggestion would have been to "blue screen" the NASDAQ video wall and have a techie in New York press the "on" switch when John Chambers hits the opening bell/button at this end. That's virtualization and it would save a buck or two.

Cisco Innovation Study

Cisco is releasing parts of its Innovation 2005 Study.
Cisco, because of its size, is responsible for a huge amount of innovation in Silicon Valley. That's because there are more than a thousand startups that would love to be bought by Cisco, and VCs are funding that innovation.

But that might be changing. With all the consolidation among the big tech companies, there is less competition for buying those startups, and valuations are kept fairly reasonable.

And reasonable valuations don't encourage VC investments in the next crop of startups, which means less innovation. Or is my math wrong?

- - - - - - - - - --

Here are the online details:

Webcast: Those interested in attending this industry discussion via Webcast can register at: http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=28103&script=1010&item_id=1112472

Podcast: 24 hours after the event and can be accessed at: http://newsroom.cisco.com/dlls/2005/hd_080505.html

Virtual Open:
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=28103&script=1010&item_id=1111658
Virtual Close:
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=28103&script=1010&item_id=1113135

Q&A with John Chambers on virtualization.

http://newsroom.cisco.com/dlls/2005/hd_081005.html

August 10, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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August 8, 2005

It's Linux week in San Francisco...

By Tom Foremski for SiliconValleyWatcher

LinuxWorld is in town and I haven't seen this much activity around a trade show in years. Actually, if you think about it, this is not surprising because it is becoming such a bedrock foundation of today's enterprise software world.

Linux, as the spearhead for the open source movement, has also become the metaphor for how to succeed in today's IT world. The metaphor is: take advantage of community property and layer your secret/proprietary sauce on top.

The interesting thing about LinuxWorld, and Linux in general, is the enormous amount of open source applications and technologies that are available. It's not just Linux, it's a ton of apps and technologies. Which means business opportunities in making all of this stuff work together.

The business opportunities are in the integration of stack/apps layers; offering complete ready-out-of-the-box-stacks; and, v. important, a one-stop one-page license (IP management tools.) Plus mixed-systems admin tools etc...

In terms of developing succesful business models based on open source technologies, the questions are: how far can you go in layering proprietary technologies on top of a "commons" infrastructure before you halt the community development process?

Will open source become contained within a proprietary shell?

Will we see the "fencing" of the commons as in pre-industrial England?

Or will the open-source steamroller eventually flatten those that can't scramble up the stack (or over to the next fence) fast enough?

- - -

BTW, kudos to Novell and the Horn Group for putting together an interesting industry/media round table at the Town Hall restaurant Monday evening. Novell invited some its top customers and top media to mix and mingle, and that takes guts, because you don't know what customers will say during the course of the evening. But hey, if you can walk the walk, why not?

It was a compelling mix of people and I walked away with pocketfuls of interesting stories, and it sparked new ideas to explore. More later this week. . .

PS: I think that the open source movement will one day be recognised as one of the most important contributions by a group of people, for a common good. (So don't choke it with proprietary layers. . . pretty please :-)

LinuxWorld Details.

Also, read SVW on Wind River Systems "How I learned to love Linux and profit from it--Wind River turns from Linux basher to religious zealot."

- - - -

No Need to Click Here - I'm just claiming my feed at Feedster

August 8, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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August 5, 2005

I've been taking a little time off with my daughter Sarah and son Matthew ...see you around Monterey

Here is Sarah, in the blue shirt, just recently 11 years old, with her best friend Lilly, now also 11 years old--(happy birthday Lilly!):

- - - - - - - - - - - - -

Here is my 17 year old son Matthew, who is cultivating a reclusive spider-like persona ;-) [he has editing rights so this image might not last long...]

August 5, 2005 | Permalink | Comment on this post | Tag: Tom Watch
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A community of thought leaders---more thoughts on new rules enterprises

. . plus more thought leader columns from others are on their way

By Tom Foremski for SiliconValleyWatcher.com

In January, I started writing about the "new dotcoms," the ones that will eat lunch, this time around, in the new Internet economy.

The new dotcoms are not technology companies, necessarily, but they are all "technology enabled" companies. And they will play by whole sets of new rules, many of which challenge the old rules, the established notions of business reality.

I call these new dotcoms new rules enterprises, or sometimes I call them newrules ventures [I can't decide which one to use.]

There are new rules enterprises of various sorts, and their distinction is in which new rules they embody, and how many of them. There are already some newrules ventures around, and more are on the way.

They share some of these characteristics: most are small, they have a large impact, and they are very profitable — you have no idea how much money they are making.

They are private, and will remain private, they have first mover advantage, and they innovate through technology enabled business processes.

And they capitalise themselves through creating and selling businesses.

The rules

I don't know how many new rules there are altogether, but I know what some of the rules are, and some of my readers have told also me about some of them.

Here is one of the original new rules of the newrules enterprise, and some from our community of contributors. And please, contribute your new rules, too. Remember, you get a byline and a date stamp!

When you contribute ideas there will always be a permanent link to your words of wisdom. This means you should contribute often :-)

First rule

The first rule of the newrules enterprise is that it is new. Brand spanking new.

That way you don't have to deal with layers of legacy information technology, culture, administration, departments, all the legacy thinking and legacy reputations. A whole lot of problems and obstacles go away.

You can read more about the rules of newrules enterprises here:

These are the new dotcoms of the new rules economy...

Here are some new rules contributions posted earlier this year:

John Kim writes:

When I go to a venture forum in the bay area now and hear "entrepreneurs" whining about how they could launch a Billion dollar company "only if we could find an investor..." I want to puke.
There is no better way to get people to understand your business than to show them the money your business is making - and how you made it on a shoestring.
So let me add one more rule - Surround yourself with zealots ONLY early on, and think like you're building a new religion as much as a new business.

[BTW - I define "zealot" as someone who quits a $100k a year job for a $30k year start-up position.]

Jeff Clavier notes:

I would extend the fifth rule [no VC funding needed] to include some level of angel or seed financing, that allows you to get all the way to a critical milestone: profitability, early take out or a "real" VC financing focusing on growth.

I'd like to bring to your attention again, to a new rule that I've been thinking about a lot, it comes from Greg Gianforte, CEO of RightNow Technologies.

Without VC money, you are forced to figure out how to extract funds from your customers for value you deliver. Ultimately that is the only thing that really matters.

-Money removes spending discipline. If you have the money you will spend it - whether you have figured out your business model and
market or not.

Read more here:
Most startups should avoid venture funding, not pursue it

August 5, 2005 | Permalink | Comment on this post | Tag: Thoughtleaders
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August 3, 2005

Using the human touch as a cornerstone business strategy: Can Champ Mitchell remake former powerhouse Network Solutions?

. . . transforming a former mining community into web consultants

By Tom Foremski for SiliconValleyWatcher

I recently interviewed Champ Mitchell, CEO of Network Solutions, a company that once dominated the domain name registration market.

GoDaddy seems to have pretty much taken over this market, in which domain names now sell for as little as $8 per year, making for a $2 profit before expenses ($6 goes to VeriSign to administer the domain name server infrastructure.) During the bubble, people were paying more than $100 to register a domain name for one year.

So how do you revamp a big brand like Network Solutions when your traditional market of selling domain name registrations has become commoditized, and so have all the associated services such as web hosting?

The classic response is to scramble up the value stack and head for higher-margin territory. And that's what Mr Mitchell has been working on, replacing much of the old management and pursuing a strategy that runs counter to the dominant market trends.

Here are the differences between the old rules — the accepted notions about how business is done - and the potential new rules, the emerging business-model innovations of what I call the "new rules enterprise."

Network Solutions is in a market that is focused on small businesses and their need to leverage the proven value of search-based online marketing. It's a potentially massive market for selling domain names, website hosting, website building services, and third-party products such as security, payment processing, and marketing.

Old Rules: Use a self-service model as much as possible. Let customers fill out all the information, educate themselves on what website services they might need. Cross-sell them at every new page view.

Network Solutions: Use human specialists to guide small-business owners through what they need, do not cross-sell or try to up-sell, only offer best solutions.

Old Rules: Minimize any live contact with a customer, use telephone support as sparingly as possible, reward your telephone staff for keeping all calls as short as possible.

Network Solutions: Use the telephone as much as possible, reward your telephone operators for spending more time talking with customers. It takes about an hour of conversation with a Network Solutions telephone consultant to acquire a customer.

Old Rules: Force customers to learn and find their own remedy to a problem through an online knowledge base, and users-helping-users forums.

Network Solutions: Call us anytime and speak with a live person, or speak with your favorite consultant.

Old Rules: Force customers to learn html and educate themselves about web technologies.

Network Solutions: "I have banned html or any techie terms. Small-business people are very smart, and they don't need to be tech savvy to establish an online storefront," says Mr Mitchell.

Old Rules: Sell mostly third-party products because your expertise is in marketing, not in developing software or web services. Use an affiliate program to get swarms of third party marketers to sell for you.

Network Solutions: Own your key products. About 90 per cent of its revenues come from its own products and 10 per cent from third party products.

"With one hour being an average time spent per first customer, we had to make sure the quality of our products was high, and would remain very high quality. And also very simple to use, which is the hardest part by far," Mr Mitchell explains.

Network Solutions owns and funds the development of its web site building products and services.

Here's another advantage of the human contact strategy: Network Solutions hears directly from its customers about what they need, their problems and their issues. It is collecting a treasure trove of invaluable market research. And that gets fed back into the development cycle.

And customers feel they've been treated like royalty, because they are speaking with a human, and they know how expensive that is and how rare.

From mining to web consulting

So, you are wondering, is the human contact with someone in a foreign land? Nope, the people on the telephones are mostly from a former mining community in Pennsylvania and they survived a tough 6 week initial boot camp which filtered out about half of them. Then they headed into further educational courses.

Network Solutions has very tight controls on affiliate marketing - again, to maintain quality control of the customer experience.

- - -

Does Network Solutions have a winning strategy? Is it wise to challenge the old rules, the proven business models in their market?

Rules are made to be challenged and sometimes broken — revealing new routes to profits.

But old rules usually have become accepted notions and are less visible, and less likely to be challenged.

It'll be interesting to watch if Mr Mitchell can execute this new-rules strategy, and if it results in a more profitable business model.

- - - - - - -

Letter from Champ Mitchell on this week's launch of an online storefront.

VeriSign Completes Sale of Network Solutions Unit to Pivotal Private Equity. November 25, 2003

August 3, 2005 | Permalink | Comment on this post | Tag: New Rules
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August 2, 2005

My first podcast. . .

By Tom Foremski for SiliconValleyWatcher.com

I took part in my first podcast last Friday afternoon, an enjoyable chat with Sam Whitmore, from "Sam Whitmore's Media Survey." We chatted about the upcoming IDG conference Vortex, featuring Geoffrey Moore and John Gallant of Network World, and also the BlogHer conference.

We're going to do these on a regular basis, say once every few weeks, so let me and Sam know what you think. (BTW, no filthy lucre has been exchanged—at least none heading my way :-)

Sam interviewed me for the first time early this year, for one of his live weekly teleconferences. And I met Sam recently at a Horn Group panel we were on, and we hit it off. Sam has a radio background so he knows how to put together an entertaining podcast.

(Om Malik of GigaOm, the universal sound of broadband, and I were chatting about doing a Tom 'n Om podcast (T+Om) on the week's news events, maybe. What do you think?)

Here are Sam Whitmore's podcast details:

The SWMS Tech Media This Week podcast is now posted (10 minutes, 22 seconds).
Click on this link to listen to the Tech Media This Week podcast right now:
http://slapcast.com/users/SWMS

If you'd like to subscribe to the weekly TMTW podcast, paste the following URL into your iPodder or other podcatcher:
http://slapcast.com/rss/SWMS/index.xml

August 2, 2005 | Permalink | Comment on this post | Tag: About SVW
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August 1, 2005

Information overload is nothing compared with conversation overload

. . . life in Internet 2.0

By Tom Foremski for SiliconValleyWatcher

With the first phase of the Internet, a common issue was one of "information overload."

In this second phase of the Internet, which is marked by the use of two-way media technologies such as blogging, the issue will be one of "conversation overload."

I can deal with information overload—I've resigned myself to the fact that I can/will never be able to read/know all the things I think I should read/know. I can live with that.

But, conversation overload is different, because I *want* to have all these conversations. They are important to me.

These conversations are in email; they are in the comments written by readers of SVW and left on this and other sites; there are phone conversations to respond to; there are conversations with my kids, with my family, with my friends. With my business partners, with my colleagues, with my peers. And the conversations I have with myself.

All are important. Yet most seem started and rarely finished. Or is it just me? I think this could become a much more common issue in this Internet 2.0 phase.

August 1, 2005 | Permalink | Comment on this post | Tag: Future Watch
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It's not about the money or the stock options, it's about big ideas . . .thoughts on Microsoft lawsuit against Google for poaching staff

By Tom Foremski for SiliconValleyWatcher

Google hired Kai-Fu Lee, former vp at Microsoft, and Microsoft filed a lawsuit, which acted as warning shot over the heads of other drones considering a change.

Microsoft, in my view, should be careful because such actions bring attention to the fact that it can't match the Google pitch.

And the Google pitch is not about money or stock options, it is about vision. Google can pitch a big vision, Microsoft cannot.

People in tech get excited about big ideas--not about big money and stock options.

If you have key people in your organization excited by big money and stock options--rather than big ideas--then that is not a good thing.

Google's pitch is: if you want to change the world, come work with us. Because only we have the scale to enable you to do things on a global stage.

It's a killer pitch.

My advice to Microsoft is put the lawyers back in their kennels and work on your pitch.

- - -

From Cnet News.com Ex-Microsoft employee a million-dollar man

Kai-Fu Lee, Google's newly hired executive at the heart of a dispute with Microsoft, made more than $1 million last year at the Redmond, Wash., software giant, according to a court filing.

August 1, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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