Silicon Valley Watcher - reporting on the business of technology and media

There is a very interesting trend emerging in how companies are dealing with the key issue of business strategy. The savvy ones are beginning to realize the benefits of combining the roles of business strategy with corporate communications.

And if you think about it--it makes perfect sense because strategy and communications are naturally linked. Yet in most organizations the corporate communications is run by the marketing group. In my opinion, corporate communications and business strategy should be one and the same. And I'm beginning to see some examples of companies implementing such positions.

Here are some examples of strategic and corporate communications roles being combined:

By Tom Foremski for SiliconValleyWatcher

I've been telling the PR industry for some time now that things cannot go along as they are . . . business as usual while mainstream media goes to hell in a hand basket. I've been saying this privately and publicly and having some very useful discussions on this topic.

Since I have a disruptive role to play in mainstream PR, here is my demolition of the press release as we know and hate it today:

By Tom Foremski for SiliconValleyWatcher

SVW reader Penguin points to VC Rick Segal's recent post about the quandary venture capital is in.

To summarize: Web 2.0 companies don't need much capital and GOOG, YHOO and MSFT can step in and buy them just for the heck of it for a few million and the VCs don't get a look in. Plus there is not much distinction between the Web 2.0 startups.

Welcome to the world of the new rules startups; no VCs required, although an Angel or two helps... It's a knowledge capital world these days and GOOG and pals offer the largest platform for rolling out Web 2.0 services/products. How can VCs compete against that?

But also, there is widespread animosity towards VCs today. I've been covering Silicon Valley since 1984 and I haven't come across as much hostility towards VCs from startups, as I have over the past 18 months.

Why? Because of the many outrageous VC practices during the dotcom boom and afterwards. VCs always get their pound of flesh and then some.

But what goes around comes around. We live in a serial entrepreneur community here in Silicon Valley, and memories are still very fresh.

The strategy for startups these days is to bootstrap--go for Angels if you need money. And if you do need to pitch the Sandhill row, first raise your valuation as much as possible through your own efforts and financing.

I have a lot of respect for many VCs. Those are usually the ones I come into contact with, because they are out and about and pitching their investments.

There are hundreds of VCs that I never come across and seem to be baffled about what to invest in; they follow each other with a herd mentality and thus mess up the markets for all; and with almost no IPO market exit strategies rely on selling out to one of a small number of large companies--which keeps valuations in check.

When I recently met with VC M.R. Rangaswami of Sandhill.com, he said there were still too many VCs, and that the industry must come to terms with the fact that future returns on investments will be far lower than at traditional levels.

That means VCs have to tell investors in their funds to expect smaller gains. That's a tough sell, especially since the risk has not decreased. I could argue that the risk of failure for VC-backed startups has increased. . .(more on that in future posts).

While some VCs are twiddling their thumbs thinking about what to fund, they would do well to hire a PR agency to spruce up their image. Something along the lines of a benevolent "uncle" looking out for the best interests of their young charges might be an appropriate image to shoot for :-)

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Please also see SVW: That giant sucking sound...will massive tech companies vacuum up all the cool/hot tech companies?

By Tom Foremski for SiliconValleyWatcher

I love this American saying, "You can't get there from here," I'm told it comes from Maine. It seems to make no sense but when you need to use it--it makes perfect sense.

I find myself thinking of the phrase more and more these days. It's because I see companies and people defending dying business models because they are still profitable. And because the new business models are not yet formed.

That means an organization can't jump to the new business models because it doesn't recognize that there is a big change happening in its industry; or it can see it happening but cannot jump to the new business models because the new cannot support the old cost structures.

For example, that's what I see happening in the PR industry, which sees itself carrying on business as usual and defending its traditional methods of PR, with no threat to its business from new communications methods such as blogging.

While in the media sector, media companies can see the writing on the wall but they cannot jump over to become new media companies. Because the new media business models are too flimsy to support the old cost structures.

In both cases, "You can't get there from here." You have to be a new company you have to be a new rules company.

Is internet a disruptive technology?

"You can't get there from here," also helps to define a "disruptive technology." I define a disruptive technology as something which companies do not see coming, when they see it they pooh pooh it, then they grudgingly accept it, then they can't do anything about it.

A disruptive technology is like seeing the car crash in slow motion, it is seeing the train wreck happening right in front of you--and you can't get out of the way.

PC was disruptive

By Tom Foremski, for Silicon Valley Watcher
The killer skills for this next decade are going to be statistical analysis combined with business studies. I was just recently discussing this with my 18 year old son Matt, who is switching his second year college courses towards those subjects.

That's because in an online world where you have tens of thousands of business transactions and interactions happening in a day, or even in a minute, you need the tools to manage and interpret the behavior of large numbers of events.

Then three days later BusinessWeek comes out with its cover story: Why Math Will Rock Your World. I should remember to wear my tin foil lined hat more often--BusinessWeek is known for monitoring my brain waves :-)

I'm behind in my emails and other communications, my apologies. The problem with standalone journalism is that there aren't any sick days; the blog always needs feeding.

My cold gave me a chance to think about my tag line for Silicon Valley Watcher: "reporting on the business of Silicon Valley;" and I decided that I prefer: "reporting on the business and culture of innovation."

That's because I realized that I write a lot about the culture of Silicon Valley, too; and about how emerging technologies and applications are changing the nature of work, relationships, language, ideas, creativity, and behavior.

I see that the links between new uses of technology and changes in language/ideas/behavior are getting closer --and faster-acting-- than ever before.

And I plan to write more on that subject, because those cultural changes will shape the business side of new companies.

The new generations of startups are more consumer-oriented than ever before, which means they have to have a decent understanding of the somewhat shape-shifting cultures of their markets. If their products/services don't have the right cultural interface, they will fail.

It should be one of the new rules of the new age: Learn the API of the culture you are targeting --preferably before you start your company (you might be surprised at how many startups have very little knowledge about their potential customers.)

Also, living here it sometimes feels as if we are already living in part of the future. We get to be the canary in the coal mine, possibly able to warn others of what's ahead.

I hope my choice of metaphor is a poor one, and is not reflected in the health of my profession (journalism) and its meeting with the future. :-)

By Tom Foremski, Silicon Valley Watcher

What is socially acceptable to blog about? That's one of the questions I have pondered when everyone can be a publisher, and when most in my social circle are publishers/bloggers.

And the answer is simple: if you are at a private event, among your friends, then everything is off-the-record you do not publish anything that could embarrass anybody, or republish anything that was said/done unless you have an agreement to do otherwise.

That has to become one of the new rules of our new society: Everything in a social setting is off the record unless agreed otherwise.

Because if a person wanted to broadcast to the world, then they themselves would publish it to the world. For example, if I say something to three people, I only wanted to say it to those three people, not the world.

The exception is a press/promotional/public event or announcement. Otherwise, in social situations, everything said is off the record unless otherwise agreed.

By Tom Foremski, Silicon Valley Watcher

Your competition is not your competitors, it is someone's grandmother. . . it is the competition for attention and you had better be good at it.

And you had better give back a lot of value in exchange for that attention--remember, you have to beat grandma.

By Tom Foremski, Silicon Valley Watcher

My three rules of today's workforce:

--Carry and use your own cell phone/number for business

The workforce now is mobile and temporary even if you have a salaried job. You need to be in control of the center of communications: you.

--Carry and use your own email address even at work

Otherwise your contacts and the relationships you build can be severed when you leave a job, and that is an investment that you have a right to maintain--as does your employer.

--Carry and use your own health insurance

Because otherwise, you will be stuck in a job that makes you sick just to keep the health insurance.

[I've followed these three rules for years...]

From Mitch Ratcliffe: Ratcliffe Blog

http://www.ratcliffeblog.com/archives/2005/11/new_rules_for_2.html

To Tom's rules, I'd add:

Incorporate and work on contract rather than as an employee.

This allows you to negotiate the same kind of stock compensation while allowing you to keep your business costs, even the ones you can't get compensated for at work, on your own taxes while increasing the flexibility you have as a working person.

Carry and use your own hardware, building tech expenses into your compensation.

This prevents lock-in to a job through access to technology. Sure, you may have to work with a less impressive laptop, but you're also forced to think more like the people who really buy computers, software, services and so forth.

Update #2 thanks to Neville Hobson at NevOn, via David Newberger-The Geek Guy Rants

Create a blog and establish your personal presence in the new marketplace

In this new age of global inter-connectivity, linking and influence, a blog is a prerequisite if you want to build your own credibility, be found easily and connect with others. Forget the static website. Forget the fancy brochure. Do a blog. It works - I speak from personal experience.

Join a business network like LinkedIn or OpenBC
However you actively use these or not, they can help establish your individual credibility and provide avenues of contact with others for mutual benefit.

Anybody have any more?