Posts Tagged ‘business’

The Value of a Board at the Seed Stage

September 27, 2013  |  All Things Digital  |  No Comments

Image copyright For most startup founders, the idea of creating a board of directors early in the company’s life is as welcome as spending a week at Burning Man without water or sunscreen. Thinking about boards makes entrepreneurs imagine instituting process-laden corporate governance, spending hours drafting lengthy board presentations and potentially losing control of their startups — how un-Zuck! In reality, every startup is legally required to have a board (assuming it’s a C-Corp or S-Corp). But there is ongoing debate about whether that board should include anyone other than the founder(s). An outside Director, specifically one representing investors, is tremendously valuable for seed stage companies. Here’s why: Establishing a Cadence Much like sprints in agile software development , setting up a regularly occurring board meeting at the seed stage establishes a cadence for the work of building the company. A scheduled board meeting can also help address another common problem experienced by startups — figuring out how and when to properly leverage your investors and advisers. Board meetings become checkpoints for founders to ask for assistance from an investor and to seek feedback on developments at the company. It doesn’t matter whether the board meetings happen monthly, every six weeks or quarterly. What’s important is that a cadence gets set and that the meetings are used in ways that are productive for the team. Stepping Back and Getting Perspective When your hair’s on fire each and every day as an entrepreneur, it’s easy to spend all of your time firefighting

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Why Larry Ellison and Michael Dell Are Now the Best of Friends

September 25, 2013  |  All Things Digital  |  No Comments

Keep a close eye on the brewing relationship between the software giant Oracle and computing concern Dell. While today the companies announced a series of seemingly innocuous plans to more tightly integrate their enterprise management capabilities, what’s really going on is a deepening of an important strategic partnership between them. That’s the conclusion drawn in a research paper from Moor Insights and Strategy, a research firm headed up by Patrick Moorhead, a former executive with chipmaker Advanced Micro Devices. Four years after Oracle closed on its acquisition of Sun Microsystems, the company has sought to compete in the business of specialized hardware based on the old SPARC chip architecture that goes up against IBM Power-based systems. But Sun also had a fledging commodity server business using Intel’s x86 chips. CEO Larry Ellison has said numerous times he wasn’t interested in boosting Oracle’s share of the x86 service business, in part because he doesn’t see it as terribly profitable. In a world where x86 servers are the basis for most of the world’s data centers, Oracle’s SPARC-based hardware gets all the attention, while its x86 business has languished. “First, since their Sun acquisition they have focused their hardware sales resources on promoting their SPARC-based systems and, as is becoming apparent, they have also focused their hardware R&D resources on SPARC technology and system development,” writes Paul Teich, a Moor Insights analyst and the paper’s primary author. Without a credible x86 business, Dell is quickly becoming the conduit through which Oracle reaches that market. Dell has already been named Oracle’s “preferred x86 vendor,” while Dell has been reselling Oracle’s Linux and other software and services to its hardware client base. Dell and Oracle each have access to customers and technology that the other needs. “We believe that Dell needs a better software and services play to increase their enterprise IT share of wallet and credibly challenge Hewlett-Packard at classic enterprise IT accounts,” Teich argues.

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Ahead of July Filing, Twitter IPO Designed as "Less Anti-Facebook Than Anti-Old-Twitter"

September 24, 2013  |  All Things Digital  |  No Comments

Did you know Twitter actually filed its IPO documents in mid-July? Or that an investment firm run by Suhail Rizvi will be one of the bigger shareholders listed when its regulatory documents go public? Or that the float for the IPO will be much smaller than Wall Street expects, because few current investors are selling into it? No, you don’t, which was the goal of the once out-of-control company so well known for its myriad of foibles that one major rival had described as a “clownmobile that crashed into a goldmine.” No longer, it seems — except, it is hoped by Twitter, for the goldmine part. To get there, in interviews with more than two dozen sources familiar with the Twitter IPO process, the famous online communications company has opted for one what person dubbed a “containment strategy.” That meant a filing in mid-July with the Securities and Exchange Commission using the Jumpstart Our Business Startups, or JOBS, Act, that allowed Twitter to keep it under wraps. There was no public announcement until this month, an effort to file in such a way as to minimize disruption to the company and maximize control by its managers and board. The ultimate goal, said those with knowledge of the situation, was to finally banish the image of the loosey-goosey Twitter of old, with its leaky board, its constant service crashes and its dramatic proclivity to show off all its growing pains in public. “Like the service, the aim was to make the Twitter IPO as simple as possible,” said one person familiar with the situation. “While everyone wants to compare it to trying to avoid the circus around the Facebook IPO, it’s really less anti-Facebook than anti-old Twitter.” Said another person close to the company: “We had been everyone’s doormat for far too long, but a transformation did happen and this IPO process reflects that perfectly.” Among the many ways that was done include the severe limiting of information around the process to the board and several others, in an effort orchestrated by key managers. This tight circle includes: CEO Dick Costolo, COO Ali Rowghani and CFO Mike Gupta, with some critical help from Twitter’s most IPO-experienced director, Peter Currie. Along with the rest of the board, which meets every other month for two days, the group plotted the IPO over a much longer time period, a process that included taking the pressure of possible selling by early investors and employees.

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Seven Questions About Security for Kleiner Perkins’ Ted Schlein

September 22, 2013  |  All Things Digital  |  No Comments

It doesn’t take much more than a casual glance at the headlines to get the idea that there’s a lot going on in the area of Internet security these days. Between hacking attacks by the Chinese Army , revelations of overly aggressive snooping by the National Security Agency, or questions about how to make cloud computing secure enough that big companies can trust it, security is top of mind for CIOs and other decision makers more than ever before. It’s against that backdrop that venture capitalists like Ted Schlein see opportunity. As a general partner at Kleiner Perkins Caufield & Byers. He has led several of the firm’s investments in security companies, and was the founding CEO of Fortify Software, the company that’s now part of Hewlett-Packard. I caught up with him while he was in New York for a meeting of the board of Chegg, the digital hub for students that recently filed for an IPO . My first question was the one I always tend to ask at the outset of conversations about security. AllThingsD: Ted, there’s a lot of interest in security companies lately, but I’m always a little skeptical because over the years, there have been so many companies focused on security that make such broad promises about being the last, best solution. As an investor, how do you see that? Schlein: Threat vectors change. The natures of threats change, and the bad guys themselves change. And when those things change, the protection mechanisms have to change along with them. What we’ve seen in a rise in the sophistication of the bad guys. What is at stake has gone up tremendously. When we started 30 years ago, we were dealing with amateur hackers who wanted to mess around with you

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Outbrain Isn’t Going Public Yet. But a CFO Hire Gives You a Hint About Where They’re Headed

September 10, 2013  |  All Things Digital  |  No Comments

Is Outbrain, the content recommendation service, getting ready to go public? The Israeli tech press says that’s the plan , and offers varying valuations the New York-based company is supposedly seeking. And Outbrain, which has raised $64 million so far ,  could go public, one day, says CEO Yaron Galai. But not anytime soon. For starters: Up until last week, the company hadn’t had a chief financial officer — a key role for a public company. Equally important: The company hasn’t filed any public offering paperwork with the SEC, Galai says. (Until recently, people outside the company could vet this themselves, by checking with the SEC. Now the JOBS Act allows private companies to keep their initial SEC IPO paperwork secret.) Given that the IPO filing process takes months of back-and-forth between regulators and private company accountants, this means you certainly shouldn’t expect an Outbrain offering in 2013. Outbrain is the largest and best-known of a new breed of company that makes money funneling traffic from one publisher’s site to another. It gets paid whenever someone clicks on its sponsored listings (those are the ones labeled “From the Web” at the end of this story), and gives the originating publisher 60 percent of the revenue. Publishers (like AllThingsD) also benefit because Outbrain provides recommendations for other stories that will keep readers on the original site. So when could we see an Outbrain IPO? Here’s what Galai told me yesterday via email: Otherwise – we keep looking to lock the biggest and most vibrant marketplace for content recommendations. There are strong network effects in this business, and both users and publishers gain most by having one vibrant marketplace. We’ll keep exploring all funding routes, including the public route, that will help us maintain our leadership. And about that CFO hire: The slot has been filled by Jeff Davison, who had most recently been CFO at RightNow Technologies, a publicly traded cloud software company Oracle bought in 2011 for $1.8 billion . Outbrain’s press release announcing the hire certainly gives you the impression Galai thinks this could be a step toward a public filing: Outbrain Appoints Jeff Davison as Chief Financial Officer Key Hire Brings 25 Years of Financial Experience Overseeing Millions in Revenue at Both Public and Private Companies New York, NY, September 10, 2013 – Outbrain, the leading content discovery platform, today announced that Jeff Davison has joined the company as Chief Financial Officer

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Jeff Bezos Reveals He Doesn’t Have a Plan to Save the Washington Post

September 3, 2013  |  All Things Digital  |  No Comments

Asa Mathat / Just because Jeff Bezos is going to own the press doesn’t mean he’s changed his approach to the press. When he speaks to journalists, he says nothing. The Washington Post has the first interview with the new owner-t0-be of the Washington Post today. If you’re expecting Bezos to reveal anything about his plans for the paper, then you’ve never sat through an Amazon earnings call, or listened to a Jeff Bezos interview. The gist: Like he said before, he won’t be running the paper day-to-day. And, like he does with Amazon, Bezos plans to manage the paper for the long haul. But when Bezos won’t tell you how many Kindles he’s sold, he’s not saying anything because he doesn’t want to clue you into his plan. The key question for Post, and its readers (and employees): Does he have a plan this time? If you take him at face value, he doesn’t. He’s going to take time — “years” — to experiment, and the only thing he knows is that it’s important for readers to get value out of reading the paper. It would be easy enough to dismiss that non-talk as cover for whatever Bezos really is planning for the paper.

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Steve Ballmer on Why Buying Microsoft’s Biggest Phone Partner Makes Sense

September 3, 2013  |  All Things Digital  |  No Comments

Given that Nokia was already putting all its smartphone eggs in the Windows basket, it’s a logical question to ask how Microsoft believes it will gain an advantage by purchasing Nokia’s phone business . Naturally, CEO Steve Ballmer thinks the business will be stronger. In an interview with AllThingsD , Ballmer laid out three reasons why things will be different once Microsoft owns Nokia’s phone business. First, Ballmer said, that as close as the two companies were, there were legal and logistical barriers to total cooperation. Each company had to temper its investment based on separate business needs. “As long as we were on a model with two different companies… there was always some kind of a boundary along which it was hard to innovate from a hardware/software perspective,” Ballmer said. “It doesn’t mean we didn’t do it but we know we can improve our agility.” Second, Ballmer noted that each company was separately trying to build its own brand–a duplicative effort that diffused impact and wasted money. “Just think about the Nokia Lumia Windows Phone 1020 and you will that know we can make simpler clearer messages to the market.” Ballmer said, noting that Nokia accounts for 80 percent of all Windows Phones (though Microsoft still hopes others will continue to make it even after Microsoft takes over from Nokia.) Finally, Ballmer said that as two companies, Nokia and Microsoft had to make different choices about where and how much to invest. “We know, as we scale, we need to invest behind this business,” Ballmer said. “It simplifies the business decision making and thinking having the economics be more unified.” Translating from business speak, buying Nokia’s phone business gives Microsoft a greater business opportunity if it can succeed. Microsoft notes in its case for why the deal makes sense that it currently gets less than $10 in revenue from each Nokia Windows Phone sold , as compared to the $40 or so in profit margins Nokia stands to make. Of course, Nokia–and soon Microsoft–also has to build the phones, manage inventory, deal with carriers, etc. Plus, there’s still that pesky challenge of growing beyond single digit market share. “We’re the No. 3 smartphone player,” Ballmer said. “We have a long way to go and we have a lot we want to do.”

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Groupon Suspends Sales Rep While It Investigates Thinly Veiled Yelp Review Threat (Update)

August 18, 2013  |  All Things Digital  |  No Comments

A Groupon spokesperson said on Sunday that the company was investigating whether one of its sales reps made a thinly-veiled threat to a restaurant owner to have his friends post bad reviews on Yelp and social media. In the interim, Groupon has suspended the rep, Andrew Johnston, from interacting with other merchants, Groupon spokesman Paul Taaffe wrote to AllThingsD in an email. “As you can imagine such actions are not acceptable to Groupon,” Taaffe wrote. The investigation stems from a Facebook post by one of the owners of Sauce, a San Francisco restaurant, which included what the owner said was an email exchange between he and Johnston. The alleged email from Johnston, is time-stamped from Friday: Hi Trip! I sincerely appreciate you hanging up on me. As a resident of San Francisco for over 25 years, I have a huge network of friends (ages 25-40) that all are extremely active on Yelp as well as other social media. I will gladly let them know how you treated me as well as my feelings about the people who run Sauce. Go Giants! Andy The email response from the restaurant owner began this way: “You must be new to cold calling, you might want to develop a thicker skin, or work for a less despised company.” In it, the owner went on to say that his establishment wants nothing to do with Groupon “since our last, horrific, experience with your company.” Since Friday, six five-star reviews have appeared on Yelp’s Sauce page, along with two one-star reviews. ( Update 3:05 pm ET : Trip Hosley, the business owner involved in the exchange with the Groupon rep, responded to AllThingsD . In a long email, Hosley says he was abrupt with the Groupon rep, but “didn’t insult or threaten him in any way or raise my voice, I simply took control of my own time back from an unwanted interruption.” Hosley’s main point and concern is that small business owners still often have a tough time fighting against fake online reviews. The issue to me is, how many others has this happened to? And what did (or can) they do? Did they have a way to fight back? Because even with a business account there does not seem to be a fast way for a small business to combat this type of threat and action by a disgruntled sales rep and see immediate action taken by the larger company (in this case either by Groupon or Yelp) in time to stop the damage. In this instance, I do not blame yelp at all, they are just a vehicle. But it does highlight a vulnerability in the Social media system, if you will, where great damage can be inflicted very quickly causing a business owner to feel powerless and trapped. I’ve emailed Yelp for comment. ( Update 5:57 pm ET : Yelp spokesperson Vince Sollitto wrote in an email: “Business owners and consumers can flag reviews for our User Ops team that they believe may violate our terms of service and of course business owners can respond publicly to any review with their message or comment

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The Future of the Desktop — Rendering the Operating System Irrelevant?

August 8, 2013  |  All Things Digital  |  No Comments

Xerox Star There are few more enduring manifestations of user interface technology than that of the Graphical User Interface Desktop. Pioneered by engineers at Xerox PARC, refined by Steve Jobs and Apple and brought to masses and ingrained into our daily lives by Microsoft Windows, it is almost the first thing that comes to mind when we think of using a computer. The natural feel of choosing icons with a gesture, as opposed to memorizing command lines, somewhat demystified computers. This made them accessible to a whole new group of users, and did away with the need for intensive training and education. The desktop is perhaps the single most important development in productivity in the history of computing. Whether you use Windows, OSX, or perhaps one of the several flavors of Linux, the same basic principles apply. Point and click; or more frequently now, touch and tap — what you see is what you get. But despite their similarity in appearance, underneath it all, each of these operating systems is inherently different. Applications that run across all are few and far between, and as soon as one goes beyond the most basic of features, a great deal of learning has to take place before one can get the most out of all the features available to them across the operating system environments. Personal computing has seldom been in a more fragmented state. The rise of the mobile device has seen the operating system landscape become even more disjointed, and the longer lifespan of non-mobile devices means that even with Windows devices there are four separate versions currently supported by Microsoft. No one could possibly be expected to know all of the shortcuts and features of every iteration of every different operating system that they may encounter in their professional and personal lives. This lack of consistency and familiarity could impede the productivity that the desktop is trying to promote. One thing that is consistent across most modern operating systems is the ability to run a sophisticated Internet browser. HTML5 is fast becoming the standard for delivering Web applications and the possibilities it gives for Web development are endless. Web applications are something that most of us are familiar with, and perhaps their greatest asset is being able to deliver a consistent user experience regardless of what device or operating system you happen to be using it on. With more and more of our essential applications, files and data being hosted online, a Web-based desktop is the next logical progression from this. A SaaS-delivered GUI with quick access to HTML5 applications and data that can be accessed from any browser for the first time removes the desktop from the OS for the average user. Regardless of what device the user logs onto the Web desktop with, it will be instantly familiar to them. Different screen sizes and touch controls as opposed to using a mouse may make slight differences, but the same features and functions will be available to all users

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How to Spend $25 Billion the Jeff Bezos Way: Newspapers, Rockets and 3-D Printers

August 5, 2013  |  All Things Digital  |  No Comments

While media and tech circles are still digesting news of Jeff Bezos’s $250 million purchase of the Washington Post , the Amazon founder and CEO has been spreading his gilded wings outside of Amazon for several years. With a reported net worth of $25.2 billion , Bezos has some pocket change at his disposal. And he has used some of it to fund Bezos Expeditions , his private investment firm. It’s the investment vehicle through which Bezos has funded the recovery of engines from Apollo 11 . But it has also been how he has placed bets on promising startups in a variety of industries. The firm’s investments have included bets on big-name disruptors, such as Twitter, Uber, Airbnb and Makerbot, as well as a cash infusion in digital media company Business Insider . Among Bezos Expeditions’ less sexy investments:, an online exchange for manufacturers and suppliers; Domo, a business intelligence software startup from Omniture co-founder Josh James; and Qliance, a medical clinic startup. If Bezos ends up breathing new life — and growth — into the Washington Post, it may be the most impressive of them all.

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