Kellblog covers topics related to starting, managing, leading, and scaling enterprise software startups. My favorite topics include strategy, marketing, sales, SaaS metrics, and management. I also provide commentary on Silicon Valley, venture capital, and the business of software.
Under a volatile leader, we can expect sharp reactions and knee-jerk decisions that rattle markets, drive a high rate of staff turnover in the Executive branch, and fuel an ongoing war with the media. HIT.
With the new administration’s promises of $1T in infrastructure spending, you can expect interest rates to raise and inflation to accelerate. MISS, turns out this program was never classical government investment in infrastructure, but a massive privatization plan that never happened.
Huge emphasis on security and privacy. PARTIAL HIT, security remained a hot topic and despite numerous major breaches it’s still not really hit center stage.
In 2017, we will see more bots for both good uses (e.g., customer service) and bad (e.g., trolling social media). HIT.
5. AI will continue to generate lots of controversy about job displacement. While some remain optimistic, the consensus viewpoint seems to be that AI will suppress employment, most likely widening the wealth inequality gap. A collapsing educational system combined with AI-driven pressure on low-skilled work seems a recipe for trouble.
6. The bitcoin bubble bursts. As a reminder, at one point during the peak of tulip mania, the Dutch East India Company was worth more, on an inflated-adjusted basis, than twenty of today’s technology giants combined.
10. 2018 will be a good year for cloud EPM vendors. The dynamic macro environment, the opportunities posed by cash repatriation, and the strong fundamentals in the economy will increase demand for EPM software that helps companies explore how to best exploit the right set of opportunities facing them. Oracle will fail in pushing PBCS into the NetSuite base, creating a nice third-party opportunity. SAP, Microsoft, and IBM will continue to put resources into other strategic investment areas (e.g., IBM and Watson, SAP and Hana) leaving fallow the EPM market adjacent to ERP. And the greenfield opportunity to replace Excel for financial planning, budgeting, and even consolidations will continue drive strong growth.
Let me wish everyone, particularly the customers, partners, and employees of Host Analytics, a Happy New Year in 2018.
# # #
Disclaimer: these predictions are offered in the spirit of fun. See my FAQ for more on this and other usage terms.
Back in the day we working on a press release and I was a CMO.
Me: “Somebody, get Randy (the PR director) in here.”
Me: “Randy, what is this press release calling our new offering the ultimate in business intelligence?”
Randy: “Yes and the problem is?”
Me: “The problem is it’s not the ultimate, it’s better than ultimate, it’s beyond ultimate … there must be a word for that … I don’t know, maybe penultimate.”
Randy: “Chief,” he said sheepishly after waiting a minute, “penultimate means one less than ultimate. Ultimate means ultimate. There is no word for one more than ultimate.”
Me: “Oh. Well, God damn it, go make one up.”
It was at that moment that I realized I’d been fully sucked into the Silicon Valley hype machine. Just as unique means unique and requires no modifier like “amazingly,” so does ultimate means ultimate.
Speaking of “amazing,” during my tenure at Salesforce, I used to count the number of amazing’s Marc Benioff would say during a speech. You’d run out of fingers in minutes. But somehow it worked. He was a great — no, amazing — speaker and I never got tired of listening to him.
This is Silicon Valley. The land where one of my competitors can still peddle a cock-and-bull story about how he, as an immigrant limo driver with $26 (and a master’s in computer science), sold a company (where he was neither founder nor CEO), worked as (a member in the office of the) CTO at SAP, and is growing stunningly — no, amazingly — fast (despite a rumored recent down-round and rough layoffs). Fact-checking, smact-checking. If it’s a Man Bites Dog story, people will eat it up. Blog it, hit publish, and move onto the next one.
Maybe I should pitch the equivalent story about me:
Lifeguard and Self-Taught Programmer Who Arrived in California with Only $30, a Red Bandana, and a Box of Bootlegged Grateful Dead Tapes Becomes CEO of Host Analytics
“Dude, I was guarding by the pool one day and this wicked thunderstorm hit and, flash, like totally suddenly I realized the world needed cloud-based, enterprise planning, budgeting, modeling, consolidation, and analytics.”
And we could discuss how I “hacked” on paper tape back in high school: “the greatest part about hacking on paper tape was you could roll bones with it when you were done and literally, like, smoke your program.”
It would be a roughly equivalent story. I’m sure they’d eat it up.
Silicon Valley is a place, after all, where we can create a metaphor for something that doesn’t exist — a unicorn — and then discover 133 of them.
Is our reaction “bad metaphor?” No, of course not. It’s “wow, we’re special, we’ve got 133 things that don’t exist.”
Unicorns (generally defined as startups with a $1B+ valuation) are mostly of a result of three things:
The cost and hassle of being a public company, post Sox. Why go public if you don’t have to?
The ability to raise formerly IPO-sized rounds (e.g., $100M) in the private markets.
A general bubble in late-stage financing where valuations are high enough to create the IPO-as-down-round phenomena
So, hopefully, as the financing fuel that’s stoking the fire starts to die down, the hype bubble will go with it. Until then, enjoy this tweet, which captures the spirit of Silicon Valley today just perfectly:
“All media exist to invest our lives with artificial perceptions and arbitrary values.” — Marshall McLuhan, philosopher of communications theory and coiner of the phrase “the medium is the message.”
“Modern business must have its finger continuously on the public pulse. It must understand the changes in the public mind and be prepared to interpret itself fairly and eloquently to changing opinion.” — Edward Bernays, widely known as the Father of Public Relations and author of Propoganda .
“No one ever went broke underestimating the taste of the American public.” — H.L. Mencken
“Don’t hate the media, become the media.” — Jello Biafra, spoken word artist, producer, and formerly lead singer of the Dead Kennedys.
I’m doing this mostly because I’m tired of seeing stories like this one, where it’s my perception that a publication takes a story wholesale, spin and all, from a skilled PR firm and sends it down the line, unchallenged, to us readers. I’m going to challenge the story, piece by piece, and try not to throw too many competitive jabs in the process.
Let’s start by analyzing the headline.
While this may be true, it strikes me as exactly the kind of specifics that PR people know journalists love and a number that actually sounds better than say $30 or $25. Perhaps CG (see footnote ) actually had $26 exactly in his pocket on arrival, but did he really have no other resources whatsoever on which to to rely? Let us beware that it is not only the specificity of the $26 that makes the claim interesting, but also — and more importantly — the implication that he had nothing or no one else on which to rely. Arriving with $26, not knowing the language, and having no friends/relatives is certainly much tougher than showing up with $26, a brother in Brooklyn, and $2,000 in the bank. Which was the case? I don’t know. Given the overall quality of the story, and the author’s general susceptibility to spin (which we will show), I’d certainly wonder.
“Sold a startup for Half a Billion.”
To me, this clearly implies that CG was either:
Founder/CEO of a startup that sold for half a billion dollars, or
CEO of a startup that sold for half a billion dollars (while he was CEO)
He was neither.
CG was not a founder of OutlookSoft, nor was he ever CEO. He was CTO. CTO’s don’t sell startups; CEO’s do. Phil Wilmington was OutlookSoft’s CEO.
CG had founded a company called Tian Software which, per CG’s own LinkedIn profile, was acquired (not “merged” as the story later says) by OutlookSoft in 2005.
Now let’s challenge the half-a-billion.
My sources say SAP acquired OutlookSoft for $350M plus a $50M earn-out, making the deal worth $400M — not $500M. This is sort of confirmed in another Tidemark PR marvel, here, which says “short of $500M,” a very nicely PR-packaged way of saying $400M. A few phone calls to SAP alums and deal-makers in the valley might well have confirmed the lower price.
Net/net: we have blown the headline to bits. The $26 claim is suspect (if quite possibly true) while the very impressive “sold a startup for half a billion” is simply false. It wasn’t half a billion. It wasn’t his startup. He didn’t sell it. QED.
I know that neither CG nor Tidemark wrote this headline. Someone at Business Insider did — and quite possibly not the journalist who wrote the article.
So perhaps we’re just caught up in headline sensationalism. The Horatio Alger message still sells well in America and the SEO people at Business Insider know it — the URL for the story is: www.businessinsider.com/christian-gheoghre-rags-to-riches-story.
Before digging into the story itself, we should observe that this is basically the same story as this one that ran on CNET over a year ago: Escaping the Iron Curtain for Silicon Valley. This raises a question that is difficult for me to answer. It’s a cool story, no doubt, but the tech blogs are news blogs and old stories aren’t news. So why even write the same story that CNET did 15 months earlier? Is it possible they didn’t even fact check enough to know?
Let’s dig into some of the lines from the story.
“Today’s he working on his fourth successful startup, having sold all of his previous ones, including his third one, OutlookSoft, to SAP for $500M.”
I count two: Tian Software and Tidemark.
The story itself contradicts the idea that Saxe Marketing “was CG’s” in saying, “[Andrew] Saxe hired CG” — i.e., if CG was “hired” he was not a founder and ergo the company was not “his.” The name of company itself — Saxe Marketing, as opposed to Saxe & CG Marketing — additionally reinforces that.
As discussed above, you can’t call OutlookSoft “his,” nor can you say he sold it.
If we said, “CG spent 10 years toiling on two startups, one that got sold to Experian for $32M and one that was acquired by a private company at an undisclosed valuation” — would it have the same impact? Methinks not.
“Taught himself English by listening to Pink Floyd.”
I have no doubt that CG listened to Pink Floyd in his home country and that he learned (probably quite strange) words from so doing. From my experience with second-language songs, it’s actually quite difficult to learn words and much easier to learn pronunciation. Many of my French friends can sing English songs, but only in a phonetic way.
So, to me, this rings partially true but it also rings as something a PR person would grab onto faster than swimming across the border. “Wait, you learned English listening to Pink Floyd. Oh! We’ve got to use that.”
So, to have some fun with this one, let me imagine the conversation he had with the immigration officer on arriving at JFK:
CG: “We’re just two lost souls swimming in a fish bowl, year after year.”
INS: “So you’re coming to to get married, then?”
CG: “You raise the blade, you make the change, you re-arrange me ’till I’m sane.”
INS: “Ah, a medical visa, excellent.”
This spin-taking was harmless.
“He taught himself to code by hacking into video games on [a Commodore 64] machine.”
Frankly, I’m not sure you could “hack into” video games on a Commodore 64, but I guess that sounds better than saying “wrote BASIC programs on a Commodore 64” like the rest of us. If I had to guess, you probably got the source code since BASIC wasn’t a compiled language so there was no “hacking” to get in. You were in if you wanted to be.
The CNET story somewhat contradicts this account saying CG “played games on the C64” but he later bought a “Sinclair ZX and taught himself some programming.”
Details, yes, somehow programming a C64 or ZX isn’t good enough for the narrative: he had to “hack into” them. All part of the journalist embellishing the (probably already embellished) details in order to make CG larger than life and get a lot of hits on the story.
“[He got] a masters [sic] degree in Romania in mechanical engineering with a minor in computer science. But the degree wasn’t recognized and accepted once he got here.”
If there were ever a field in which people care about what you can do as opposed to your degree, it’s programming.
Recognized (by whom?) or not, CG was not a limo driver who knew nothing about programming and miraculously started a software company. He had a master’s degree in engineering and computer science.
“Immigrant with master’s in computer science founds software company” would probably describe about half of all Silicon Valley companies.
Business Insider insists on the Man Bites Dog approach of “Limo Driver Founds Software Company” to the point of explaining away the master’s degree because it interferes with the narrative.
“He launched a second startup, TIAN, and merged it with a company called OutlookSoft.”
Tian was not “merged” with OutlookSoft; it was acquired by them, per CG’s own LinkedIn. Why the spin?
“OutlookSoft did a form of big data known as business analytics.”
There was nothing whatsoever “big data” about OutlookSoft, which was a business performance management company that did planning, budgeting, consolidation, and analytics. Gratuitous buzzword inclusion, and nothing more. Presumably inserted by the PR firm and swallowed whole by the journalist.
“Tidemark also does business analytics/big data, but it’s designed for the modern age: it works on a tablet and runs in the cloud.”
The Holy Grail of PR these days is social, mobile, cloud. This sentence scores a 2 out of 3. For what it’s worth, I actually think this is part of their strategy, so in this case it’s not buzz-wordy journalism, it’s the clear communication of a buzz-wordy strategy.
“More importantly, it is designed to be what CG calls a ‘revolution at the edge’ with a ‘Siri-like interface.'”
Revolution at the edge is both buzz-wordy and meaningless. Siri is definitionally not revolutionary because it was launched 4 years ago in 2010 and based upon natural language and speech recognition technology that was more than a decade old. What was revolutionary about Siri was its inclusion in a mass-market, consumer product.
I’d say a Siri-like interface for BI has been discussed since the Natural Language Inc (NLI) was acquired by Microsoft in the late 1980s. If nobody’s noticed, it hasn’t worked. Turns out the specificity of human language is not precise enough to directly map to a database query — even with a semantic layer. But, hey, let’s go pitch the idea because it sounds cool, the journalist probably has no idea of the history and doesn’t realize that no CFO wants to say “Hey Tiri, I want to hire 3 people next quarter and increase average salaries 3.5%.”
“It’s like Google mixed with Wolfram|Alpha.”
That’s like saying it’s nuclear fusion mixed with a perpetual motion machine.
While it may indeed do voice recognition like Siri, I can assure you it is not like Wolfram|Alpha (press the link to see just one example). This seems an easily challenged assertion, but it gets repeated as a sexy soundbite. Great packaging of the message to just flow through the media channel.
The first rule of PR is to have good metaphors and that certainly a good one. The first rule of journalism, however, should be to challenge what’s said. How is it like Wolfram|Alpha exactly (and there’s a lot, lot more to Wolfram|Alpha than a question-style interface).
“In the first 18 months since his product became available, his company is on track to hit $45 million in revenue, CG told us, growing 300% year over year. It has about 45 customers so far, with, on average, 180 business people at each customer using the product.”
We’re going to need to analyze this last set of claims one at a time.
“In the first 18 months.” Tidemark was founded in 2009, so it’s about 5 years old. While PR is cleverly trying to reframe the age issue around product availability, you’d think a journalist would want to know what happened during the other 3.5 years. As it turns out, a lot. The company was originally founded as Proferi, with an integrated GRC and EPM vision. When that failed, the company “pivoted” (a euphemism for re-started with a new strategy) to a new vision which I’ve frankly never quite understood because of the buzzword-Cuisinart messaging strategy they employ.
“On track to hit $45M in revenue.” Frankly, I have a lot of trouble believing this, but it’s happily stated without a timeframe and thus impossible to analyze. Normally, when you say $45M, it implies “this fiscal year.” But it could be anything. Is it simply “on track” for doing $45M in, say, 2016? Or, maybe it’s a really misleading answer like $45M in cumulative revenue since inception? To paraphrase an old friend, saying $45M without a timeframe is like offering a salary of 100,000 but not mentioning the currency.
“Growing 300% year over year.” Most journalists and some PR people confuse tripling with growing 300% which is actually quadrupling. But let’s assume both that the math is right and we are talking annual revenues: this means they did $11.25 in 2013 and are on track to do $45M in 2014. To do this in revenues means an even bigger number in bookings (due to amortization of SaaS revenues). I banged out a quick model to show my point.
“Growing 300% a year.” The far easier way to grow 300% year, of course, is to do so off a small base. If you do some basic math on private company numbers and it doesn’t make sense, you probably shouldn’t repeat them. Net/net: a journalist who hears 200% or 300% growth claims should first make sure the math is right, and second default-conclude it’s off a small base until proven otherwise.
“It has 45 customers so far with 180 [users at each customer].” Some quick math says $45M/45 = $1M/customer, which is Workday-class large and ergo highly suspect. Slightly better math (using my quarterly model) suggests $800K/customer in ARR, which is still huge — by my estimates $100-$200K ARR is a nice deal in EPM. Combining this with 180 users/customer implies an average price of $4.5K/user/year — 150% of the list price of the most expensive edition of Salesforce.com. ERP-sized deals, deals 4-10x the industry average, deals done at 150% of Salesforce’s list. It doesn’t add up.
I should also note that LinkedIn says Tidemark has 51-200 employees which is generally not consistent with the numbers in my model. Moreover, I can find searching for words like “account” [executive] or “sales” [executive], only fewer than 10 people who appear to be in sales at Tidemark.
Overall, I conclude that the $45M is more like 2014 bookings or maybe cumulative bookings since inception than any annual revenue figure. The numbers just don’t hang together. If I had to pick a figure, I’d guess they are closer to $10M in revenues in 2014 than $45M.
But what is a journalist supposed to do in this situation? I’d argue: fact check. Call VCs and get company size estimates. Use Google to find similar/alternative stories. See Crunchbase for history. Do some basic triangulation off LinkedIn both in terms of numbers of sales reps and size of company. Ask industry execs for industry averages. And if the numbers don’t hang together, don’t publish them.
To wrap this up, yes, I dislike this kind of puff-piece, softball story. Not because it’s friendly — not all news has to be challenging and analytical and the raw material of CG’s story is indeed impressive — but because it seems to take the PR-enhanced version of it, and swallow it hook, line, and sinker.
The media should do better. The trade press was crushed by the tech blogs for lack of sufficient value add. The tech blogs are quickly falling into the same trap.
Disclaimer / Footnotes
 I’m told Autonomy’s Mike Lynch was a big fan of this book.
 Host Analytics theoretically competes with Tidemark. Since we rarely see them in deals, I feel comfortable editorializing about their PR as I might not with a more direct competitor. Nevertheless, I can certainly be said to have a horse in this race.
 I refer to Christian Gheorghe as CG both because his name is notoriously hard to spell, but more importantly because this post is not supposed to be an attack on him — to my knowledge he is a delightful and inspiring person — but rather instead a call-out of the publication that wrote this story and the system of which it is a part.
Silicon Valley is a place built by nerds, arguably for nerds, but once big money gets involved there is always tension between the business people and the technical people about control. Think, for example, of the famous Jobs/Sculley falling-out back in 1985 where the business guy beat the technical guy.
However, in part because of events like that, the business people don’t always win. In my estimation, there is a sort of “founder pendulum,” which swings with about a ten-year period between one end (where technical founders are “out”) and the other (where they are “in’).
Through most of the 2000s, founders were “out.” There are two ways to tell this: (1) you hear incessant griping about “founder issues” at Buck’s and at the Rosewood and (2) you see young PhD’s paired fairly early in the company’s evolution with business-person CEOs, often as a condition of funding.
Somewhere towards the end of the last decade, founders were “in” again. This makes me happy because I think engineers and scientists are the soul of Silicon Valley. That’s why I had so much fun on the board of Aster Data. And it’s why I like companies like Rocket Fuel.
Rocket Fuel was co-founded by Stanford computer science PhD George John and twofellow Yahoo colleagues in 2008. John remains its CEO today. I met him during my year-off in 2011 and was impressed, so I’ve kept an eye on the company ever since.
During the interim, the thing I most noticed about Rocket Fuel was its corporate personality. Like Splunk, they do a great job of having a strong corporate voice. Let’s look at some of the culture and communications that are part of this voice.
“The rocket scientists behind Rocket Fuel.” (Turns out John actually worked for a while at NASA.)
“In 2008, a group of data savants came together.”
“Rocket Fuel is bringing hardcore science to the art of marketing.”
“Rocket Fuel has great machine-learning scientists”
Jobs titles like “Rocket Scientist” and “Chief Love Officer.”
I know that many Silicon Valley companies have odd job titles, geeky events, nerdy billboards, and a focus on recruiting great engineers. Somehow, however, to me, Rocket Fuel comes off as both more mature and more authentic in this race. These aren’t geeks trying to look cool, playing sand volleyball, and partying till dawn; these are geeks being geeks, and quite happily so.
I noticed when the company filed for an IPO back in August, but didn’t have time to dig into the (amended) S-1 until now.
Here are some takeaways:
Revenue of $44.6M and $106.6M in 2011 and 2012, 139% growth
Revenue of $39.6M and $92.6M in 1H12 and 1H13, 133% growth
Gross profit of $42.9M in 1H13, up from $17.6M in 1H12, with gross margin of 46%
R&D expense of $6.1M in 1H13, up from $1.5M in 1H12 and representing 7% of sales
S&M expense of $34.6M in 1H13, up from $15.5M in 1H12 and representing 37% of sales
G&A expense of $10.9M in 1H13, up from $2.6M in 1H12, and representing 11% of sales.
Operating loss of $8.8M in 1H13, up from $2.1M in 1H12, and representing 9.5% of sales
EPS of ($1.43) in 1H13, up from ($0.31) in 1H12
So the financial picture looks pretty clear: really impressive growth, no profits. Let’s take a quick look at how things are scaling.
Revenue growth is decelerating slightly as the more recent half-over-half (HoH) growth rate is slightly lower than the YoY
R&D expense is way up, growing 307% HoH.
S&M expense is up, but is scaling slight slower than revenue (as one generally likes) at 123%
G&A expense is way up, growing 319% HoH. Let’s assume a lot of that is IPO-related.
Total operating expenses are growing at 163% versus revenue at 134%. Usually, you like it the other way around.
The risk factors, which run nearly 20 pages, look reasonably standard and include risks from being able to file as an “emerging growth company,” implying more onerous disclosure, and the potential inability to comply, later.
The most interesting risks related to user rejection of 3rd party cookies, European Union laws, and potential “do not track” standards. They cite customer concentration as a risk, but their top 20 customers in 2011 and 2012 accounted for (only) 39% and 38% of revenues. They also cite access to inventory, which makes sense a threat to anyone in this business, particularly in the case of social media and Facebook FBX.
As of 6/30/13, the company had about 405 employees.
Prior to the IPO, the company has raised about $75M in capital.
The company will have 32.5M shares outstanding after the IPO.
The increase in the fair market value (FMV) of the stock, as shown in the option grant history table, is impressive. That’s an 8.9x over the 18 months shown.
After the IPO, the three cofounders will own 10.7%, 9.0%, and 3.9% of the company, Mohr Davidow will own 35.1%, and Nokia will own 8.3% (assuming no exercise of over-allotment).
As per my S-1 tradition, I never get all the way through. I stopped on page 125 of about what appears to be 185 or so pages. If you want to dig through the rest of it, you can find the S-1 here.
In conclusion, I will say that I’m an enterprise software guy and don’t know a whole lot about the digital advertising business. I believe that Rocket Fuel is both a middleman and an arbitrage play, that middlemen can sometimes get squeezed, and that the name of the game in arbitrage is consistently outsmarting the other guys. So, in reality, I believe there’s more to the geek culture than simple fun: it’s critical to winning in the strategy.
How this will end? I don’t know. Do I think George John can build one heck of a team? You betcha. Do the big guys against whom they compete have people as smart as Rocket Fuel’s? Probably. Are the big guys’ best-and-brightest working on this particular problem? I don’t know.
(Often, in my experience, that is the difference. It’s not whether company X has people as smart as startup Y; it’s where they’ve chosen to deploy them. Even Facebook and Google have a bottom 20%.)
The slide was a list of six things that publishers should be able to do with their content. For this blog post, I’d say the scope includes publishers of any ilk, professional publishers whose content is their business and “accidental” publishers — i.e., enterprises whose primary business is not content publishing, but where content nevertheless plays a mission-critical role (e.g., doctrine for the Army, in-flight manuals for airlines, or maintenance procedures for medical devices, such as PET scanners).
So, if content either is your business or is mission-critical to it, then here are the six things you should be able to do with it:
Integrate it. Content is more valuable when it’s integrated with other content. Typically this means putting it in one place and then transforming it — over time — to a common structure/schema. Note that many systems require a ‘big bang” approach that requires 100% cleansed content as the first step. This artificial technology constraint dooms many projects to failure because that first step’s a doozy and is typically never completed before the business runs out of budgetary patience. Instead of trying to clean the Augean Stables as step one, adopt a lazy approach to content transformation, cleansing, and enrichment.
Enrich it. Content can be made more valuable by enriching it; using text-mining tools to identify entities such as people and places, phone numbers and credit card numbers, geopolitical organizations, or diseases and symptoms. No matter which entities are important to your content, the odds are you can find a text mining tool that will identify them. But, whatever you do, don’t extract the entities from your content by loading them into relational tables that say “document 17 mentions Paris.” Instead, enrich the content itself through the addition of in-line markup that says <city>Paris </city> directly in the text. In-line markup allows for much more powerful queries than entity extraction. So don’t extract from your content; enrich it, instead.
Slice and dice it. Much as good business intelligence tools let you slice and dice data, so should good content tools let you slice and dice content. Slicing and dicing means pulling content in any way that you want. You want all the section headers to dynamic build a table of contents? Great. You want all the figures and captions, only? Great. You want all the chapters in a corpus sorted by relevancy to a specific phrase? Great. You want the abstracts of articles written by a given author in a certain time period? Great. Slicing and dicing content means querying it along any dimension you want, instantly. When you can slice and dice content, you can repurpose it into new products in virtually unlimited ways.
Deliver it. You should be able to deliver content from one repository to all of your distribution channels: web, print, feeds (e.g., RSS, Atom), BlackBerries, iPhones, the Kindle, other e-readers, 508-compliant readers, other phones, and — heck — even the rumored iTablet. The point of multi-channel publishing is to be fully separate formatting from structure so that you can dynamically render content from a central repository to all of the various forms — some existing and many not yet existing — that your content consumers want. The rapid transformation of XML is key to delivering on this vision.
Analyze it. Today’s readers don’t just want to consume content, they want to surf it and analyze it. They want dynamic wordclouds or tagclouds. They want to do frequency analysis. They may want to analyze co-occurrence — e.g., between side-effects and drugs or symptoms and diseases. They want to count results and to slice and dice those counts using facets. They want to be able to feed visualization tools to create interfaces such as hyperbolic trees. It’s no longer enough to simply locate and deliver content: both your consumers and your internal producers want statistics both to learn more from the content and to determine who’s reading what to assist in future planning.
Contextualize it. The Holy Grail of publishing is to put content in context. For example, rather than teaching a pilot a table of information about descent rates at various altitudes, instead give him one descent rate recommended for the specific airplane he’s flying at a specific altitude. Instead of dumping a tome of slides under various stains on a pathologist, give him an application that walks him through the process of differential diagnosis of a given tumor. Instead of documentation on service personnel, give them a laptop that outlines the exact steps — specific to a given make, model, and unit — for performing maintenance on an expensive medical device. Instead of a generic lesson for a student, intermix content and exercises in a way that’s specific and optimal for their apparent knowledge.
When information providers can do these six things with their content, they are ready to move successfully to the “post web 2.0” online age.
As part of my company’s focus on the media industry, I sit on a few industry groups where I have the opportunity to spend quality time with senior media and publishing industry executives.
Like any CEO, I have a natural tendency to believe that my company is, if not totally counter-cyclical, at least somewhat immune to the effects of the economic downturn. I’ve heard enough CEOs make the claim (cf: this query), often where it’s ostensibly absurd, that I should ask myself if I don’t have a case of CEO denial. Am I arguing something akin to the rise in bedbugs is good for the hotel industry or not?
So when a recent publishing executive group I sit on started to discuss the economic downturn, I turned up my defenses to make sure I didn’t have my happy ears on.
But executive after executive said that they believed the downturn is accelerating the digital publishing transformation. Not because I said it. Not because, as a technology supplier that helps companies transition, I want it to be true. But because about a dozen senior folks from many different publishing sectors said it.
Foot-dragging in some publishing sectors has already gone on almost a decade, slowly whittling away at the traditional models and those who support them.
As the decade has passed, the top brass at publishers continues to change, slowly replacing less tech savvy executives with more tech savvy ones.
Enough time has passed that there are now examples of both new and traditional publishing companies who have successfully transitioned business models. The “it can’t be done” rationalization starts to wear thin.
Hands are being forced. Seeking to cut costs, publishers are forced to make real trade-offs between investing in the future and preserving the past. When forced, most executives will bet on the future.
Now that I see the picture, it’s clear: after roughly a decade of fence-setting, the downturn is forcing publishers of all ilks to move. The downturn is accelerating the transition to digital publishing. And that’s not happy ears.
I’m Dave Kellogg, consultant, independent director, advisor, and blogger focused on enterprise software startups.
I bring a unique perspective to startup challenges having 10 years’ experience at each of the CEO, CMO, and independent director levels across 10+ companies ranging in size from zero to over $1B in revenues.
From 2012 to 2018, I was CEO of cloud enterprise performance management vendor Host Analytics, where we quintupled ARR while halving customer acquisition costs in a competitive market, ultimately selling the company in a private equity transaction.
Previously, I was SVP/GM of Service Cloud at Salesforce and CEO at NoSQL database provider MarkLogic, which we grew from zero to $80M in run-rate revenues during my tenure. Before that, I was CMO at Business Objects for nearly a decade as we grew from $30M to over $1B. I started my career in technical and product marketing positions at Ingres and Versant.
I love disruption, startups, and Silicon Valley and have had the pleasure of working in varied capacities with companies including Cyral, FloQast, GainSight, Kelda, MongoDB, Plannuh, Recorded Future, and Tableau. I currently sit on the boards of Alation (data catalogs), Nuxeo (content management) and Profisee (master data management). I previously sat on the boards of agtech leader Granular (acquired by DuPont for $300M) and big data leader Aster Data (acquired by Teradata for $325M).
I periodically speak to strategy and entrepreneurship classes at the Haas School of Business (UC Berkeley) and Hautes Études Commerciales de Paris (HEC).