Rich Segal wrote this in 2006 and I’ve referenced it many times in articles, blog posts and presentations. The essence of the story is how there is world of opportunity around us.
There are more tools now to build digital products than there ever have been and their accessibility has never been higher and the barriers to entry have never been lower. And with the exception of the hardware to run it on, it’s usually free.
The device in your pocket has more memory, more CPU power and more bandwidth than the first commercial web server I deployed. It has more processing ability and more cores than the server we used for the first “Software As A Service” app I deployed in 2006. The tools used for development on that device are more powerful, more flexible and more accessible than anything that has ever gone before.
We’re interested in solutions that make butts pucker. We are interested in the company that not only turns an industry on its head, it does so by first disrupting itself. We are very interested in companies that are providing a product and service but also remembering to collect data because, even if they don’t know what to do with it yet, the data will provide concrete intelligence on where to go tomorrow. And all of this is buildable.
I had a meeting with an investor this morning and we talked about data. We talked about two hardware product companies who collect data but have not yet leveraged data and how he’s bringing cash but also the way to leverage the data into the deal.
The last line of Richs’ essay I find most entertaining:
The split second you get any traction, any success at all?
Look over your shoulder, they’re coming.
You are already ‘the old way to do it.’
At Raise, we are building the future. Not only in terms of our startups and pipeline but also the future of startup ecosystems. We’re working with everyone who wants to work with us (to wit; we hosted the recent Startup Ecosystem Lunch in Belfast). We set up the collaborative calendaring. We brought people together to talk about Startup Week and we pushed to get a load of people down to Startup Week Dublin. We see the future as collaborative, as inclusive and with a minimum of government interventions. Why? Because government intervention looks like traction, right up until the money stops flowing and then the intervention disappears. I learned this the hard way and we aren’t making the same mistakes (we are prepared to make all new mistakes).
So, read below. Rich Segal on how to make a corporate butt pucker.
Original text below the fold: From TypePad
How to make a corporate butt pucker
I’ve had to sanitize this story a bit to protect the really spooky people in a really big and powerful company but I wanted to share this as I think it really sums up neatly why I love the opportunity rich world we are living in today.
I had the opportunity to sit with the CEO and CTO of a really large company in the US. Couple of hundred million in revenue. It was an event, I was at the table, etc, etc. We got to talking and I asked a fairly simple question, basically, do you guys worry about some little guy coming out of nowhere and eating your lunch because you have all this major investment in existing systems, people, pricing, etc, etc.
Imagine if you will the stereotype “fat cats” from Corporate America and you will have the attitude I got as they responded.
Now, son, we have tons invested, the best people, a lock on the market, a pile of customers and we just don’t waste time worrying about somebody that can’t out spend us or have all of our people or systems. As long as we just keep pressing on, we will be fine.
Keeping in mind the last time I coded something for general availability, there were toggle switches on the front panel, this will be even more meaningful.
I responded by saying, gee, seems to me a web service could be created fairly quickly with a database to do X and these functions to do Y. Ha, the CTO says, it would take years. Well, let’s test that theory, I said.
We move over to place with power for my laptop and crank it up.
First thing I do is fire up the Verizon card. Plenty of signal and plenty of bandwidth.
Next, point out that I can pull down Microsoft’s express developer tools for free. I further show that I can get 6 months free trial on the big stuff, like SQL Server. We then zip over to a hosting provider which offers a ton of bandwidth/storage for 100 bux or so a month. I then proceed to, as they say, code it up. I already had the Visual Studio stuff on my laptop. Within, call it 15 minutes, I had the basics up. I then did the ‘self host’ routine on my laptop to simulate what it would look , started putting in fake data, etc.
About this time, the CEO does what everybody does. He starts with can you do this, can you do that, etc, etc. I bounce in and out of dev mode, make a tweak here and there, presto.
Then the CTO starts in with an endless stream of “Yeah, but.” Yeah, but what about bandwidth? Easy, buy burst, pay for what you need. Yeah, but what about servers/hardware costs? Easy, rent the rack, rent more as you grow.
I then broke out excel and laid out the costs of what I had just done and what it would take to get something up in, call it, 90 days. It was not, as you can imagine, very expensive. In fact, using Microsoft software, there was really no cost for 180 days. And, if you wanted to just get a beta/test out, all you really needed was to pay for a hosting provider.
The reactions were right on cue. Guess who said “WTF are we paying for all this stuff in the company?” “How come it takes six months just to get a change in screen layouts and another 2 months to line up the application to get ready for distribution to our customers” Right. And Guess who said “Well, errr, uhhh, it’s really not that easy to explain.” or said “I can get some people to look into this”
Personally, if I were running a company with established products, established market share, sales guys making good commissions, IT departments with volumes of policies and processes, I would immediately do the following:
- Find the nearest University Computer Science Professor.
- Have him/her round up some bright, promising students.
- Bring students into your company and have your marketing person spend a day explaining what your company does, sells, offers, etc.
- Offer the student that codes up/presents the best new way to do whatever you are doing a full scholarship and a job.
I think you get my point.
The split second you get any traction, any success at all? Look over shoulder, they’re coming. You are already ‘the old way to do it.’