John McArthur’s New Venture Blog

I had a call yesterday with a guy (I’ll call him Julio, because that isn’t his name) that is responsible for storage decisions at a very big company (I’ll call the company Acme, because that isn’t the company’s name).  I can’t name the company or the guy for reasons that are obvious to anyone who works in a large public company.   But I can share the gist of our conversation.  The part that is interesting to startups is the conversation we had around supplier management, environment complexity, and supplier support.

Julio’s at the end of a purchase decision cycle, and he told me which way he was going.  “We’re going with Sun, at least for now,” he said, “because they provide great service, we’ve worked with them for years, they understand our environment, and quite frankly, I don’t want to add another supplier.”  (more…)

The Boston Globe today reported a restructuring of IBM’s Hardware Division around customer types, as opposed to product types.  Personally, the move makes a lot of sense to me.  I spent a good part of my IT procurement career working for State Street Bank, a very large financial services company, and I got used to viewing things one way, the State Street way.  Basically, if anyone could break something, we could. We scaled bigger, and required higher levels of performance, service, support, and availability than 99.999% of the companies in existence.  I remember an IBM systems engineer saying, “You don’t need 5 ms response time from your storage.”  He was wrong, and we installed EMC storage that delivered the performance we wanted.

It turns out that most companies don’t need what State Street needs.  I had to relearn that fact, when I became an analyst at IDC.  It took me a few months to remember back to the days when I used to assemble PCs out of parts to squeak under the $100 capital-budget spending limits of my previous employer, Pioneer Financial, a Cooperative Bank, long ago subsumed in a round of bank mergers and now part of Bank of America. (more…)

I had coffee yesterday with Crawford del Prete, EVP at IDC.  We were discussing some of the areas in which my partner and I are going to be making some investments, when he reminded me of a quote by Paul Saffo.

“Never mistake a clear view for a short distance.”

I like the quote in particular, because it fits with earlier comments I’ve made about companies with products that have been “directionally correct,” but too early.  I think I mentioned the Apple Newton.  That example sort of belies the notion of “first-mover advantage,” doesn’t it? (more…)

When I was interviewing candidates for analyst positions at my former employer, I would often engage in a friendly exercise of “cognitive estimation.”  We all use cognitive estimation  to answer a question, when the exact answer is unknowable, or difficult to know without expensive or difficult measurement.  Clinical neuropsychologists use normed tests of cognitive estimation to evaluate the impact of brain injury, dementia,  and Alzheimer’s disease in patients.  Back at the market research company, I made up my own examples to assess the “common sense” and thinking process of applicants. Here’s an example: 

“How many gallons of ice cream were sold in Massachusetts in the month of July, 2007?”  

You could spend a lot of money with research houses, point-of-sale tracking systems, or field observers, and come up with some rather precise numbers.  Or you could take the total number of Massachusetts residents, multiply by some reasonable estimate of daily ice cream consumption on warm days (something more than a spoonful and less than a quart, I’d guess) and multiply that by 31 days, and get to a good-enough, back-of-the-napkin answer.  This back-of-the-napkin analysis is exactly what seems to be missing in some startups, and it’s exactly the kind of analysis that marketing needs to be doing before product development engages too much engineering talent.

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My early-October blog entry on market development has sparked a good number of responses, but all through e-mail.  Again, I’m going to pass along an anonymous comment that came in last week, while I was in Dallas at Storage Networking World.  Here it is, unedited… (more…)

Thanks to the miracle of RSS readers, one of my readers was alerted to and then responded to yesterday’s post.  Though it would have been nice to have him post it directly in the comments section, he did give me permission to republish his comments.  So here it is, name withheld, formatted, but otherwise unabridged: (more…)

I’ve been thinking about this question more and more lately.  Who should drive product development?  Personally, I see three possibilities, and, in my opinion, only one is correct:

1. Sales
2. Engineering
3. Marketing

For the most part, I tend to think of these issues for technology companies, since that’s the area where I work. But I could as easily ask this question in the restaurant business, though I would substitute “the chef” for “engineering.”   In fact, let me do that, just in case one of my technology clients, through their own self evaluation, thinks they recognize themselves in the example and mistakenly thinks I’m criticizing them personally.

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Last month, at the request of a friend at Genesis Partners, I facilitated a roundtable discussion with Chief Security Officers (CSOs) and Chief Information Officers (CIOs) from a few major global companies.  The assembled group was part of a technology advisory council that the firm leverages to help guide them in investment decisions.  There’s nothing like a few generals in the trenches to tell you what the “real world” is like.

Prior to the roundtable discussion there was a brief introduction by Dr. Henry Kressel, who has just written a book entitled “Competing for the Future: How Digital Innovations are Changing the World.”  He closed his remarks with a cautionary comment that those of us who live in the United States need to prepare emotionally for a world in which our children are substantially worse off than we.   The premise is founded in part, at least, on his accumulated evidence that digital innovation is moving rapidly away from its previous center of concentration in the United States.  I’m not sure if it’s some sort of accelerated innovation entropy, but there’s little doubt that very innovative technologies are now coming out of countries and regions that had previously contributed very little to the digital revolution.

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OK, it’s summer, and while that doesn’t mean any less work, it does mean additional responsibilities, such as car-pooling three children (mine and one other) to a day camp.  It puts a squeeze on time, and the only release valve is 9 pm until whenever.  My last conference call yesterday was 11 pm, thanks to some very helpful development folks in India.  I’ve also written drafts of , but have yet to complete, several blog postings. 

In the meantime, I thought I would share with you this link to Metropolis, published by Japan Today.  It includes some very creative and entertaining inventions, which are, for the most part, completely outside of the world of high tech.  My favorite is the “commuter’s helmet.” Enjoy.

I’ve made more than a few mistakes in my various careers.  One of them was buying a near bowling-alley length automated tape library (ATL) with a robot whose size, if not speed, would rival any in Detroit.  I made the purchase based upon the promise of future enhancements that would ensure this would be the last tape library I would ever buy.  You see, the ATL was going to be upgradeable to a Virtual Tape Library (VTL), and all my backup and restore problems would be, if not solved, at least contained.   To be fair, it was a committee decision, but I was a strong internal proponent.  Suffice it to say that the VTL upgrade was late and more virtual than real, and the ATL wasn’t the last library the company had to purchase.  In fact, I heard rumors that a second ATL was  offered for free, since the VTL upgrade was late.  But I can’t verify the rumor.  By that time, I had moved on to a new company, where my job was predicting the future.  The irony is not lost on me. (more…)