In Pursuit of Becoming a Platform

StartupsI focus exclusively on investing in software startups that build products used by businesses and business users. My current and past portfolio includes infrastructure companies such as Aria Systems and Splice Machine as well as application software companies such as Doximity, MarketoStellar Loyalty, and Workday. Most of these use a SaaS business model.

My investments are often very early stage – Seed and Series A – with either just a product/market concept (e.g. we invested in Marketo when it was just an idea, no code or customers; the same with Doximity and Stellar Loyalty) or prior to a Minimally Viable Product (MVP) such as the case with Aria Systems and Splice Machine.

This involves a lot of risk because these companies have significant hurdles to overcome — incomplete teams, lack of product/market fit and/or a repeatable go-to-market process. The trade-off for that risk is ownership. We can secure 20%+ ownership in these companies so that if they are successful, they have the opportunity to be significant drivers in our fund.

The Rise of RevTech and EmpTech

Machinery-ManufacturingMy investment partner at InterWest, Doug Pepper, and I co-authored an article on TechCrunch this weekend titled  “A New Revolution Modernizes The Revenue Supply Chain“.

In it, we discuss a new class of enterprise software applications that we see emerging in the Front Office and Back Office. These new applications are not replacing first generation applications per se (e.g. CRM, ERP, HCM).

Instead, they are using the transaction data generated by first generation applications  to provide real-time business insights at “the moment of value” — when a decision needs to be made by an individual, manager or executive.

They are also doing something very interesting — they are embedding collaboration and workflow into the fabric of the applications and leveraging mobile for anywhere, anytime computing across the enterprise.

These new applications, we believe, may be the foundation of a step-function increase in global employee and company productivity.

We have given these data-driven enterprise applications the labels of “RevTech” (Front Office) and “EmpTech” (Back Office). They are already helping companies to optimize both their revenue supply chains and talent supply chains.

I encourage you to read the article and provide your comments. Always interested in your feedback.

Why “Organizational Behavior” Was My Most Important Collegiate Course

I didn’t know it at the time. In fact, when I took it, I thought it was a complete farce.

Maslow’s “Hierarchy of Needs”? Are you kidding me?

I was majoring in Engineering and taking calculus, physics, chemistry…you know, the serious stuff meant for serious students. But, to graduate within some reasonable amount of time (where “reasonable” was defined by my parents), I needed some additional elective units. So, I decided to take one of the only classes that wasn’t already filled and would satisfy the requirements for me to graduate; this turned out to be a class called,  “Organizational Behavior”.

I looked up the description of Organizational Behavior which read something like this:

“The study of the way people interact within groups. Normally this study is applied in an attempt to create more efficient business organizations. The central idea of the study of organizational behavior is that a scientific approach can be applied to the management of workers. Organizational behavior theories are used for human resource purposes to maximize the output from individual group members.” Source: Investopedia.com

“Oh my god!”, I thought. “Is there any way I can get out of this boring, irrelevant class? Is this a legitimate/real subject?”.

The Power of Consistency

Last week, in preparation for a commercial launch, I asked the CEO of one of my companies the following questions:

  1. Do you and your team feel you know the 3-5 things you do that no other company can do?
  2. Do you feel your customers, prospects and industry analysts understand what these unique capabilities are and value them as “must have”?
  3. Do you believe your Corporate Sales/Investor Presentations, Corporate Demo and Corp Website feature your unique capabilities?
  4. Do you believe each and every person inside your company knows your unique capabilities and value propositions and can recite them verbatim?

These questions sound fairly simplistic but in order to answer affirmatively requires a company to have put in place strong internal communication processes.

 

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10 Commandments v 7 Deadly Sins

Just an observation on this “day of rest”.

Do you ever notice that every Sunday, many who follow a religious way of life are reminded of and attempt to live by the 10 Commandments but the other 6 days most seemed compelled to embrace the 7 Deadly Sins?

Speaking of sins, Wrath seems to be a super popular choice – at least on the SF Bay Area freeways.