Yesterday, I had the opportunity to spend time with the CTO of a major financial services company with a $1 billion IT budget. In these meetings I like to learn about the major priorities and where the open opportunities for early stage companies exist. The good news was that the company was very open to working with entrepeneurial ventures. Priority number 1 for the organization was to standardize on a common architecture and infrastructure. When the company deploys a new app, the developers should only have to worry about coding the business rules and not about what infrastructure to deploy and how to manage the application. At the end of the day, like most large institutions, this company was focused on increasing capacity utilization and moving to an on-demand model where new applications can tap into a pool of resources, where these resources are monitored closely for performance, and where these applications can have real service-level agreements and chargebacks tied to them. The company said it was still early in the process and that alot of the big vendors still do not address the needs.
The other major initiative was security. We spent a fair amount of time talking about best-of-breed versus the single vendor approach. While the company had a bias towards single vendor for most infrastructure buys, it certainly was an advocate of best-of-breed for security. We talked about how a monoculture was not as immune to disease and attacks as a heterogenous environment. What this means is not only layering security but also deploying 2 different security products at each layer to avoid company or product-specific attacks. This is a big deal at lots of companies which is why, despite the intense roll-up activity in the security space, that new vendors will constantly have the opportunity to sell.
As always, I had the opportunity to find out where a few of my companies were in the sales process. The big takeaway for me was that "you only have one chance to make a first impression." What does that mean? Well, in today’s environment, enterprises have the upper hand. This means that most enterprise sales end up in a proof of concept (POC) or bake-off against other competitors. So the first impression you make in the POC is the installation. If it is hard to install, forget about it. The logical conclusion your sales prospect will draw is that it is a hard to use product. So while you spend time building some great features and making your product more scalable, do not forget to spend time, lots of it, in the areas that customers touch and see. This means making the install process as easy as possible (this is where appliances can help in many cases) and making your GUI intuitive and easy to use. If you can’t get this right, you will lose most deals or at least be fighting an uphill battle in a competitive bakeoff no matter how scalable or feature-rich your product is. I tried to get my company a second chance, but the impression was already made.
Would be interesting to hear people’s feedback on what role documentation plays in first impressions on deep-dive evaluations. In enterprise software, whether early-stage venture or mature company, documentation is notoriously bad. On top of this, for early-stage companies that bootstrap and are still experimenting, documentation is something that could be junked a few weeks down the road as the product changes. Plus, no one wants to write the documentation. Yet I find that documentation (or lack of it) can affect first impressions as well.
In a pinch, where I tend to stand on this issue is that professional-looking quick start information is probably the best way to go. Gets people rolling without having to writeup every possible variation of config and use.
I might add that first impressions matter in almost any scenario. Whether we like it or not, people do judge books by their covers. A straightforward & elegant user interface and a simple installation process may seem trivial to the brilliant technologist, but they are not trivial to everyone else.
What is all this talk about capacity utilization and tapping into a pool of resource? I assume these are computing resources. Should a company be worrying about utilizing computing resources? These resources are not scarce and their costs are constantly in decline. It almost goes against the laws of supply and demand. The demand for computing resources increases and their price decreases. I know technology is constantly changing so the supply curve is shifting as well (cost of production is reducing). Ok enough economics 101. My point is companies should focus on utilizing a scarce resource.
“Priority number 1 for the organization was to standardize on a common architecture and infrastructure”
“When the company deploys a new app, the developers should only have to worry about coding the business rules and not about what infrastructure to deploy and how to manage the application.”
These two statements are conflicting. If a company wants the developer or ISV to focus on the business rules, the rules just the rules, why then are they forced into an architecture and infrastructure that may not be ideal for the rules being implemented. Web Services solves the architecture mismatch.
The service level agreement and charge back is a great concept. But who is to blame for the failure if everything is on a common architecture and infrastructure all accessing the same pool of resources. There will be finger pointing
You mentioned the appliance model. I feel it is a model of software delivery companies need to be taking a more serious look at. It seems that companies, CTO’s in particular, are in love with their “common architecture and infrastructure” and “pool of resources”. This love affair I hope will come to an end.
A straightforward & elegant user interface and a simple installation process may seem trivial to the brilliant technologist, but they are not trivial to everyone else.
First impression can be made in a variety of ways. First, many architects now religiously read the blogs of thought leaders in the community. If you could get someone they respect to give a nod to one of your portfolio companies then the entrance becomes easier.
Likewise, if you could simply figure out how to get your portfolio companies to learn how to sell, then you will close the deal. I have came across very few good sales people in my travels. VCs need to understand that the same person who opened the door need not be the same one who closes it…