Personal and professional development for technology professionals.
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By Rajesh Setty on Wed 16 Apr 2008, 9:49 AM - 1 Comment
One way to boost your “social networking” ego will be to connect to the same people on multiple social networks and add the numbers all up. Just don’t tell anyone that you are “double counting” or “triple counting”
Once you have had all the fun, you can create your own social network with the same friends via Ning 
Enjoy!
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Posted under Business Models.
By Rajesh Setty on Sun 06 Apr 2008, 7:46 PM - 1 Comment
Over the weekend, three of my close friends forwarded a New York Times story on Blogging. The title of the story says it all. Here is the link:
In Web World of 24/7 Stress, Writers Blog Till They Drop
At first I thought there was a message in there for me. I cross-checked and found that it was only because the story made some references to some of the topics covered in my next book.
Writer Matt Richtel references how blog fatigue may have been the cause of death for two prominent bloggers Russell Shaw and Marc Orchant. Matt also interviews other celebrity bloggers like Matt Buchanan, Om Malik and Michael Arrington. All the bloggers (all of these people are super-smart without a doubt) interviewed corroborated with the story and helped conclude that “Blogging fatigue can be serious”
At a very high-level, any addiction is dangerous. Too much of anything is bad. That I agree. However, the generalization across the board may be stretching it a bit.
One way to categorize blogs is based on two factors:
1) shelf-life of the content
2) importance of the content
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What Matt is referring to is one type of blogs that have content that is “higher on the importance and time sensitivity” and “lower on the shelf-life”. This is a category I call “vertical news”. Bloggers in this category are celebrity journalists in a vertical space. In this case, all of them happen to be in the technology space. They have to be on the run all the time because all the rules that apply to journalism apply here but without the resources that are available to big name news bureaus. Obviously there is a lot of stress in the business.
The other types of bloggers have the stress but nothing of the order of what you see in this category.
Have a great week ahead.
Posted under Business Models.
By Rajesh Setty on Fri 04 Apr 2008, 2:29 PM - Leave Comment
Generating sustainable competitive advantage is hard and it gets harder if your strategy to generate competitive advantage is to mimic the competition.
I was speaking to Rick Hubbard of Serena Software this morning and his quote (in the context of chasing “best practices”) aptly explains this.
Rick says – “The pill that cured your neighbour may be the pill that might kill you”
Every person and every organization is different. You can copy the actions but you may not be able to copy the results by simplying copying the actions.
If your strategy is to mimic – at best (and if you are lucky) you will catch up with your competition!
Posted under Business Models, Main Page.
By Rajesh Setty on Mon 31 Mar 2008, 3:10 PM - 2 Comments
This is a two-step process
1. Start a Google Adwords Camapign
Ex: Buy keyword like “Los Altos Coffee”
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2. Don’t create a website. You can just put an “Under Construction” message
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I thought something went wrong and clicked the same link twice.
Did my part to help Google!
Posted under Business Models.
By Rajesh Setty on Mon 03 Mar 2008, 8:35 PM - 5 Comments
I have been thinking about Social Objects. Social Object in simple terms is something on which you can have a conversation. For more thoughts from bright people on this topic, please refer to these links
1. More Thoughts on Social Objects by Hugh MacLeod
2. Social Objects in Education by Martin Weller
One of my heroes, Seth talked about this too in the context of his new book Meatball Sundae. If your company happens to be offering a service or a product that is close to a social object, congratulations! You have a good first step to building a community. But what if you are company does not have such a product or service.
In a recent interview at US News and World Report, Seth answers one such question
How should old-line companies approach these technologies?
First, companies have to decide: Either they’re in or they’re out. You either make meatballs, or you’re part of this new regime. But if you only want to use the regime to just sell more [meatballs], you’re going to fail. Gillette invented the safety razor on the back of two things: a really good factory and aggressive mass marketing. And they’re really good at it. The question is: Why do we think Gillette deserves to succeed in this new medium? My answer is: They don’t. There’s nothing about what Gillette does that makes them worthy of conversations online, that makes their ads in Google clickable, that makes you want to visit their website.
Read the full interview here (it’s simply great)
This is where Adjacent Social Objects will come in. Ajdacent Social Objects are those that objects that are not directly related to your product or service but are close – they are in the periphery.
Let me take an example (thinking out loud here) – Considering the same company (Gillette) mentioned above, let us think of a few adjacent social objects. I can think of two:
1. Gillette could start/sponsor a site related to anything and everything about grooming.
2. Gillette could partner with a world-renowned modeling agency to create a contest for “best face on earth”. One of the rules would be that it has to be clean shaven face.
Our own example is a site called All About Steak (which is a site that’s all about steak – recipes, grilling tips etc.) which was built in partnership with Kansas City Steaks. All About Steak is an adjacent social object for Kansas City Steaks. You can’t make people talk about steaks but may be people will talk about a discovery engine for steaks?
Adjacent social objects need not thought of only when your company can’t create social objects. They can be perfect add-ons and complement existing social objects. I can think of one more example. My super-smart friends Gautam Godhwani and Dave McClure created a site called SimplyFired (stories of people being fired for odd and not-so-odd reasons) to complement the site SimplyHired. SimplyHired (vertical search engine for jobs) was a social object already – but Gautam and Dave brilliantly complemented it with an adjacent social object – SimplyFired.
What about in your business – what adjacent social objects can you create?
Posted under Business Models.
By Rajesh Setty on Mon 11 Feb 2008, 1:18 PM - 86 Comments
I could not believe when I read this email. I read it again. This is a lesson on business models – really about what should not be your business model. Globat tried this last year and they are repeating the same this year 
This is a long letter so if you are busy, just read the highlighted part.
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Dear Rajesh,
We have some exiting news! Based on customer requests and in-depth analysis of usage patterns, we’ve created a mega-sized new Web hosting package that’s currently only available to select customers like you.
In 10 days from this date, we will be upgrading you to this exclusive new package, the TeraByte Ultra Plus(tm) for the low one-time upgrade fee of $49.95. You’ll get an enormous 200%* more hosting space and 200%* more transfer bandwidth.
Go to Globat.com and you’ll see our most popular package, the TeraByte Xtreme(tm). While that package is the one most people will see on our Web site, this new package, the TeraByte Ultra Plus, is not available to the public! You won’t find these packages available anywhere on our site:
• 3 TB (3,000 GB) of Web Hosting Space – 200% MORE*
• 3 TB (3,000 GB) of Data Transfer Bandwidth – 200% MORE*
• 15 MySQL Databases – 400% MORE*
• Host Unlimited Additional Domains – The 10-domain limit is gone!
*Versus our standard TeraByte Xtreme package
Of course, the features you’re used to such as GloBlog(tm), the Globat Photo Gallery, and other 1-Click Installs will still be part of your enhanced hosting package. The TeraByte Ultra Plus is an upgraded package designed to bring you more features and give you the best Web hosting package available anywhere.
Click the link below to read more about the new TeraByte Ultra Plus.
(If the link doesn’t work, please copy and paste the entire link into your browser.)
http://www.globat.com/learnmor
As your trusted Web host, we strive to provide current and relevant products and services to maximize your experience with us. It is our pleasure and honor to host <<domain name>>, and we appreciate that you continue to give Globat.com the opportunity to serve your Web hosting needs.
Since we began our upgrade program, we have received lots of feedback from our customers who only heard about these upgrade promotions too late or through a friend. Many customers then suggested that we utilize an automatic upgrade process along with some form of an additional incentive to initiate these upgrades. Well, we have listened to your feedback and we are now acting on it!
= = = Important: This Is an Automatic Upgrade = = =
As one of our most valued customers and based on our customer feedback, we are absolutely certain that you want to take advantage of this opportunity. This truly is the largest and most feature-rich Web hosting package we’ve made available and we’re sure you do not want to miss out.
For that reason, we will automatically upgrade your current hosting package to the TeraByte Ultra Plus and charge the $49.95 one-time upgrade fee to your account on file on Thursday, February 21, 2008, unless you specifically tell us not to upgrade you by clicking on the link at the end of this e-mail.
Last but not least, your upgraded account will also qualify for 3 free months of hosting once the upgrade is complete and you are fully satisfied with it. I know that this sounds too good to pass up, but if you for any reason do NOT wish to take advantage of this incredible upgrade promotion, you will need to tell us so by clicking on the link at the end of this e-mail.
= = = TeraByte Ultra Plus – The Best Ever = = =
Our customers told us they wanted more space. Done. You wanted more transfer. Done. In addition, you wanted to be able to take full advantage of your space and transfer by hosting as many different sites as you want. Well, that’s done too. We also know that many of you run dynamic sites requiring more MySQL databases. Done and done! The TeraByte Ultra Plus was created to give you everything you wanted and address the concerns you voiced to us.
If you are still not convinced that this is a tremendous opportunity and you are positive that you do not want to participate, you need to tell us not to upgrade your account by clicking on the link below. (If you do not click this link, your account will automatically be upgraded and you will be charged the $49.95 one-time upgrade fee.):
NO, I DO NOT WANT this upgrade and hereby decline my 3 free months (click below):
<<opt out link>>
(If the link doesn’t work, please copy and paste the entire link into your browser.)
Thank you for your continued trust! If you have any additional questions about this new package, please contact us anytime at tbupgrade1@globat.com, or call us at 1-877-245-6228 option 2.
Best regards,
Globat.com – Sales and Marketing Team
(877) 245-6228 for US Customers
(323) 874-9000 for International Customers
=========
Sad story!
Posted under Business Models.
By Rajesh Setty on Sun 10 Feb 2008, 9:41 PM - 5 Comments
Answer: Trucks
I didn’t realize this until Hari (Hari Shetty of Jiffle) mentioned this to me first. We were passing next to a truck from 1-800-GOT-JUNK on El Camino Real. When I mentioned to Hari that this truck has been parked there since yesterday, Hari told me that I was wrong. He said it has been parked there for months. Later he explained to me that this probably their advertising model.
 [Note the photo above is not the one of the truck that I mentioned. This is from Flickr] |
Thinking about it further, it makes a lot of sense. There is no legal restriction on using parked trucks for advertising and it is definitely cheaper than buying advertising on billboards. Bonus – you also get the advantage of depreciating that asset.
Interesting?
Posted under Business Models.
By Rajesh Setty on Mon 14 Jan 2008, 6:01 PM - 7 Comments
Some background first:
We will be working with a few dating companies as there is an OEM opportunity for one of my portfolio companies. So I started thinking about this business a bit.
Fundamentally, the promise of a dating website is to find the “right” match for you.
Let’s think about some other businesses who also promise to provide you the “right whatever they are selling” for you.
Dell built a business on customization but it is Starbucks took it to the next level. You can go to Starbucks and order a “Grande with whip and glaze Oranges and Creme Frapuccino LIGHT Blended Creme” (courtesy: WikiHow article – How to Order at Starbucks)
You can see examples of “Do It Yourself” and “Build Your Own” options being offered by many businesses.
In other words, you can get that “perfect” item just made for you.
I think people are getting used this so much that now a lot of people try to apply it to human beings. With a few clicks they can go to their choice of dating sites and start looking for that perfect match. They may find someone that is almost there but why stop search when you “might” be able to find that “perfect” one?
So the quest continues
As long as people are in pursuit of perfection in something (in this case a human being) that can never be perfect, the dating business will continue to flourish.
Posted under Business Models.
By Rajesh Setty on Tue 11 Dec 2007, 9:50 PM - 4 Comments
..And a typical VC on a typical startup
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We all know that things change. Almost all of the eight startups that I am involved (in some capacity) have gone through serious changes in business models. Business models evolve and the ultimately the marketplace determines what works.
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VCs know this too. This means that, in most cases the original business model (for which founders are seeking funding) will not be the business model probably a year later. However, it is not easy for the VC (or even the founders) to know what the “real” business model is going to be. If the founders did know the answer to this, they would have presented that to the VCs.
If you want to have a good chance of getting funded, best is to present a team that can not only execute “Plan A” but can also execute any reasonable modification of “Plan A”.
Have a great week ahead.
Posted under Business Models.
By Rajesh Setty on Mon 10 Dec 2007, 12:02 AM - Leave Comment
I read two articles recently – one by Glenn Kelman (Entrepreneur 2.0 article on TechCrunch) and other by Guy Kawasaki (In Search of Inexperience). Please read both the articles when you have a moment. The key conclusions from those two articles were that serial entrepreneurs (those who are in their second and third acts) have a disadvantage in making their companies successful. Reasons quoted include but not limited to: complacency, less drive, less hunger etc.
Disclosure: I don’t know Glenn but I respect what he is doing. I am and continue to be a big fan of Guy Kawasaki, his books and his blog.
I respectfully disagree with the conclusions from both these articles and the rest of this post explains the reasons
1. Search for inexperience: First, I don’t think there is a need to “search for inexperience”. It is available everywhere. We all know that anything that is commonly available and in plenty does not get a premium. In my opinion, there are more people who think they want to be entrepreneurs than the ones that are really “willing to pay the price”. So, since the “inexperience” is available in plenty, there is no one “looking” for it. So urging investors and others to start taking “inexperience” seriously is confusing. It’s everywhere – so where should they look?
2. No statistical support: Of course, there is no statistical support for the claims.I don’t think anybody has done research on startup failures and compared the results based on who started the companies (first-time entrepreneurs or serial entrepreneurs). Since both Glenn and Guy are talking about garnering support for first-time entrepreneurs, it is clear that currently there is not much support for first-time entrepreneurs. That means, RIGHT NOW first-time entrepreneurs have a hard time to get their companies to succeed. This leads me to conclude that there is a lesser chance of success for first-time entrepreneurs.
3. Exceptions are not the rule: Typical examples quoted are Yahoo, Google, Facebook etc. These, for me are exceptions than rules. For every one of these successes, we can at least find a few dozen companies that are in the dead pool.
4. Serial entrepreneurs have more capacity: With every success, people take you more seriously. Take anything in life – if you have done it successfully many times before – people believe that you can do that again. Success in the first company will showcase the accomplishment and helps build the identity for the entrepreneur. Valuable accomplishments and strong identity will increase the capacity for the entrepreneur. Hence a higher chance of succeeding in the next company.
My $.02
There is no need to discount the value of experience: Experience is important. Sadly, the person without experience can’t experience the benefits of experience and the person with experience will see many things as “obvious” and hence won’t see “experience” as a big thing. However, we see the need for “experience” almost on a daily basis:
In all the cases above, the first-timer may turn out to be just fine? But what are the odds and do you want to take a chance?
Comparing apples to oranges may lead to questionable conclusions:
From the illustrations, let us look at these numbers:
A – Represents successful ventures by first-time entrepreneurs
B – Failed ventures by first-time entrepreneurs
A+B – Represents the universe of first-time entrepreneurs
C – Represents successful ventures by serial entrepreneurs
D – Represents failed ventures by serial entrepreneurs
C+D – Represents the universe of serial entrepreneurs
The right comparison will be between A and C. If we compare A (successful ventures by first-time entrepreneurs) and D (failed ventures by serial entrepreneurs) we are comparing apples and oranges leading to questionable conclusions
Motivation to write this post: I wrote this post for a reason. After reading these articles, I am sure first-time entrepreneurs are more encouraged. I could see that from the comments. However, this or anything like this will not make it easy for first-time entrepreneurs anytime soon. It is hard work for them and there are no short-cuts. Examples of grand successes by first-time entrepreneurs are more of an exception than a rule. The good part is that today the environment (offshore, open source, sotware as a service business model, mashups) is such that entrepreneurs need less capital to build certain types of companies. There is also a lot of help available on the internet. However, the PRICE that needs to be paid by a first-time entrepreneur has not changed much.
Posted under Business Models.
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