Enterprise Software Landscape

[via Sadagopan] Jeff Nolan writes:

1) Direct enterprise selling sucks, is highly inefficient, and makes you do unnatural things in your product strategy in order to drive higher deal sizes

2) Large enterprise software vendors are not the future…There are 38 million businesses in the U.S. alone that have less than 10 employees, there just has to be a way to grow our collective markets by appealing to these business users and Im pretty confident in saying that it isnt going to come from SAP, Oracle, or IBM.

3) The SOA-ification of big enterprise products has attacked a technical dimension, not an economic or business model one.

4) Big enterprise software has historically been a product driven development process, not a user driven approach.

5) Lastly, and most importantly, there are no new big killer apps that are going to be built for todays enterprise. Global business has spent the last 40 years automating every corporate function that is worth automating, and then they automated it again through process reengineering and once more when that didnt work out quite like everyone thought.

Venture Capital Model

The New York Times writes about Sevin Rosen’s decision to close down:

The high-risk, high-return venture capital business may have turned into all risk and no return.

That, in a nutshell, is the message that a prominent venture firm delivered yesterday to its investors when it told them that it could not continue to take their money at least not for the time being.

Explaining its decision, Sevin Rosen, which has offices in Dallas and Silicon Valley, said that too much money had flooded the venture business and too many companies were being given financing in every conceivable sector.

Fred Wilson adds:

we need a new approach to the kind of companies we fund and we need a new approach to how we fund them and how we get out of them. I don’t see that as a “broken model”, just a model that we need to tweak. The answers are pretty obvious actually.

We’ve got to raise smaller funds.
We’ve got to do less “hard tech” and more “soft tech”
We’ve got to figure out how to make great returns on $100mm to $250mm exits
We’ve got to limit our IPOs to our very best companies

Casual Games for Mobiles

The Register writes:

uniper believes that market growth will be fuelled by increased purchases of so-called “casual” games rather than cutting-edge 3D and multi-player ones, and it says games that concentrate on the inherent strengths of the mobile platform, rather than those which simply seek to replicate console or PC games on a handset, will enjoy the greatest success.

“I think mobile games have come of age. They are no longer the poor relations of console and PC games. They are a different family of entertainment products with its own family characteristics. The casual games sector is going to be the market driver, even though it may not be at the leading edge of mobile games technology. Casual games make most use of the inherent advantages of the mobile platform. People want to fill ‘dead time’ with easy to use, but fun games. This is the same in just about every culture,” said Bruce Gibson, research director at Juniper.

Internetisation of Everything

paidContent.org reports on a talk by Tim O’Reilly:

His tips: think about how you get users to add value to what you do and his observations are fascinating:
– Asymmetric competition: Britannia didnt see that their biggest competition would be Google. And in his own technical book publishing business: My biggest competition isnt other book publishers – its people searching on the web and finding the information for themselves. Which, of course, goes for pretty much every business.
– Wikis: He showed a fascinating visualisation for the change log for an entry that demonstrates, amongst other things, how UGC is an important way of encouraging an audience to engage with a site.
– Self-interest: UGC can provide efficient and very useful services that people need, like apartments to rent and jobs.

Vinod Khosla Interview

Excerpts from Business Week:

As a successful entrepreneur yourself, does it get easier after the first time?
Yes. You learn about how to do it and you learn how to scale. You learn what not to do and what you don’t know. I don’t worry about scaling too much now, because if we have a technology breakthrough, we know how to hire the management that knows how to scale. We are always looking for both the technologists and the management teams.

What were the biggest mistakes you made the first time that others should avoid?
The hard part is all the stuff you don’t know you don’t know. That will happen no matter what. Even the basic idea of what scaling is aboutthe way to implement scaling. When do you worry about it, when don’t you? What’s scalable, what’s not? What’s too hard? How do you fit into others’ expectations and leverage the ecosystem? How do you minimize your liabilities and maximize your assets? How do you get funded for subsequent rounds of financings? How do you hire the right teams? Make corporate partnerships? It goes on and on.

TECH TALK: The Rise of YouTube: A Big Deal?

In the world of technology, every so often comes a mega-deal which jolts everyone out to their comfort zone and makes them think hard about the future. One such recent moment was when I read on Friday night that Google was in talks to buy YouTube for $1.6 billion. By any measure, this would be the harbinger of a huge shift in the Internet. It would herald the coming of age of both video and user-generated content. The deal may or may not happen. But the very fact that discussions are underway is an indicator of how things evolve on the Internet. YouTube was almost an unheard-of company at the start of the year!

It is just over a year since eBay bought Skype. To be precise, that deal took place on September 12 last year. I was in Rajasthan in a dharamshala without electricity. I read about the $2.6 billion deal on my mobile. Skype had the users but little revenue. A few months before that, News. Corp had acquired MySpace, a social networking site, for $580 million. Just a few weeks ago, there were reports that Yahoo was in talks to buy Facebook, a college social networking site, for a reported $900 million. And now, YouTube. The era of mega-deals on the Internet is coming back.

All of these companies had little revenue. What they had done successfully was win a category. In each case, the acquirer seeks to build a dominant position in an emerging category. For Skype, it is person-to-person VoIP. For MySpace and Facebook, it is social networking. For YouTube, it is video. In fact, the two hottest trends of 2006 are social networking and video. YouTube has smartly built a community around video.

This is what the Wall Street Journal wrote: An acquisition of the closely held company [YouTube] would catapult Google to the lead spot in online video at a moment when consumers are rapidly increasing the amount of time they spend viewing video clips online, and Internet video advertising is booming…Like Web browsers and search engines before them, YouTube and social-networking sites are recognized as front doors to the Internet where companies can grab users’ attention, and to try to link them to other services or hit them with marketing messages.

It is a time of dramatic evolution on the Internet. Social networking sites and user-generated content have combined with Web 2.0 technologies to give a fillip to innovation. Multimedia is now easy to create and distribute over the Internet. (Just the other day, I watched a few clips from an old Hindi movie on YouTube sitting in Mumbai.) Users are also more involved in rating and reviews, and help good content rise to the surface, solving, to a certain extent, the problem of discovering new and interesting content. It all makes for a fascinating future. Any surprise that YouTube is up for sale?

Tomorrow: Googles Interest