Lots of small companies will do anything to sign up a big customer. Startups often make concessions of two varieties:
- We’ll give you more stuff (read: features/support).
- You give us less stuff (read: money).
Often, when we meet companies who have made big concessions for a customer, we often hear the justification that Company X is a “strategic customer.” The word “strategic” here is taken to mean that, by virtue of signing up this particular customer, your company will be able to gain some proprietary advantage in the marketplace: greater legitimacy, a new sales channel, lots of PR, etc.
Calling certain customers “strategic” is dangerous, however. There are no strategic customers, only anti-strategic ones; and here’s why.
It’s that time of year again. Summer is winding to a close, and students are returning to campus. The energy in the air is palpable, especially in a place like Boston, which seems to live and breathe along with the student population.
Yesterday, I spent the afternoon at Harvard Business School, meeting with former professors and chatting about what the next year holds for the entrepreneurship curriculum. I’m admittedly envious of what faculty members like Tom Eisenmann have planned for the MBAs this year. You guys are so lucky!
My nostalgia got me thinking about what I wish someone told me before I started my first week of business school. Here are my top 3 pieces of advice. Continue reading
Last time on interview to venture, I sat down with Boris Revsin, co-founder & CEO of CampusLIVE. Boris is a first-time CEO in his 20’s and is building a consumer internet company that is transforming the way college kids interact with brands. This week, I decided to give you some exposure to the other end of the startup spectrum and sat down with Patrick Morley, CEO of Bit9 (a Highland portfolio company).
Based in Waltham, MA, Bit9 is an enterprise software company battling on the front lines of a multinational cyberwar. When you hear about Fortune 500 companies or U.S. government agencies getting “hacked” by foreign terrorists, you are hearing about a problem that Bit9 solves. While cyberwarfare may not be a top of mind issue for most Americans, Patrick is emphatic about one thing: what we are seeing today is “the biggest transfer of intellectual property that the world has ever seen…and it’s all occurring illegally.”
Patrick is also an experienced startup executive (Bit9 is his sixth VC-backed startup) with some wise words for younger entrepreneurs. Here are a few choice nuggets I’ve strung together from the embedded interview video above. Enjoy!
We’ve all had it happen. One evening, you sit down at your dining room table to write a killer blog post. You fire up your Mac Book Pro, brew some herbal tea, and put WordPress.com into “quiet mode.” With a flurry of keystrokes, you start pounding out nuggets of blogging gold. You spend at least an hour creating graphs and neat little examples to illustrate your points. You pick a funny picture from fail blog to put in the upper-right hand corner. Hilariousness ensues.
All of the sudden, a moment of self-consciousness washes over you: “I wonder if anyone else has written about this before.”
Yeah, someone probably has. @rdhjr tells me Harry Truman once said: “The only new thing in the world is history you don’t know.” That makes me feel a bit better.
In my case, I started writing about building sales-driven financial models, but (alas!) David Skok of Matrix Partners beat me to the punch almost a year ago. His series of blog posts on SaaS Economics (part 1 and part 2) cover the topic in far greater detail than I had intended. (If you want to play along at home, download his excellent spreadsheet here.) What I’ll do instead is draw heavily from his posts and provide an answer to a question I get asked frequently.
Last week, the WSJ raised alarm bells by reporting that 5 of the top 10 desired employers of MBAs this year are consumer technology companies. Long-standing service firms like McKinsey, Bain, BCG, Goldman Sachs, and Blackstone were joined by likes of Google, Apple, Facebook, Amazon, and IDEO.
So many MBAs seeking jobs in tech has spooked those of us who increasingly fear a second dot-com bubble. Many cite the Harvard MBA index, which famously tells investors to short any “market sensitive”sector with more than 30% of the Harvard Business School class entering it. In 1999, that sector was tech. Others — like Bob Lutz, former Vice Chairman of General Motors — believe that MBAs with their “balance sheet driven management policies” corrupt organizations that productize technology. (I wonder what visionary GM CEO Alfred Sloan, whose name graces the MIT Sloan School of Management, would think of Bob’s new stump speech. But, I digress…)
So, should we really be concerned? MBAs are easy targets and, being one myself, I am a bit defensive of them. That said, I do believe the case for MBAs in consumer technology is fundamentally different than it was a decade ago. At the very least, it’s different for the types of tech companies MBAs are pursuing today, like those listed above.
Here are 3 reasons why MBAs seeking jobs in technology may not be the end of the world.
Last week, my friends at OpenView Labs published an interview of me and a few other VCs (Phin Barnes, Brad Feld, and Rob Go). Each of us was asked the same two questions.
You can read the full article here, but I have also reposted my answer below.
Keep checking out OpenView over the next few weeks for other questions they asked me!
Investing in education is the new black for venture capitalists today. The once unsexy sector is finally getting its moment in the sun, and it isn’t hard to understand why:
Highland has invested in several education technology companies to date, including 2tor (which I have discussed on this blog before). The reason we have gathered the conviction to invest in these startups has a lot to do with the above list, but also depends on a more subtle observation.