Category Archives: BEA

Bill Campbell says, It all starts with great products!

Here’s a bit more from the Bill Campbell interview. I posted the first excerpt in “Bill Campbell says hire Product Management first!“.

Michael Moe is the interviewer. This exchange takes place about 4:20 into the video.billcampbell

Click the image above to open a window and view the full interview.

Michael Moe

So, what are the key metrics that you track when you’re working with a company. How do those metrics change as the company goes from being a startup, to an emerging company and as it gets larger? How rigourous are you with early stage companies?

Bill responds:

The rigour that goes into the first product is the most important thing. Everybody talks about great companies. Great companies start with great products.  You can’t make chicken salad out of you know what.

This is a truism if there ever was one. How many great startups can you think of that had mediocre products?  People may not know the company well, if at all, but they hear about a product and the product (good or bad) defines the company.

Bill continues:

I’m a big believer that you really track the progress of the product. I go back and talk about Mike Homer and a Product Marketing* like person. What are we doing to make sure we have something that we can ship and release? Get it out into the market place.

Tracking that one single thing — what can we do? who is it for? how do we guide it? Getting great product into the market place would the single most important thing.

That would be the number one metric that I’d judge and boy you’d go a long time in your company before you stopped doing that.

* Bill Campbell equates Product Marketing and Product Management earlier in the interview. See Bill Campbell says hire Product Management first! for details.

While not technically a “metric”, Bill again focuses on making sure the thing that is being built is being built for the right people. Making sure an identified target audience (and set of valued usage scenarios) are front and center during this early phase.

This answer also support’s Bill’s earlier statement that Product Management skills are key at the very earliest stages and should be hired in right at the start IF those skills are not strong amongst the founders.

One final note

What’s most interesting about this answer from Campbell is that he doesn’t say great companies start with great people. That’s what a lot of people would say, but it’s not true. Great people can build great products which lead to great companies, but there are many well known examples of companies started by experience or knowledgeable people (e.g. Cuil and Cassat) that have failed to live up to expectations.  Once a company builds a great product (or service) that people use, that drives company growth, and ideally makes the company a leader in it’s market segment, can a great company emerge.

Saeed

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What can we learn from Cassatt’s demise?

There’s an interview with former BEA co-founder Bill Coleman in Forbes about the last days of his company Cassatt.

Bill Coleman is now the founder and CEO of Cassatt Corporation, a San Jose based software maker focused on data center management.

When thinking about software companies, it’s hard to think of one that had such a good pedigree, so much funding ($100,000,000) and such a large market opportunity. Bill is a true Silicon Valley veteran, having had senior positions at Sun and then co-founding BEA (he’s the “B” in BEA). Other members of the management team are no slouches either.

But the interview is quite telling in what may have lead to Cassatt’s sad ending. And in a couple of cases, it’s surprising that a rock-star management team and sophisticated investors would get caught the way they did.

First off, I love the subhead of the article:

Software maker that vowed to topple giants hit by economy, slower sales–and giants.

It almost reads like a headline from The Onion. Reminds me a bit of the failed Cuil launch.  You know, the search engine, founded by some ex-Google folks, that stated it’s goal was to take out Google. Why do people think they can pick fights with and bring down industry giants? Maybe it gets you some press, but how much is that worth if your product or service doesn’t live up to the hype(rbole)? Time for a Product Management Axiom:

Nail it, then scale it!

Find a good meaty problem, solve it really well, make sure you know why people will pay for it (by actually getting people to pay for it!) AND then figure out how to scale it up and take out the big guys. Seriously, why get on a big competitors radar when you have no way of defending yourself against their attacks?

Bill has a few choice lines in the article. Here’s one:

“The big guys copied my story,” says Coleman.

Yeah, so… Isn’t that what the “big guys” always do? When the “little guys” innovate and create something potentially valuable, the “big guys”  either buy the little guys, or barring that, copy them.

Or barring that, the big guys spread FUD, until they can either copy them or buy them or buy one of their competitors, thereby copying them. That line sounds a bit too much like a high-tech version of “the dog ate my homework” excuse.

And then there’s this line:

“I thought I could give companies something radical that had a proven return on investment, and they would be willing to change all their companies’ computer policies and procedures to get that.

Huh?  Give companies “something radical” and they would be willing to “change all their policies” to buy Cassatt’s product? Who can give me examples of when this ever happened. I’m saying “examples” because it may have happened once, somewhere. But really, this line in the article shocked me.

Lesson for anyone who thinks this could possibly happen:

Change is a process, not an event

It’s another Product Management Axiom, and one no product manager or executive should forget.

Nobody, and I mean nobody, gets up in the morning and thinks, “I’m willing to change everything about how my business operates because a vendor has a really great product that could save me money.”

Seriously, what’s the risk/reward ratio here? Huge risk, and maybe a medium sized reward?  And the real cost, not just the cost of the software, is enormous.

I once worked on a product where the architecture and GUIs were radically changed in a major release. It was absolutely the right thing to do.

The architecture went from 2-tier to 3-tier and provided great scalability improvements for customers. Customers had been complaining about performance and scalability in the product. And the GUI changes were primarily driven by user requests for a more sophisticated workflow mechanism in the product. Overall customers loved the new product, but the biggest complaint about the upgrade had nothing to do with technology.

As one large customer said:

“It took us 2 weeks to upgrade and test the new release to ensure it was working properly. It took us one year to retrain everyone on how to use the new GUI and capabilities. Please don’t make that kind of change again.”

So in the end, what did Cassatt in had little to do with technology. In fact, what does most  high-tech companies in usually has little to do with technology. In Cassatt’s case, as in most cases, it has to do with underestimating their competition, not understanding the psychology of their customers and buyers, and compounded with what looks like a case of overconfidence by the management team.

Saeed

Here’s the deal with Biz Dev (Part I)

Saeed has posted two fairly provocative items about business development. (Here are the first and the second.) Frankly, Saeed, you’re not following your own advice. To paraphrase you, “Enough with the missives about Biz Dev”.

If you’re getting annoyed by what’s going on in your company, then you have two choices — help fix it, or move on. There are a couple of other choices actually, such as do nothing, or complain about it on your blog, but to be honest, if that’s what you do, then you’re not as great a product manager as you think you are.

hmm.

Certainly it’s easy to poke a stick at biz dev, and I could tell a few stories of my own. Several years ago, Intel was courting my CEO to have us port my product line to the Itanium chip, and thankfully I got to meet the Intel guy with my CEO for espresso at the old Starbucks by Moscone before we committed to anything. We were interested seeing what Intel might offer us, and my CEO really wanted to ink a deal with them. As Saeed said, it was “strategic”, and the Intel logo would look really great on our investor slide deck, or so our CEO felt. As is well known, the Itanium chip was a failure. Thankfully we didn’t invest.

In fact when we poked at Intel’s proposal, we found that the market for our product on Itanium would have been tiny; it would have been a tool to help people writing apps directly to the Intel metal, a specious group who wasn’t likely to increase our revenue. I suggested that Intel could pay a very large sum for our source code with an exclusive license on its doomed chip, but Intel didn’t bite. At that point our CEO saw that the logo on the Powerpoint slide wasn’t worth the distraction.

But I have also seen business development add major value to a company. When I was at Wily Technology, I saw how business development could be used strategically to strap a rocket to the company and create the engine for the company’s phenomenal growth. (And it was phenomenal. Eventually we were acquired for $375M, greatly exceeding the multiples of our peer group.)
What’s the difference between Saeed’s experience with BD and the Wily success story? It boils down to strategy, alignment, and value creation.

I’ll elaborate in future posts on this topic, so please stay tuned.