• How hard customer acquisition is – (“we’ll build it and they will come”)
• How unattractive an employer you are to the population of highly talented and experienced workers and how badly the odds are stacked against you in the workforce marketplace
• How long it takes to raise capital
• How draining the emotional rollercoaster is
• How hard it is to identify and anticipate a real, pressing market need

For some of these, you need a good plan, for others, experience and fortitude.

Tim O'Shaugnessy

In the last 18 months, no other early-stage startup entrepreneur in the DC area has raised more money than Tim O’Shaughnessy, CEO of LivingSocial. $49M is a tall figure. And if you want evidence that the #1 attractor of capital is traction, look no further than his company and its meteoric ascent to the “IPO potential” crowd.

I personally don’t equate fundraising success to success, I think about closing a round as interesting validation of something, but that something is harder to pin.

But the story of LivingSocial deserves to be studied, for it outlines an innovative approach to building a business. Ultimately, it’s the age-old story of unearthing a deal, finding a way to match demand to supply and taking a cut. And in the case of LivingSocial, its bigger competitor Groupon and other interesting retailers such as Gilt Groupe, it’s the story of the emergence of a new category, social commerce, and the transaction that it enables at its core.

As Tim put it earlier this week at FastTrac, “the concept we were attacking when we started the company was this notion of marrying where people lived with what they do”.  If you’re one of the 15% of the DC metro area population who gets a daily offer from LivingSocial you understand: it’s a deeply discounted deal offered by a local business, a spa massage or a hotel getaway or a coupon for a skydive.

What is original is the notion of using email marketing and personalization to connect a individual with a local business, and doing it in a way that it appears a huge win for the individual (the deep discount) and the local business (a massive surge of concentrated customers).

How did they stumble upon this?

Tim and his other cofounders jumped ship from Revolution Health and started Facebook application development in 2004. They built a couple of applications that went viral. One, in particular, “Pick your five”, encouraged Facebook users to pick their five favorite movies, books, drinks, foods, etc. In the first day it was launched it acquired 2.2M users. As a side-effect of these projects, the company built a massive database of users and preferences.

Later they came across a small company that had salespeople in 3 markets primarily focused on selling drink promotions to restaurants, subsidized by drink manufacturers. This company had the deals with the brands (e.g. Bacardi) but was struggling to drive the traffic to the restaurants where the promotion would be consumed. And here comes LivingSocial with a massive database of online users, their geography, and their preferences.

Once you think about it, it seems like such an obvious thing to do, but nobody had done it before.

For me, some interesting observations:

• Facebook changed the game completely: never before could a developer build an app that would go viral so fast as when they launched the Facebook Application platform.
• With consumer plays, it’s all about the eyeballs. You amass them first, then figure out later what to do with them. This is such a radical departure from how B2B plays work.
• Market makers are richly rewarded with transactional revenue, but you have to uncover the deal and match the demand and the supply first.

Other things that Tim shared:

• “The most useful part of a business plan is the actual creation process.” You can pretty much trash it after that.
• “Attack concepts, not ideas”
• “Make sure you always know the problem the concept is solving”
• “Startups are ugly, they’re supposed to have warts”
• “Hurdles lower your chance of success, eliminate them” and he mentioned hurdles such as doing contract work, part-timing, having too many founders.
• “Test constantly” – this one is a lesson we’re taking to heart at Ringio, ultimately it seems like the ultimate lesson: apply the scientific method and you will make progress.
• “Our biggest asset is our sales team”

It is hard to predict what will ultimately happen with these kinds of businesses. To me, the “daily deal” primarily segmented by geography seems like a fad, and a blunt instrument. In the last 24 hours I was offered a ticket to a Halloween party that doesn’t appeal to me at all. But maybe the obscene amount of money that they’re making will give them a chance to fine tune the technology and the approach and turn them into the next Amazon.com.

photo credit – Washington Post.

I have compared web analytics to Angelina Jolie; that comparison should suggest how sexy it is, how powerful it is, and what a force for good I think it is. By the time you are halfway through this book I am positive you’ll agree with me.

Avinash Kaushik in the introduction to his book Web Analytics 2.0

If that doesn’t get you to read the book, what will?

If you want your venture to succeed pay more attention to detail than your competition.

Here’s how I visualized his idea:

Funny how he puts it, eh? But in a sense, it’s true, your should count on luck going to others, and most of the time they will have money on their side too. Your tools are your craft, and a laserlike focus on details.

And then Eric went on to give a myriad of examples of what being attentive to detail meant:

• Understand your customers in detail: for example, at Five Star Alliance they understood that buying a luxury good required a luxurious buying experience, and that gave them a leg up on much more established travel booking sites.
• Run your marketing efforts with a meticulous analytical mentality. He showed us how deep an understanding of SEO they developed, and how much experimentation they did with their SEM efforts. Every marketing dollar counted so it had to be spent on whatever produced the most results. Some figures he threw out: 6% CTR on ads. 0.7% conversion to bookings, top 1% Google spenders. He told us about how their platform allowed them to turn SEO hypotheses into content into indexed pages in a very quick manner and allowed them to be very opportunistic.
• Develop a detailed view of your cash cycle. This encompasses the steps and timing between getting charged to provide the service and getting paid.
• Pay attention to how you spend your money. In other words: be cheap, but not stupid cheap. Buy used, bum office space from fellow entrepreneurs, sub-sub-lease at $16/sqft. He told us of a time when he heard Don Rainey’s technique of slipping a bartender at a trade show $50 to use Grotech coasters and achieve the same effect than a much more expensive conference sponsorship.
• Pay attention to who you hire. This focused on sales teams, but he said that he only hires sales reps that consistently, year over year over year have beat their quota, president’s club material. They’re expensive, but any one with less of a track record ends up being equally expensive or even more expensive if you take into account the opportunity cost.
• Pay attention to your product feature performance. He told us that, in the beginning, they spent 1/3rd of their R&D and website space on Tina, a virtual concierge, and it didn’t work at all, so they cut it in 60 days (while his competitors dragged on).
• Pay attention to what people say about your company online. Monitor forums, social networks, and protect your reputation.
• Pay attention to the cash flow. “Everybody should consult on the side” when getting started.
• Do more detailed market research than you would naturally be inclined to do. He explained to us how he has spent almost 2 years researching the market and interviewing 75 exec-prospects for his new high end marketing solution. Iterate over the feedback you’re getting and tweak the product designs before you get more feedback.
• Selling is an “attention paying” activity. He’s a big believer in Sandler Sales Training, which he calls “a sales method for engineers”. This means focusing on the sales prospect and his problems, not your spiel. Focusing on asking questions you know the answers to, and you can solve. Focusing on what makes a difference in your prospect’s life (reputation, credibility, bonus…). Focusing on starting at the right organizational level (at the top).

I could list a lot of things that we’re dong at Ringio to follow this principle, but one that that we’re driving home hard these days is paying attention to our active evaluators and doing everything in our power to increase our chances of turning them into paying subscribers, playing with promotions and messaging and incentives, and understanding really deeply who our customers are and why they’re buying.

1. Build your target experimentally. Instead of pontificating on a Word doc about what your target market is, why don’t you go out and get 10 customers to pay to solve a problem for them? If you do, for some categories of software, you have yourself a target market. Choose this bottom up approach whenever you are competing in a category that allows rapid product development. Heck, you might even want to try Sean Ellis‘ approach of selling something you haven’t built yet. (Kudos to Ashish for coming up with this tactic)
2. Make small extrapolations. If you already have a good understanding of some market segments, how about making small extrapolations from targets that already work to define a segment that you can dominate. For example, at Ringio, we have hypothesized that current buyers of Virtual PBX solutions (a commodity, undifferentiated, but popular segment) really need and want a call center product, if they could afford it. And that’s our target: SMBs that appreciate a call center solution but are on a Virtual PBX budget.
3. Focus on them, not on you. The best segments are defined by attributes of the buyers, not you. Do they have the inclination, pain, budget and immediacy to buy your solution?
4. Irrational > Feelings > Rational reasons. You can rack your brains to define a segment of people behaving rationally, but frankly, a lot of the most powerful decisions are based on feelings such as desire  (luxury), fear (security), or playfulness (entertainment). What problem does World of Warcraft solve? It’s the wrong question. Even more powerful is when you play in a market that is not even reasoning about problems, there are simply bigger (and often) irrational imperatives. For example: compliance, government mandates, monopolies and cartels.

photo credit – flickr user law_keven

I thought I’d recap some of the key insights, as I found them valuable.

Origins and Product

• Duke and his cofounders started really young, in his very early 20s from his college dorm. In his own words: “You couldn’t escape tech innovation at Cornell in the late 90s and early 2000s…”
• The first few years of Parature were very lean, focusing on turning fanatic users of their chat product into paying subscribers. Those early users were mostly “mom and pop” online retailers who were trying to humanize the shopping experience.
• They stumbled upon SAAS almost by accident. They were trying to be very frugal with buying licenses for servers and they found that by putting more than one customer on a server the costs were lower than the competition. He mentioned his chinese heritage as playing a role.
• Their ticketing product (which is now probably the core of their offering) came out of discussions with Michael Chasen, the CEO of Blackboard, who gave them a chance to convince him of buying a yet to be made competitor to Remedy, which was a lot more expensive. Instead of booking PS hours they focused on licensing the technology… and that’s how the product was born.
• As time went by the used a “bowling pin” approach to product development: find 2 or 3 customers that could be knocked down with a feature, then build it.

Fundraising from Angels and VCs

• From ’01 to ’06 Parature was built into a $4M run rate, 30 person, 300 customer business only on Angel funding.
• Meeting Ching Ho Fung at a conference was serendipitous and they created a great relationship and won themselves a core angel investor, a mentor and a networker.
• Ching Ho would tell Duke that VCs would come to him once the business had traction, but it took a while for Duke to internalize this information.
• Eventually, a barrage of VCs would come knocking on Duke’s door for a Series A, and they ended up raising $13.5M from Valhalla and Sierra. Duke wanted an West Coast VC (probably to help with valuation) and the West Coast VC was a lot more comfortable with the investment once they understood that there was a local VC to do the play by play.
• What finally made Duke go for a Series A was when some executives from SFDC came knocking with a (somewhat) lowball offer for the business. It then became clear to him that they were winning at least 50% of the deals vs. RightNow, but they were only seeing <20% of the deals in the market, because they had 4 sales people and RightNow had 30. They used the VC’s capital to throw money at the problem of rapidly accelerating sales (my experience observing at Angel is that there are smarter ways of doing this, see Sales Learning Curve [PDF] ).
• Another key learning was that Ching Ho made them practice board-level accountability by setting quarterly goals and then reviewing together whether they were met or not, a sort of rehearsal for the time when there would be professional VCs in the board.
• In July 08, a few months before the collapse of the financial markets, Parature raised a $16M Series B from Accel. He entertained us with the stories of how he negotiated the term sheet (he says he probably got a 10% bump on the valuation and negotiated away some of the preferences). You could tell by the passion of his narrative that he obviously enjoys negotiation quite a bit. It made me wonder how different profiles of founder would deal with this, or if it is the case that investors should only put their money in the hands of founders with a great panache for negotiation.

Some reality check

A few things to keep in mind, though, as one ponders the lessons from his talk, are:

• Entrepreneur does not equal “founder of a VC fundable startup”. There are many solid small business opportunities worth pursuing that simply don’t have the large market potential and huge return that a VC would expect in a business that they would want to fund. Very few entrepreneurs in the Mid Atlantic own businesses that will ever qualify for a $13M Series A and a $16M Series B.
• While Duke made the case that the dilution of multiple rounds of investments was worth it (as the Blackboard CEO would put it, “I’d rather own 2% but be the CEO of a publicly traded company”), I don’t think that it is that clear cut. There is something to be said for building a business to a reasonable exit that creates a solid return for the capital that is already in the business, especially for a first-time entrepreneur.
• There are probably other perspectives on Parature’s story also worth considering (the old adage about “history is written by the victors”)

My key take aways

• Get yourself a Ching Ho. Invest time in finding and developing a relationship with those who could become real angels for your business: people with a depth of experience, a breadth of connections in the institutional investment world and a true coaching spirit.
• Focus on building your business. You will only get a great deal from VCs if they are coming after you, and best kind of traction is revenue, new customers, new deals. So don’t go waste your time chasing investors, focus on customer acquisition.
• Learn to be a great story teller. Duke has done loads for his business and for himself by learning how to tell their story, and connecting with audiences. At the end of the day, customers buy from people, investors invest in people, so if you can be persuasive, genuine and passionate, you’ve won half the battle already.

Today we tried the WeSpace in Lake Anne in Reston and it was a nice experience:

I met Andrew Nachison, the CEO of WeMedia who runs the space and he was helpful and welcoming…. I have high hopes that this space will attract a lot of entrepreneurs and deliver on the promise of coworking.

At $30/day, trying it is a risk-free proposition.

according to sources that have access to Google’s thinking, Larry and Sergey do not want anything that works outside of the Chrome browser, making Google in my mind the next AOL in thought process. Many will recall that AOL only wanted their users to live inside the AOL application and some things, like voice and video clients need to live elsewhere.

via VoIP Watch.

So for the uninitiated Voxeo prospect, here’s a diagram that I hope helps you figure out their how their products fit together.

It’s all mostly about finding out what kind of development style do you want to follow. Here’s a decision tree:

• I don’t want to program and my application is simple: Voxeo Designer and Evolution
• I don’t want to program and my application is sophisticated: Voxeo VoiceObjects
• I want to program:
• ….. in XML: Prophecy and Evolution
• ….. in a functional language such as Ruby or Python: Tropo
• ….. a high concurrency full-fledged telephony service in Java: Moho
• I just need a bunch of SIP or XMPP type-components: try PRISM
• I want to build a web-based application with Ribbit-style telephony in Flash or Javascript: Phono

The last twelve months of my professional life have been the most exhilirating, rewarding and challenging of my 11 year career. As I restlessly worked on Ringio, the most valuable lesson I learnt was: Never go it alone.

First I have two amazing partners: Ashish and Michael. Ashish brings a wealth of technical expertise, but more importantly, he is a no-nonsense commonsense decision maker and a tireless doer. Michael is a nuclear-powered dynamo, but more importantly, he knows what counts the most at each stage.

Without them, the business would probably be in bad shape. But they’re here, and that has meant the world to me.

Then there’s the team:

• Alberto Perez, without his leadership our engineering project would have never got off the ground or through the finish line
• Nico Nombela, his technical ideas underpinned the brilliant architecture of our service
• Alberto Vilches, whose mad skills and inventiveness made it possible to use so many leading edge technologies
• Mario Muñoz, who made it possible for us to have a great mobile application
• Quique Torres, who infected the team with his enthusiasm and passion
• Hwi Lee, who made one of the best interaction designs I’ve ever seen in a telephony product
• Jae Mun, who contributed a sharp visual design to all our interfaces
• Sukanya Thirthamattur, who tirelessly uncovered and whacked out bugs
• Gerry Preville, who accounted for every dollar and cent
• Joe Boyle, who made it possible to have proper legal documents
• Mike Sweeney, who put together a brilliant website
• Andy Abramson and the Comunicano team, who cheered for us and gave us a real persona with the media

Last but not least, all our investors, who trusted us with their hard-earned money with so little to show.

When I sit down and count all the people who have lent their ideas, their time, their passion and enthusiasm, their feedback… the lesson is clear. Business is a tough and lonely place, so never go it alone.

To all of you: thank you for making this dream a reality. Ringio Rocks!

If you head over to the EComm website you will see a very solid lineup of speakers and companies for the upcoming 4/19 San Francisco edition… as usual, Lee has come up with a fantastic schedule. I’m quite looking forward to attend this year, and here are some of my favorite talks:

• The Future of P2P — Eric Klinker (@ericklinker), the CEO of BitTorrent is going to cover how peer to peer communications are bound to change how we think about computation. I am a HUGE fan of BitTorrent and peer computing, so I have high hopes to learn a ton. I have high hopes that he will build the case for how much innovation can be had in business models with this technology.
• Social Sharing 2.0 — Jonathan Rosenberg, the Chief Scientist of Skype, is focusing on how much more we can expect from collaboration and sharing in the upcoming months. I’m excited about his talk because I see incredible potential in what Skype can become in creative environments. And because for years I’ve believed that we can use social software for more than sharing baby pictures, to get real work done.
• How to destroy a $700bn industry for fun and profit — Martin Geddes. Why? Because he’s Martin Geddes, one of the most lucid thinkers in telecom. You don’t know about Martin? Check out this video for a taste.
• From distraction to real life — Kristian Simsarian of IDEO touches on another fascinating subject. Starting from the observation that technology today fosters distractedness, he wonders if it will be possible for new paradigms such as Augmented Reality to help us “be more present where we are”. Plus nothing like a good AI professor to make you imagine.
• And then, there’s Wednesday, all devoted to AR, a field of which I know very little, “like a box of chocolates… you never know what you’re gonna get!”

Hope you can make it! Shoot me a line if you want to connect while in SF.

Just to give you a heads up… I am planning to make a big announcement in the next couple of days.

If you’re interested … stay tuned.

Sam

photo credit - user ruth flickr – creative commons

Definition:

fug [fuhg]  (n)

1. a very poorly thought out feature.

2. a bug so virtuous that it appears to some as a feature.

Etymology: coined circa 2010. From the fusion of “feature” and “bug”

Let’s say you’ve got a day job at a company and you are not ready to quit to start your own business. For whatever of many reasons (excuses?), you’ve made the calculation that you either need the money / don’t have enough savings, haven’t found the right people to partner with, or you wouldn’t sleep well at night with all the intrinsic risks.

Yet you have an entrepreneurial streak and would like to start getting it exercised. Here are three practical ways to ease yourself into becoming a full-time entrepreneur:

1. Participate part-time in some other entrepreneur’s full time business. You’ve got a lot of skills, your day job is proof of it. You also have a stable income. Somewhere in your life is an entrepreneur who needs your skills but can’t pay you in cash. Get some equity instead, and practice whatever it is that you do for a living for him. You can share in the excitement, liberate yourself of the politics of the office for a few hours every night or weekend, and learn from the entrepreneur’s struggles and triumphs. Maybe with time you become more comfortable with the risks of starting a business, or the business you’re associated with grows and can afford your full-time services. This approach works for almost anybody, but is particularly suited to generalists such as marketing & sales, finance, legal, business development, strategy and product management.
2. Start a small-scale project that could turn into a full-fledged one later. More often than not the delta between corporate job and entrepreneurship lies within what you don’t know, not what you know. While approach #1 above is going to show you how a startup operates, somebody else is solving those problems. So if you want to learn about the things your peers do at your office, one idea is to start a small project where you can practice those things for yourself. For example: developing a mobile application for an app store, or a game, or a utility. These projects are generally small enough in scale that you can leverage your core skill and fake it enough with the other areas and offer you the perfect ‘test lab’ for your entrepreneurial ideas. This approach works best for technical people who have the core non-outsourceable skills a small project needs. Think MicroISV.
3. Start a project without economic ambitions. By far, the hardest thing to do in a new venture is to generate traction. It’s hard enough to get people to use whatever you have built, let alone get them to pay for it. A way, then, to learn entrepreneurship with ‘training wheels’ is to not even pretend to want to generate revenue. Do something good, do it for free, and see if you can generate free demand. With altruism at the center, it will be easier to attract other people to your project, either as volunteers or users. You can do good and benefit at the same time from the experience of building a team and producing something worth existing. There are many intriguing business models that have “Free” at the core. Some categories of software are especially a good fit for this, like B2B enterprise and infrastructure.

There is a fourth way: to join an employer that allows you to be entrepreneurial within the organization. The Google approach. It has many challenges, though, and in my opinion is only mostly doable with very adept corporate political navigators.

Common stumbling blocks to getting started:

• Your employment agreement doesn’t allow you to moonlight. There are two or 3 ways around this. Explain to your boss or HR person in broad terms what you’d like to do and get an exception in writing. Most forward thinking employers will. If your project has nothing to do with what your employer does, the chances are higher. You could also renegotiate your employment agreement. Need  a strong bargaining position for this. Or you can change jobs.
• Your job leaves you no time. Have a 60 hr/week job? Is the opportunity worth it? Sometimes, yes, many times, it’s an addiction. Can you get away with downshifting? What about getting a 20% pay cut and a 50% time commitment cut?
• Your life leaves you no time. You have kids, hobbies, or you love partying, or you need to take care of somebody. Some things are worth doing. Some others are just time-wasters. Strikes me how many people have a 20 hr/week part time job taking care of a TV screen.  Starting something requires re-prioritizing. It also requires having a support system: people who will make allowances for you to focus. Subject for another blog post.
• You don’t know any entrepreneur. This one’s easy to solve. Go hang out at a tech incubator, coworking space or startup / VC networking event in your town and you’ll meet tons of people. Maybe you hit it off with somebody. And you get to practice networking, which is such a necessary entrepreneurial skill.

Good luck and best wishes!

Sometimes piracy as a business model delivers value beyond getting the goods for free, it delivers convenience. And that is a point that many times escapes content publshers who associate their rights over content with the rights of how that content is consumed and impose on consumers restrictions that consumers find unacceptable.

Sometimes we get so caught up in judging the morality of illegitimate industries that we forget to learn some of their highly innovative methods.

So, instead of looking at the water, or looking at the boat, you look up at the sail. What is its shape? Is it flapping? Are there creases? What are the streamers (little pieces of cloth) doing? Then you read those signs and you learn what the wind is doing, and adjust your trimming accordingly. When you do that, the boat sails faster.

This got me thinking that what we do as product managers is similar in some ways. We want our product to get traction and gain speed in the market place. The product is like the boat, and customers are like the wind. To tell what customers want is hard, especially if you can’t see them.. Traditional product management encourages you to get out of the office and visit your customers. That is more doable when you have a small number of customers giving you a good chunk of money each. But if you have thousands of customers giving you very little money, the ability to quantify what they want is hard.

Just because you can’t see your customers doesn’t mean that you can’t feel them. Just like the wind.

It’s a criticism that many product managers have heard from engineers: why don’t you go and find some formula that gives each piece of product feedback a weight and each customer revenue potential a value and you come up with an empirical way to steer the product?

I guess I could mount a weather station on my little Laser boat. But that is not the essence of sailing. I’m not crossing the Atlantic. I’m just trying to get my boat to cross the lagoon fast.

So instead of getting all analytical about it, I just try to feel the wind on the sail, and made small course corrections and small adjustments to the trim. And because the boat is moving, I see the results of my adjustments instantly. Every small input gets me some information. Every big input increases the chances that I capsize (a subject for another blog post).

For me, the essence of product management is to sense intuitively what your customers are doing to your product and to make small adjustments to it. Just like sailing a boat, you generally know where the wind is blowing from, and where you want to go, but in getting there you feel the wind on the sail, and make it ‘happy’, and adjust your settings as the wind moves.

I’m back from vacation and dealing with a pile of backed up work and mounds of snow. Looking forward to catching a break next week and blogging. Lots of ideas to uncover!

1. What are the options? If I’m facing a challenge, or a project, I first use my imagination, I role play, I try to visualize how the situation would look if it was completed and ask myself: what are the options to get this done? Generally speaking, I find that a few minutes of creating alternatives can save tens or hundreds of hours later by pursuing the wrong path. For example: can I hire somebody to do this? can I subcontract it? Outsource it? Can I convince a partner to take it on? Even deeper: do I really need to do this? What happens if I delay? Can this problem go away or become irrelevant?
2. What is the most practical choice? OK, this would be the ideal way of doing it, but this other way, which takes half the time, gets it done. I wish I did it this way, but it turns out that I need to learn this or that. Instead, I’m going to chose the dirty or tedious approach. Because the value of getting it done now far outweighs the value of getting it done incrementally better, but later.
3. Is this the most important thing right now? Probably the #1 lesson from the 4-hour workweek is that. Find the most important thing that you can get done today, then do it. For an INTJ it’s so deceptively easy to see a tangent and take it. (And many other things too) So on the path to becoming a doer, there’s many things that I leave undone, because they matter less.
4. Is this work worth my hourly rate? Many knowledge workers tend to implicitly value their time at minimum-wage salary levels. They simply focus on things that somebody else could be doing much more cheaply. This question is an extension of #3. Because, many times, faced with the choice of shelling out actual money to get somebody to do something for us vs the hypothetical expenditure of our own personal time to get it done, we back away from the actual expenditure. Even though it’s not the rational choice.

Here is an excerpt of an interview with Nathan Myhrvold, CTO at Microsoft:

BROCKMAN: What’s a CTO?

MYHRVOLD: Hell if I know. You know, when Bill and I were discussing my taking this job, at one point he said, Okay, what are the great examples of successful CTO’s. After about five minutes we decided that, well, there must be some, but we didn’t have on the tip of our tongues exactly who was a great CTO, because many of the people who actually were great CTO’s didn’t have that title, and at least some of the people who have that title arguably aren’t great at it.

My job at Microsoft is to worry about technology in the future. If you want to have a great future you have to start thinking about it in the present, because when the future’s here you won’t have the time.

Convention

There are some interesting stereotypes about CTOs: the founder who could code, a sales engineer with gravitas, the mad scientist, the evangelist. Although you’ve surely encountered some CTO who fits that description — and it’s quite the case that many CTOs don’t know how to manage people, these stereotypes are just that, caricatures of reality.

A great CTO can do these things, but above them he/she can see the future and how technology can shape it, then gets to work turning those ideas into a product or service reality and explaining to its audiences how life is about to change.

He persists through all difficulties to see the company’s vision go out the door embedded in those products and harnesses the R&D resources to execute.

An example of a great CTO

One of the people I look up to is Steve Trundle. Steve was the original CTO of Microstrategy, from ’92 to ’01. Steve then went on to become the CEO of Alarm.com, where he is doing an outstanding job of growing the business. While at Microstrategy, Steve managed some of the most significant milestones for the business. Within the organization, he is widely credited with being a leader of technical people, and for setting the foundation for Microstrategy’s multi-decade technical dominance of the Business Intelligence industry. He didn’t do it by coding, or by doing great demos, but by aligning people with goals and removing obstacles for them to solve long term challenges. In other words, plain old execution. The fact that he so successfully transitioned to a CEO role is an indicator of how he understood the importance of creating value.

Cream of the crop posts on the job of CTOs:

• Eric Ries proposes 5 key contributions of CTOs: 1) platform selection and technical design, 2) macro and micro picture at the same time, 3) generating options, 4) finding the 80% of user value that can be built for 20% of the cost and 5) growing technical leaders
• Ben Brinckerhoff has some draft notes and he draws good distinctions between a CTO, a VP of Engineering and a Chief Architect.
• Tom Berray proposes  4 stereotypical roles for CTOs in a well written white paper.
  

  The 4 stereotypes of CTO at large organizations

• The CTO to CEO transition stresses the central tenet of this post, that a CTO needs to focus on applying technology to the generation of revenue.

CTOs are not…

• CIOs. CTOs produce technology, CIOs consume technology. CIOs make the company productive and keep its data safe. More on CTOs vs CIOs.
• VPs of Engineering. VPoEs focus less on strategy and more on execution. “They are process / management gods (and goddesses) – totally focused on building and shipping products.  Most of them are “medium technical” – strong enough to stand up to the engineers they manage, but not necessarily the best coders on the team.” says Brad Feld

Washington-Baltimore is the same size as Silicon Valley

I find it ironic that Washington and Baltimore are seen as two completely different tech scenes while Silicon Valley is one tight construct, when in fact Balt-Wash is about the same size.