We are in the final days before SXSW/Interactive begins this year. During the past week I’ve had some entrepreneurs that I respect a lot tell me they are not going this year and ask why I’m going. I’ve heard comments like “SXSW has jumped the shark”, “its not what it used to be”, etc. Going to SXSW this year has started to feel like listening to Skrillex months after all the cool kids deemed him to have gone too mainstream. My friends have asked me why I’m going, so I thought I would write a blog post to answer the question.
1. There are a ton of high quality people going this year.
A few months ago when I was making the final decision about whether or not to attend this year, I posted on Facebook and asked who was going. I also asked a number of our customers/partners. My take—more great people were going this year than ever before. Sure there may not have been as many super early stage entrepreneurs going, but there were a ton of execs from DataSift partners, customers, etc going. An interesting reference point—-DataSift is hosting a VIP dinner for CEOs, market analysts, etc. We planned for 15-20 people. We now over 70 folks signed up. Ironically some of the people I’m most looking forward to are San Francisco-based folks that travel so much that I haven’t seen them in months, even though we have offices just blocks away.
Tens of thousands of people attend SXSW Interactive every year. If you can’t find lots of great people to spend time with in a group that big, you may want to reconsider your approach.
2. Spontaneity/serendipity is alive & well at SXSW.
Many people don’t know this, but I’m actually at DataSift *because* of a random spontaneous connection at SXSW. Nick Halstead (the founder of DataSift) and I connected for the first time at SXSW back in 2011, in a pretty random way. A mutual friend double-booked us for lunch and the three of us ended up eating together. As a result of that completely spontaneous meeting I eventually joined Datasift as CEO. It was probably one of the best professional decisions I’ve ever made and all thanks to a little luck at SxSw.
Every year since then I’ve continued to have some great conversations/experiences I didn’t expect:
* Last year I randomly met three different people that eventually became customers of DataSift while hanging out in the lounge at the Four Seasons. (I was actually staying at a Marriot nearby, but somehow telling people to meet me at the Four Seasons sounded more fun than telling them to meet me at the Marriot.)
* After two months trying (and failing) to coordinate a meeting time that worked for Klout’s rock star Joe Fernandez and me to meet, I ran into him on the street and caught up with him for a while. I also introduced him to a potential hire—someone who I had just met that was leaving Microsoft and loved Klout.
* I ran in to a good friend of mine at a restaurant, and I ended up tagging along to a book signing event for Brian Solis, a principal for Altimeter Group. It was the first time I really got to know him and we are now big customers of Altimeter.
I suggest ignoring whiney blog posts that complain about a lack of spontaneity at SXSW. Being an entrepreneur means creating your own luck/spontaneity, rather than sitting back and complaining. There are *ton* of ways to increase the odds of in your favor. (Joining SXSW FB posts, hosting your own events, etc.)
3. There is still housing, if you are willing to work a little bit to find it.
Sure the main hotel rooms book out long in advance, but with some crafty planning you can still get housing. I did some checking around and somebody gave me a great tip——to try Homeaway. Their site is great. Sort of like Airbnb but based in Austin. What do you know? They have inventory! The DataSift team was able to find two different apartments within a ten minute walk of the Convention Center with only two weeks before the start of SxSW.
If you are a traveler that insists on staying at the W or Hilton at the last minute, you may be out of luck, but with a little hustle good housing was available even a few weeks ago.
The SXSW conference was first launched in 1987. I’m guessing there have been complainers/naysayers every year since. There will always be some that say SXSW has gotten too big, too impersonal and not cool enough but I’d encourage you to ignore the haters and make your own decision.
I’ve had such a great time every year at SXSW (and made so many great connections for work) that this year I’m giving back—I’ve invited two SXSW first-timers to join me. Both have networks that are very different from mine. Based on the email traffic already going around, they are going to introduce me to a ton of new folks.
In the end I suppose one’s approach to SXSW is a lot like being an entrepreneur—it may be easier to complain about something than to try and make the best of it and turn into something better. However, I would argue that the second is a hell of a lot more rewarding than the first.
Yesterday the Jive CEO Tony Zingale at the Fortune Brainstorm Tech was quoted as as describing Yammer as being “dead”. As entrepreneurs, we are all prone to making dramatic pronouncements, but I felt the statement was so different than my personal experience that I was prompted to comment. More importantly, I think Tony’s statement could give readers an incorrect sense for the market for Corporate Social that I felt compelled to write a personal blog post.
I have tremendous respect for Tony. Between his success at Mercury Interactive and what he has done building Jive into an industry leader, he is one of the B2B/Saas CEOs that I look up to. That said, I respectfully disagree with Tony on his take on Yammer.
While I obviously don’t have access to proprietary data about Yammer’s performance, from what I can gather from publicly available data, Yammer is pretty far away from dying and actually seems to be doing quite well.
1. Yammer’s User Base Is…Growing. From a recent TechCrunch article, it looks like their user base grew from a little over 5M to 8M since the acquisition in 2012. (as of June 2013). An increase of 55% in a year seems pretty impressive to me, especially in a field that has other aggressive, well run competitors like Jive. (http://tcrn.ch/169FYGO)
2. Yammer’s Engagement Has…Increased. The same TechCrunch article indicated that, Yammer’s user engagement has roughly doubled since the acquisition. Users seem to be continuing to adopt Yammer and get value at a breathtaking pace.
3. Yammer Continues to Launch New Features. I did some more digging and it looks like Yammer has continued to launch new product features on a weekly basis including tight integration with Microsoft Sharepoint Online & Office 365 (no big surprise there). So, no, innovation is not dead there.
4. I’m in no way an expert on stock pricing, but its interesting to me that since Microsoft acquired Yammer , their stock has outperformed Jive’s, despite what appears to be a decline in their core Windows business. Correlation isn’t always causation, but I’m guessing that a company that Microsoft has bought for more than a billion dollars that has continued to grow has helped Microsoft’s stock price in some way.
It’s popular to knock the lack of innovation for companies after they are acquired by bigger companies, but it’s not always true. Some of the favorite my favorite tech products seem to be *accelerating* their growth since acquisition. Instagram (acquired by Facebook) and Buddy Media (acquired by Salesforce) are two that immediately come to mind.
In all these instances, the parent company smartly retained the founders/CEOs of the companies they acquired. From Dave Sack’s LinkedIn profile, it looks like he is still actively involved in running Yammer. From Kevin’s Instagram feed, looks like he is busy as ever running Instagram, and Mike Lazerow has done an impressive job of scaling into the CMO of Salesforce Marketing Cloud.
Even Microsoft seems to have done pretty well with Skype, which arguably was bought from another big company. Skype is now driving the equivalent of one-third of the entire planet’s phone call volume. That sure sounds like a post-acquisition win to me.
To me, Yammer’s growth is actually a sign of a broader trend—-the accelerating adoption of Social in companies. Here at DataSift tools like Saleforce’s Chatter, Twitter and Facebook have been absolutely crucial at promoting communication amongst team members and with our customers. The combination of private and social networks together is giving companies a much richer source of information about the world to make better decisions. (Altimeter recently published a really high quality report on the topic which you can find here: http://bit.ly/13i3ADO)
On a broader note, this has been a very thought provoking learning experience for me. For us entrepreneurs growing companies fast, dramatic pronouncements about the success/failure of companies/products post-acquisition are great for grabbing headlines, but may be an empty win and frankly, something to avoid. (To be clear, I’m ashamed to say I’ve been guilty of it before myself.)
Shouldn’t we cheer for all big company acquisitions to be successful? Not all start-ups are lucky enough to have the success of Mercury Interactive and Jive and go public, meaning a company must therefore look to acquisitions for the big win for employees and investors. Stating the obvious, the more successful the big acquisitions are, the more acquisitions there are likely to be in the future, right?
I’m personally as inspired by the tremendous success of big acquisitions like Yammer, Buddy Media and others in the Social space as I am by the companies that have gone the whole way to being public companies, like Jive. They are inspiring to our team, promote innovation and keep us working late nights and weekends building a company we are passionate about. Its exciting to think (to paraphrase Winston Churchill) that if you spend years building a product/platform you are passionate about, that an acquisition is not the beginning of the end for the product/platform, but rather the end of the beginning.
Like most of you, yesterday I read a blog post from Andy Dunn “Dear Dumb VC” (http://bit.ly/18t23Qs) and one of my board members, Mark Suster, “98% of VCs Aren’t Dumb” (http://bit.ly/13Xr8hV). Their core disagreement concerned the prevalence of dumb VCs. I think the discussion was informative but I actually missed what is possibly the most important point regarding VCs: each entrepreneur gets the VCs (and VC relationships) they deserve. In other words, entrepreneurs have lots of of ways of influencing the quality of your VC relationships.
Most entrepreneurs have significant control over who invests in their companies and, more importantly, the quality of their VC relationships after the investment. Here are five ways an entrepreneur can maximize the value they get from their VCs:
Get To Know VCs Before You Get In Bed With Them. I’m constantly amazed at how frequently entrepreneurs treat fundraising like a trip to the money supermarket. They go to the VCs when they need them and try to make the fundraising process as short as possible. Since I joined DataSift, we’ve only taken money from investors we’d known for at least 6-12 months. This meant we had a significant personal history and context before we had to choose a term sheet in a competitive situation. In our case, we wanted ‘lean forward” smart VCs who had strong opinions and demonstrated their command of our business and knowledge of our sector. After a year, we knew our VCs had the knowledge and passion we wanted. In short, we were looking for "Jerry McGuires": Investors that were genuinely passionate about what we were doing and our team and willing to go the extra mile.
You Can Dramatically Impact How Smart Your VCs Are About Your Company & Therefore The Quality of Their Advice. We invest heavily in educating our investors about our business, At DataSift, our board meets approximately every 6 weeks for 2 to 5 hours. Our decks are between 60-90 pages. This work is not all done for them. We use lots of slides from other meetings (Strategic Planning Meetings, Weekly 1:1, etc) so the actual amount of time we spend prepping for a meeting isn’t cumbersome. We find however that the ROI on the effort we make to bring together this information for our investors is great. We encourage our VCs to interact extensively with members of our team at all levels. Recently one of our VCs spent a bunch of time during an office visit walking the floor and asking great questions. Our VCs have passwords to our Salesforce account and key Dropbox folders. If your VC wants to know how Marketing and Sales are going, then invite them in for a 2 hour work session. We frequently send them articles and reports about the industry.
You Should Suck Your VCs Dry (Of Value). We look at our VCs as an extension of our team. Since we launched the company, they have provided tons of value because we have been pretty aggressive about asking for it. This includes everything from sourcing executive hires, reviewing pricing, connecting us with big customers and partners and more. Be specific about what you want. Ask early and often for value and you will get it.
Understanding Fund Dynamics Will Help Your VC Relationships. I’m constantly struck by how much the fund dynamics influences a VC’s perspectives. Is your VC at the beginning or end of a fund? Is your VC a senior person at the firm on the investment committee? Is your VC about to start fundraising? Has he just had a Massive Exit or failure? The more you understand about what’s going on in your VC’s worlds, the more deeply you will understand what motivates them.
Keep Your VCs Current. We do lots of different types of news monitoring at DataSift so we usually hear pretty quickly about any new developments in our industry. When something is big enough (like Salesforce acquiring Buddy Media) we often send a quick 3-4 sentence email to the board with our thoughts. I think this helps ensure that we’re on top of what’s going on.
I think picking VCs is as important as picking a founder or significant other. I’m hoping some of the tips above can help you find your “Jerry McGuires”.
The many victories the DataSift team has celebrated over the last year (big product launches, signing large new customers, etc) were often even sweeter because our VCs were celebrating along with us. In many cases, they were at least partly responsible for the points we had put up on the scoreboard.
I recently spent some time in Canada and was really impressed. I’d to share a few things that hit me most. I’m pretty slammed at work, so apologies I don’t present more stats to back up my anecdotal observations.
1. Canada Appears To A Lot Better Than The US at Supporting Tech Cos: The typical Canadian in the tech scene laughs at how much better their country is at supporting start-ups, and they are right. Here’s why:
- The Federal and Provincial governments support start-ups with grants and direct investment (the government of Ontario recently set up a $50M VC fund).
- The Canadian government seems a lot more supportive of providing visas and citizenship for high tech workers. I haven’t found good stats on this year, but when I was there I did hear the Canadian government had just achieved a 70% reduction in wait times for work visas for tech workers, which sounded pretty impressive.
- The Canadian government is placing a priority in what it calls “skills development”, and has set aside an additional $50M or up to $15k per person for skills development
- Several provinces like Ottawa have what look to be very aggressive trade commissions that aggressively reach out to US companies to establish relationships. Its sort of nuts that I’ve been contacted by two different Canadian provinces asking for DataSift to consider placing an office there, but no US states. I wonder how much a state like Michigan could get out of doing something like this.
- Looks like the ITAC industry association has also been very helpful to help promote the Canadian IT industry, which does more than $150B in revenue per year.
2. When one thinks of Social Media, one doesn’t think of Canada first. Yet some of the most impressive B2B companies in Social were all founded in Canada!
- Radian6: This company is based in the Eastern Canadian town of Fredericton, an unlikely place for a company to be founded that then got bought by Salesforce for hundreds of millions. This is no doubt a great testament to its founders, who allegedly hatched the idea for Radian6 at a Tim Horton’s, the Canadian equivalent of Dunkin’ Doughnuts.
- Hootsuite: I am constantly amazed with how much Hootsuite and its products have penetrated companies across a wide range of verticals. We use Hootsuite at DataSift and love it. They are based in Vancover. Interesting fact: Their company name was actually discovered during a crowdsourcing contest.
- Sysomos: This company doesn’t get as much attention in the US market at Radian6, but seems to be almost as big. Its owned by Marketwire and based out of Toronto and was originally spun out of a project at the University of Toronto. They are currently owned by Marketwire apparently.
Overall I found everyone I interacted with from tech entrepreneurs to cab drivers extremely friendly. I look forward to going back.
During this past holiday I was lucky enough to spend some time in Brazil. I’ve always loved how authors like Michael Lewis use “micro” observations to get unique insights into a country. After spending almost half my life living overseas, I’m always struck by how much “on the ground” experience in a country can be strikingly different than what is reported in the news or even official macro stats.
The official stats have the Brazilian growth slowing this year to the slowest rate in 10 years, with both stocks and investment plummeting. Read more here: http://buswk.co/Uy0n5i. My experience on the ground felt very different. Although I was only in two different parts of Brazil (Rio & the state of Santa Catarina in the south), I was amazed by a very wide range of signs of prosperity and how much progress Brazil seemed to be making even since the last time I was there in 2009.
1. There seems to be an exploding middle class. During my time in Brazil I saw tons of signs of a healthy middle class. Everyone seemed to have smart phones, including on the beach. (I even saw some kids during a tour of a slum using Blackberrys.) Restaurants and supermarkets were full everywhere that I could see. I was particularly amazed at how popular even pretty expensive sushi seemed to be with Brazilians in Ipanema and Leblon. (Somewhat less surprising when I remembered that the biggest Japanese city outside of Japan is actually Sao Paulo.) I went to an absolutely amazing sushi restaurant in Rio called Sushi Leblon that claimed to be booked solid for at least three weeks. Not something you see in a weak economy.
2. There appear to be have been significant decreases in crime. My friend Ben and I spent a week in Rio without incident. Probably the most striking sign of improved safety was the tour I took of Vidigal in Rio. 30 years ago when I lived in Rio as a kid I wouldn’t have taken a step into the favela, and this time I spent several hours there, accompanied only by one unarmed tour guide. The improved safety seems to be due to very aggressive policing by city, state and federal law enforcement. Truth be told, Our time in Florianopolis included one mugging of two of our friends who took a really expensive camera to the beach and got robbed unfortunately. The incident was a real bummer but in retrospect probably could have been avoided and could have happened anywhere.
3. Brazil’s wealth of natural resources sure doesn’t seem to be running out any time soon. I spent quite a while talking to a geologist from the Brazilian gas giant Petrobras who hinted pretty clearly there may be more petroleum finds on the way that could be as big as the Lula field (http://bit.ly/VIMyfM). I’m far from the first one to figure this out: http://on.wsj.com/106LaKU. Brazil’s bounty of natural resources is going to no doubt serve as one hell of an accelerant for deepening relations with China.
4. Brazilians are amazing entrepreneurs. During my stay I was blown away with the intelligence, creativity and passion of Brazilian entrepreneurs in all different walks of life. During my first night in Rio I spent an inspiring evening with the high quality of tech entrepreneurs I met while there, especially in Rio. They were everywhere: restaurants, cafes, on the beach.
The Internet isn’t just for the young entrepreneurs in Brazil. Our host in Jurere was a 60 year old retired school teacher and despite being a grandma, one of the most tenacious, hard working entrepreneurs I’ve seen in a long time, paying for her retirement with Airbnb rentals. Six years ago she bought herself a netbook and has built a little empire of vacation rentals, and spends more time on Twitter and Facebook than hipsters that fill Blue Bottle and Sightglass everyday. Its no surprise that Brazilian entrepreneurs have gone global. For example, Budweiser and Burger King are owned by a Jorge Paulo Lemann, the Brazilian founder Lojas Americanas.
5. If I had to say one negative thing, it would be that tourism infrastructure is sorely lacking. Rio’s airport is going through a massively overdue expansion (http://bit.ly/13cAc4u), but the airport itself felt unchanged from when I first visited it 30 years ago. My American Airlines departure flight back to Dallas was forced to board from some remote part of the tarmac even though it left at midnight. The Sao Paulo airport is a little nicer, but painfully far from the city, especially when traffic is heavy. I’ve been really shocked to see almost no developments/improvements of the hotels in the key Rio neighborhoods of Leblon, Ipanema and Copacabana with the one exception of the swanky (and crazy expensive) Fasano. (http://bit.ly/VMTKqI). To be clear, my issues were with the infrastructure—-all other aspects of the tourism experience (hospitality, good caipirinhas, etc was great.)
Overall I thoroughly enjoyed my trip to Brazil and so did my friends. The people were awesome, food was great and it was a pleasure to learn more about such a vibrant country. I can’t wait to go back.