Buying Software in this Economy


In spite of the delayed affect this economy seems to be having on technology, investors have no doubt, hence the market reaction. What does this mean for customers? What should one do differently when buying software? Part of my focus here is on Enterprise 2.0 and Web 2.0 software, but the advice generally applies.

Here are 5 tips for those buying during a weak economy…

1. Be a Cheap Bastard

Regardless of the economy, I come to the table biased: Software is generally way too expensive. Now, any bias doesn’t matter. Customers, who have budgets, will have greater buying power.

This is a story that repeats itself: Eighteen months ago the CEO of a new search technology start-up demoed his product to me. When I asked how much he would charge, he responded, “As much as possible.” This is a behavior that is commonplace; it is rooted in hiring expensive sales people and meeting unrealistic investor expectations. Today, this fellow would not get funding. Today, his VC would tell him to lower his prices and try a new marketing strategy.

Ingrained behaviors in enterprise software companies don’t die easily, so look for software where the value is compelling. This software may be all your CFO supports in the next year.

2. Focus on Project Teams and Content

(This is where I piss off the social media and Web 2.0 crowd)
. In the Enterprise 2.0 software space, a lot is made of social networking. Andrew McAfee‘s definition of Enterprise 2.0 includes the word “social”. Yet when times get tough, the core work is all we’ll care about because we’ll have fewer people to do the work. The core work is not my social network, it is my project, and the content we build every day. By core, I mean: what I need 90% of the day that leads to a real outcome.

Ned Lerner of Sony Playstation said something interesting at Enterprise 2.0 in Boston last June, he said, “We don’t worry about getting the next person motivated to join the large corporate social network, we worry about great tools for our project teams.” He focuses on how to make his projects productive.

When the chips are down and budgets are low, this type of practical thinking will dominate, because all CIOs and CFOs will care about is whether or not a tool really increases productivity, and helps the next high priority project.

It’s not that the social aspects of this new software are useless. Quite the contrary. It’s that the Doubting Eyes of Skeptics in your company will glaze over if you trumpet the personal pages and social connections in this wonderful new software. Your ability to search on who uses certain tags won’t get people jumping up and down.

As an example, you instead should be demonstrating how project teams can produce documentation for customers on the web site without any expensive software, and (if you like) customers will be able comment on it, or (if you like) edit and improve it. The difference is the focus on content.

3. Focus on Killer Apps – Obviously Useful Tools.

Email and Word processing are considered killer apps because their benefit is obvious and they spread rapidly. Obviously Useful Tools don’t need a Return on Investment (ROI) analysis. They don’t need a seminar on adoption. A $100K piece of traditional enterprise software rarely is a killer app because adoption invariably requires considerable work: convincing users, training, roll-out projects, and the Famous Dreaded ROI Study.

Blogs have been so popular, they are a killer app. I would classify blogging as a Tier Two Killer App simply because they are nowhere near as pervasive as say, office apps. Nonetheless, blogging has proved an extremely useful communication vehicle.

Wikis also earn this distinction. Thousands of people in companies are now using wikis, without training courses, management edicts, and ROI studies. The value wikis play in communities, collaboration, and knowledge capture is clear.

A practical test: ask how concrete or vague is the description of the software. I still don’t know what a Collaboration Platform really is, let alone a Scalable Enterprise one. If a vendor concentrates on the concrete usefulness at a tool level, then you have a) a better chance of understanding it, and b) eliminated a blizzard of marketing bullshit.

If one takes as a given that securing a new budget for a large software purchase will be hard for many CFOs to swallow in this economy, then concentrating on inexpensive, highly useful tools is the way to go.

4. Ask the Vendor a lot of Hard Questions

Although Oracle’s financial strength won’t be doubted, half or more of Silicon Valley should be. VCs take enormous risks, but is your CFO interested in this type of risk right now?

I am not advocating shutting out small companies. Instead, if you focus on truly useful tools (Tip #3) and you are a Cheap Bastard (Tip #1), then you are most of the way home here. How much can you lose on a $1,000 or 3,000 system?

Still, ask hard questions about the company’s performance and about their approach to doing business. How transparent are they? Transparency removes doubt about with whom you’re dealing. The honest, open small vendor with a useful, inexpensive tool might serve you better than the (seemingly) safe, expensive, traditional, Cloaked-in-Confidential-Price-Lists traditional vendor.

5. Did I say: Be a Cheap Bastard?

Oh yeah, in case I forgot. Now’s a good time to be a World-Class Tightwad. I spend time regularly in Sydney and Amsterdam, homes of the Dutch and Australians, both world renowned for seeking value (I am being polite). Right now, make a practical Dutchman your role model when you belly up to the Software Bar. Cheers.

Why Obama Won the Election

2008 Election Results AKA Jeffrey's View of the World

2008 Election Results - the Growing Democratic Possibility

I voted today in California using my absentee ballot because I am headed for Europe and will miss the election. Absentee voters sometimes think they are not counted on election day. This is a myth. Because I am missing the celebration, I am declaring the results now, two weeks in advance of Election Day.

 
The election is over for a five glaring reasons:

1. The War – Barack Obama beat Hillary Clinton largely because of one issue: he voted against the war. He has singularly differentiated himself, and against McCain, it is a more stark difference.

2. Change – McCain is the Faux-Maverick. Both the mavericks in both parties won their nominations, an encouraging fact. That signals the electorate wants change. The problem for McCain is Obama owns the Change mantra, and has proven in the Campaign Death March, he means it.

3. Sarah Palin – is an embarrassment. Most Americans think Bush has done enough damage, and it’s time for strong leadership. Palin represents another poorly prepared politician who will need to be propped up by advisors. McCain blew this Big Time. This weekend, my die-hard Repulican brother-in-law said he was changing to Obama because of Palin. This man was recently worried about Obama’s relationship with Reverend Wright and his strength on terrorism. Palin trumps all these issues. She is not a statesperson deserving of high office.

4. The Economy – Warren Buffet supports Barack. Game over. Buffet is not just esteemed as a brilliant investor. He is one of the few trusted financial figures in this unstable economy.

At a large dinner in Silicon Valley filled with hundreds of venture capitalists and financial people at a swank country club last week, one of the smartest VCs I know said, “Invest in Buffet’s company. Don’t buy GE. Don’t buy Goldman Sachs. Regardless of their price right now.” Here’s a man in a room full of folks who might often fall for the No-Taxes-Republican-Head-Fake. Not this time (as Obama often says). This room of financiers was full of Buffet and Obama supporters.

5. International Leadership – I have yet to meet one person overseas, in numerous trips, who likes George Bush and supports the war. Who cares? These people don’t vote here? In fact, this is telling. America sometimes ignores common international logic, but the preponderance of international support for a different direction says a lot about where our country needs to go. Leaders in this country want to re-establish the country globally; these leaders largely support Obama.

The War, Change, Sarah Palin, The Economy, and International leadership. These are the glaring reasons Obama won.

He won’t win of course unless every one of you American readers gets to the polls and makes your vote count. I have had a dream for some time: that Obama beats McCain decisively by a minimum of eight percentage points, that he wins states like North Carolina and turns the Democratic vote into a wider base, that the election is a clear signal to Change. We need every vote cast. This is the best opportunity we have had since Kennedy to have a Real Leader.

McCain will not win. Not this time.

The Secret Ingredient to Blogs?

(Warning: This ingredient may not be for every blogger.) The ingredient is mixing business and personal issues. Right off the bat, this flies in the face of accepted Public Relations rules. But, the more personal and authentic a blogger can be, the more readers will believe a blog. Why do I say this?

I was honored to have Christine Kent of Ragan’s Media Relations Report cover my story of cancer in this blog. She asked me if there was any upside to executives talking about personal issues in their blog. My response was, “if executives blog honestly and passionately about something personal, there’s no need to figure out if there’s a corporate upside or downside.” The question is not about upside; it should be about authenticity.

People are sick and tired of all the media relations filters. One principle problem with our US Presidential Campaign Death March is everything is filtered down to pablum. No surprise: the one moment Hillary Clinton got emotional in public, the media treated her more positively for her authenticity.

The majority of advice on writing good blogs is keep it short, be punchy, be pithy, be controversial, and the like. While most of this is reasonable advice, speaking from the heart trumps most of this. My longest blogs are my most well read. Another popular piece of advice is have a clear theme or subject for your blogs. Again, I stumbled on mixing business and personal issues at the risk of being scattered, yet today a woman who is a volunteer for Livestrong told me in an email, “I love that it’s corporate and personal at the same time: it’s you. In my work… I have proposed launching blogs with the same natural style. Now I have a good example to show my Board of Directors.” Lesson: Do not obey all the rules. Make your own.

But why mix business and personal issues? Well, it’s not for everyone as I warned at the start. I told Christine Kent it’s Steve Jobs’ business if he wishes to talk about his personal life. Also, the rules are different for public companies.

If you can mix the two, you open the opportunity of showing more passion, more heart, more transparency, and then all that Often Boring Business stuff just might have a chance of being a little more interesting.

Is Agile Development Only for Nerds?

Eskander Matta

Eskander Matta

This man says, “No.” So what? He may look a little nerdy but he is a Senior Vice President at Wells Fargo Bank and using agile development techniques, he has dramatically reduced the time to develop new products for Wells Fargo’s online business.

 
What’s the big deal? Eskander Matta is not a software developer, and he is not in the IT department. Eskander is a banking executive, with a Harvard MBA, who thinks traditional development methodologies are impediments to building new online products faster and better. Eskander believes, “There is so much innovation in Financial Services that speed to market is critical. A lengthy linear process inhibits one’s ability to compete.”

Eighteen months ago, Eskander got a group of bank employees together to take a meat cleaver to a development cycle that had 26 artifacts (think: pieces of documentation). His goal was to remove all artifacts that had no downstream consumer. “If no one is going to read it, then get rid of it”, he asked the team. The team whacked the process down to 5 artifacts. Then equally important, all this was enabled with a wiki.

As is most often the case, Eskander, the business guy, asked the IT dept what wiki to use. The IT guys told him to use Confluence.

By underpinning everything with the wiki, communication and interaction between people was enabled. “If the wiki was a static word document, it wouldn’t have worked”, Eskander points out. The wiki enabled collaboration in a more formal sense.

What’s so interesting is…

  • A business executive took the leadership to streamline development using Agile Development concepts.
  • The outcome was fantastic: 26 development artifacts reduced to 5.
  • The result ended up on one collaborative work space on a wiki.
  • All this was in service of a major bank producing new online products faster.

Granted, Financial Services is largely an information business, this sector is the biggest spender on IT, and in this instance, the product was the Internet. Yet, this story is compelling evidence that there are other executives out there who understand what technology can do, who seek best practices like Agile Development, and who seek out the newest collaborative technologies.

I Remember Hayward

I never thought I would write an obituary on my blog, but then I never thought I would write about cancer. Last week, my dear friend since 1964, Buzz, or formally, Hayward Sylvester Blackledge III died at 56. This is my eulogy for the wake today. In tribute to Hayward, I have interspersed album covers I made up to honor this wonderful jazz musician.

I remember my first impression of this skinny, tall kid in 1964 from the West side of Providence. He seemed so young at 13 but so self-assured, particularly about girls. I had a dance party that year at my house and I knew then that Buzzy had something special with the girls, and I should pay very, very close attention.

When I remember Buzz, I think of when we played with the Fowler brothers band, the Soul Sounds and wore matching blue satin shirts, and did steps. We practiced in the Baptist church on the West side of Providence. It was 1966. The black kids in the neighborhood would come into the church and ask, “Why is that white guy playing in this band?” and Buzz would always defend me. Buzzy’s favorite tune was “Cold Sweat” because it was all about the drum part.

I remember when he came into my house on Olney Street one day so excited to play a new record, something he did very frequently, but this time was special. He put a new album on my record player, and he played “Fire” off the first album of Jimi Hendrix. I keenly remember he did not play “Purple Haze”, because “Fire” was a drummer’s tune. He announced we were going to see Hendrix at Brown University, which we did March 8, 1968.

When I remember Buzz, I remember all the times we would stay up until the morning listening to music. Hayward introduced me to jazz, and we would listen to Roland Kirk and Ahmad Jamal and Horace Silver all night long. We would want to play and I would take out my guitar, and Hayward would get some pots out of the kitchen and use them as bongos. We played until we were so sore.

When I remember Buzz, I think of all the concerts and music we took each other to over the years. He took me to all three Hendrix concerts in Providence – once with counterfeit tickets that cost $8 – but we got in. I remember all the music at the Newport Jazz festival we went to. I remember going to the old Jazz Workshop in Boston with him. But then I remember when he played the Jazz workshop with Victor Brasil and Buzzy was playing at an incredible level. I was so proud of Buzz.

When I remember Buzz, I remember living with him in 1981. He let me move in for several months when I was having girlfriend problems, about which he was much wiser. I remember his cooking. His signature dish was a slow cooked lamb with allspice. I had never seen someone be so patient to cook something for so long, and then when he ate it, he ate it slowly. I gobbled it up, it was so good. But Hayward could out-slow-eat anyone on the planet. He would push his dish away half eaten and you would find him at one in the morning nibbling on a few more spoonfuls.

When I remember Buzz, I remember his years obsessed with clothes. So many clothes, his closets were full and he had racks of them hanging in his Cambridge apartment. He took me shopping for platform shoes and flowered shirts, and he convinced me to buy platform sandals with 4-inch heels and a pair of High black boots with 3-inch yellow heels and a yellow stripe up the side. Hayward, I still have those boots, but I will never ever be as cool or as hip as you were then.

When I remember Hayward, I remember my best man. I think of him playing at my wedding, and coming together with my musician friends from college and later in life. He looked so handsome. He played with finesse. He was so excited about playing with my accomplished friend Dan Siegel. I will cherish that last time I played with Hayward forever.

When I remember Hayward, I think of all the times we never thought Hayward would live to be 56. Hayward lived on the edge, and he scared us many times. But then something happened. What changed everything was this woman Angela came into his life. For the first time Hayward settled down. For the first Hayward had peace. Hayward adored Angela and was enveloped by this incredible, warm, wonderful woman who had so much love for him. Angela is why Hayward made it so far and had a great life, a life we can all honor now.

I remember Hayward.

Starting a New Chapter in Atlassian History: Amsterdam

The new Limited Edition Atlassian Old Dutch bicycle seen on the canals of Amsterdam this week.

The new Limited Edition Atlassian Old Dutch bicycle seen on the canals of Amsterdam this week.

Opening a new office in our business is a special moment. It’s that chance to relive a start-up and the Primal Basics. Atlassian B.V. is official. We have leased an incredible new office on the Herengracht (Gentlemen’s canal) in Amsterdam. Just last year I snapped a picture of Herengracht the day of our first Amsterdam User Group a few meters from the pic above, in front of Atlassian’s new European headquarters.

Why this office? We’re here because European customers, who represent 35% of our business have been asking us for support and more direct access. We’re in the Netherlands because we found it to be a good tech community, centrally located in Europe, with outstanding language skills. Amazingly the Netherlands is our 6th largest country in sales.

And so, if you wish to work here…

Just down from Leliegracht, the new Atlassian location.

Just down from Leliegracht, the new Atlassian location.


… we’re hiring in Amsterdam right now.

Here’s a complete view of the new office, the neighborhood, and our time last week setting things up.

Josh love IKEA

Josh loves IKEA

We’re lucky to have two employees already in Amsterdam. Joshua Wold, who runs our worldwide team of sales engineers moved to the Netherlands, and in addition to screwing together new furniture and hooking up phones, he’s eager to meet folks in the local community.

To head up our European technical support team, Sherali Karimov, one of our senior developers and team leads in Sydney has agreed to relocate. Just Friday he arrived with his family ready for a new adventure in Amsterdam.

Sherali fresh off the plane from Sydney

Sherali fresh off the plane from Sydney

These mates are looking for some great technical support engineers, sales engineers, someone to head up our European channel business, and a customer service specialist who can also help out with the office administration. We love referrals.

Josh and Sherali are looking for people who want to build the next great Atlassian office and chart a new path in Europe. We’re looking for people who love building things from scratch. You might have to screw your desk together, but then, it’s your desk!

We’re looking for people who want to look out this window at Herengracht 124 – 128 and start the next chapter…
The view from the 4th floor

The view from the 4th floor

Tips on Recruiting Executives Part II [On Atlassian]

Daniel Freeman who runs product marketing and Jay Simons, new head of marketing, chatting with Mike Cannon-Brookes (back) in our new SF office. That’s Jay’s weimaraner named Sydney, also a great API developer.

In May, we completed the search for a vice president marketing which I wrote about last year. I promised to blog about the search when it was done, so here’s Part II on tips for recruiting executives and senior people.

1. The best candidates are referred by friends.

Our new head of marketing Jay Simons was referred by Kathleen Reidy of the 451 Group, a really bright industry analyst I had the pleasure of meeting last year. Analysts can be a great source of information because they frequently get briefed. James Governor of Red Monk gave me advice more than once.

VC’s are another good source. Some are protective of their network, so it helps to have good relationships. A VC we trust referred our director of product marketing Daniel.

All but one of our best candidates came from referrals. One came through Linkedin. Your network matters, but it requires more than blasting referral emails out to hundreds of people.

2. Use Linkedin as chum.

Think of Linkedin as a big bucket of fish heads, or chum. Chumming is when you throw a big bucket of fish heads and guts in the water to attract fish to your boat. You probably won’t find the candidate through Linkedin, but it’s a great way to announce your intentions. Kathleen Reidy learned of our intentions through my Linkedin email blast.

We received 50-75 resumes for each ad. The problem is filtering these is rough: marketing people are Pro Bullshit Throwers, and their resumes look very professional. Reading these resumes requires a healthy dose of Mike Cannon-Brookes-style skepticism.

I targeted a few candidates by doing People Searches on Linkedin and sending blind emails. I targeted some companies that were in transition. Always be thinking of companies who might be going through a transition. Coincidentally Jay came from BEA/Plumtree, which was being eaten by Oracle. Munch Munch.

3. Best athlete trumps best functional fit.

It’s easy to get wrapped around the axle about candidates meeting all the tick boxes on your list. Silicon Valley executive headhunters can be obsessed with candidates meeting every functional requirement, and to a fault. One problem with executive search is that because they get paid so much, they have to do this to earn their pay. Within reason, of course, you don’t.

The best candidates were not necessarily the best on paper, and did not meet every wish we had. For example, at Atlassian finding business people who have experience with highly technical products like our developer tools is tough.

An analogy is when an American football team goes into a draft looking for a Tight End [Tall guy that can catch passes and run short routes]. If presented with a top athlete in another position and who could be a game-changer, it may be foolhardy to pass. Coincidentally we ended up hiring the youngest of all the best candidates.

4. Interview intensely and spend considerable time.

You can’t spend too much time interviewing key hires. I sat down with the best candidates three times or more. Once I interviewed for a CEO job in a six-on-one interview format that lasted over two and a half hours; CEOs should be able to handle this. Any critical hire should. We interviewed one candidate three-on-one in Sydney.

In another case, Daniel who now runs our product marketing took three of us through a case study of another company to determine any lessons for Atlassian. Not a typical interview format, yet a great way to learn how someone thinks.

5. Source your own references, and get the most senior ones.

Find out who were the VCs on the person’s board at his or her last company. Always ask to talk to the CEO. Board members and CEOs tend not to suffer fools. Start checking as soon as you start to like a candidate, while carefully observing the person’s confidentiality. This may mean checking former execs at the company, or someone you know and trust. If the person is in a senior business role, find out what the senior engineers thought of the person. Good business people should command the respect of technical staff.

6. Always have an executive search backup.

There’s a reason why VC firms use executive recruiters. They don’t want to waste time. If you find yourself wasting time, be ready to hire a strong executive recruiter. I had one on alert from the start.