I sat very near the front for the early talks and I checked out the folks at the so-called "media" tables. They didn't look like they were banging out too many articles on the event or even taking notes. That's why I take these events seriously. Silicon Valley can always count on Alfidi Capital to pay attention when everyone else is falling down on the job. Slackers checking email and Facebook can hang out somewhere besides the media table.
The CEO of Box is quite a charming fellow. His cloudy socks and bright sneakers reminded me of Marc Benioff's fancy high-tops at Dreamforce 2013. Cloud entrepreneurs have a thing for wild wardrobes. Box is convinced that the addressable market for mobile information workers is larger than the market for people chained to a desktop. They have tailored their cloud enterprise offerings accordingly. I think Dropbox is an obvious competitor, but when I heard Dropbox's CEO discuss his company with Marc Benioff at Dreamforce 2013 I don't recall whether he spent a lot of time emphasizing mobile. These two box-related companies are going to fight it out over enterprise sharing.
Entrepreneurs also have a thing for wild stunts. Box's SVP for development came out to chat up their ability to connect the enterprise to all kinds of things. Lo and behold, Skycatch flew a drone out to the strains of Darth Vader's theme music and took a digital image of the audience. Drones now have an undeniable cool factor. The drone is in the photo just above. I was impressed that it could navigate the confined space of those curtains adjoining the stage without becoming unstable. Photos come with metadata that Box aims to capture. Image metadata has obvious uses in GIS for identifying frequent locations of system failures, sales calls, and other things that will drive enterprise revenue and costs.
Entrepreneurs can capture a few more lessons from Box's success than the implications of image metadata in GIS. Sales is still the most important traction metric, but efforts to grow a startup's numbers of third party developers, API downloads, and SDK uses are worth doing if they drive some buzz. Even page loads and white paper downloads generate metrics for startups desperate to hang their hat on something. Cloud platform providers should also think about having more than one pricing model. Pay per user (accommodates seat count changes), pay per time (accommodates seasonal surges), and pay per capacity (accommodates an expanding enterprise) all have their place somewhere.
The fireside chat with legendary tech star Ben Horowitz gifted the audience a free copy of his book The Hard Thing About Hard Things. I have to love a show that gives me both free food and free books. Ben liked Intel's approach to growing its market beyond memory. I did not know that the "cloud" term came from Bell Labs' technical descriptions of telecom connections. I thought some marketing pros dreamed it up. Ben's favored technique for a package software company (read Microsoft) to turn itself into a cloud service company (read Salesforce) is to acquire a cloud startup and promote that startup's founder to CEO of the acquirer. I don't know of any case where that succeeded, which is probably why Ben thinks such a transformation is so hard. I was very disappointed to hear that Ben was bullish on Bitcoin. His VC firm Andreessen Horowitz is making big bets on Bitcoin. I'm pretty sure they're going to lose it all, but I won't guess about the timetable.
Palantir's founder got some stage time with one of the hottest female tech journalists I've ever seen. War stories about PayPal are part of Silicon Valley's lore. I was more intrigued by the guy's pro-market opposition to rent control and desire to unskew the asymmetrically high compensation in the finance sector. This wasn't the first time I've heard entrepreneurs warn that large firms use regulatory capture to make business hard for startups. I wish I could get as excited as him about AI and VR but those things have been five years away for the last twenty years. The hype about AI and VR reminds me of the perpetual hype for nuclear fusion. It keeps the research money spigot stuck in the on position with no commercial success stories.
The VC panel tried to make some five year predictions for mobile, VR, and other enterprise tech but I don't think they got any farther into probable successes than the Palantir guy. They did make a worthwhile observation about how SaaS contracts favor short-duration pilot terms with cancellation options. That goes back to my own thoughts above about having a diverse pricing model. One client that cancels a short contract is welcome to consider a surge capacity contract. These VCs claimed that some startup types cluster in certain cities. That's true in niche sectors like agriculture, which is so far clustered in Northern California. I've noticed that many mobile and social startups pop up in all the big cities.
I don't think these VCs have many blind spots. They ought to see the disruption potential in capital-intensive verticals with long sales cycles. Startups can capture that by breaking up SaaS sales packages into piecemeal iterations. Salesforce did that with functional modules. Go back to my pricing model notes above and figure out where to start. The "grow fast" go-to-market strategy of consumer SaaS is not the same as the enterprise SaaS strategy of proving speed and agility in overcoming friction. The panelist VCs know this and startups should know it before they design for one market at the exclusion of another. The VCs measure the density of a SaaS solution's network connections by stickiness, virality, symmetry, and intraenterprise strength. In plain English, that means enterprise SaaS is more likely succeed with very dense connections that encourage KM collaboration. Know your monthly recurring revenue (MRR) and its churn before you pitch a VC, and don't pitch standing up when the VC asks for a sit-down conversation. The venture investing community can be finicky. I know they read my blog.
The CIO panel repeated a lot of things I've heard before at tech conferences. Every IT leader wants to jump on the innovation bandwagon because running a cost center is a career dead end. I did not know that the security landscape is evolving faster than the rest of the tech sector. Maybe all of the warnings about app security are finally turning into action. This poses good career opportunities for white hat hackers who can find and plug security holes.
Jerry Yang moderated the CEO panel. The other CEOs on the panel sounded like they really grok CustDev. They should get along well with the earlier CIOs who said they like startups that solve problems. These CEOs admonished the crowd not to sell something they don't already have; apparently a lot of techies need to be told that only established companies can announce vaporware. Their descriptions of reward systems that incentivize adherence to company values reminded me of things I've blogged before about corporate cultures. Folks need to know that the CEO's personality and the HR compensation structure will determine everything. That's Alfidi Capital wisdom. I agree with the CEOs that their job is to tell employees they're doing a good job, and that no one will tell the CEO whether they're effective. That is why KPIs tell CEOs whether they're succeeding.
I gave Jerry Yang a thumbs up as he walked out of the Fort Mason Pavilion after his panel. He's the one on the left in the photo above. I will always be grateful for his second stint running Yahoo because his resistance to Microsoft's buyout offer in 2008 opened a decent arbitrage opportunity for me. I made some money on the differential between the two companies' short-duration options even though the merger deal wasn't consummated. Thanks, Jerry.
The final fireside chat between legends Phil Libin and Steven Sinofsky was the stuff of legend. Techie culture supposedly encourages internal teams to borrow each others' ideas during the SDLC, but I wonder how many companies practice what they preach. Phil said in no uncertain terms that Evernote employees who make PowerPoint slides are unwelcome. That is stunning, and awesome. He correctly places slides in their sales role because he wants a higher cognitive model for engaging teamwork. His vision for workflows that transition seamlessly between mobile and desktop is the kind of sea change forcing packaged software sellers to move their products to the cloud. I do not agree with his prediction that the touchscreen interface will replace the keyboard/mouse setup simply because it's more comfortable for natural human hand movements. Knowledge workers still need to input data somehow and touchpad reticles can't do the whole job. Let me summarize this conversation's brilliant closer, driven by Facebook's acquisition of Oculus Rift: "Oculus is something you put on your FACE. It was bought by a company called FACE-book. We'll see thing like Box-FACE in the future." That had the audience rolling. Great stuff. You had to be there to see tech genius at work.
I have no idea what Box's platform does for clients. They put on a really high-powered developer conference where I scored free food and wisdom. Their CEO can mount a stage at a running leap, so maybe he ran track in high school. They should hold a hackathon at their next conference to motivate developers to build Box stuff. I'm impressed enough with everything to return next time.