Monthly Archives: June 2008

A Counter to RWW’s Analysis: LinkedIn’s keeping it simple

Bernard Lunn writes a useful analysis of the recent LinkedIn deal in ReadWriteWeb.  While I found it thorough and detailed, if I were to critique it, I’d say that it’s myopic and thus over-complicated.

Here’s what I mean.  First off, Bain Capital is a top, top tier private equity firm with over $50B in capital.  This sterling reputation implies a huge war chest–money which they need to put to work.  LinkedIn similarly, is a top tier tech firm, which while a start-up, has certainly reached a level of maturity that comes with a proven business model, revenue stream, and clear growth plan.

The question — why the linking of the two versus an IPO for LInkedIn–is pretty straight-forward, when you consider the broader context of markets today.

For starters, the markets stink with oil at $140 a barrell, repeatedly sour revelations from banks related to the credit crunch, and the dow hovering around 12K.  The coming election is having two additional  impacts which will likely last through the end of the year: (1) the Fed cannot shift rates, as there is too much political capital tied up in that; and (2) the markets expect Obama to win, he’s viewed as more negative for business, and the markets are figuring out how much worse right now.

In short, if public markets stink and will for a while, and you want/need the money to grow, then go elsewhere.  That’s what it looks like LinkedIn did.

Add to it the overhead of Sarbanes Oxley, and it’s no wonder LinkedIn went the Bain Capital route.  There are a ton of seasoned execs in big companies and recently public start-ups with whom I’ve spoken who can’t believe the headaches involved with Sarbanes Oxley.  It’s a mess.  For those of you in tech land dreaming of an IPO, beware (or be sure you have a rock solid CFO)–it’s painful.

For Bain Capital, the case is also pretty simple.  They’re going to want to put money to work.  The credit market turmoil is creating a ton of opportunity in buying stuff distressed and on the cheap.  (Bear Sterns e.g.)  That’s all well and good, but it’s hard to know where the bottom is with this distressed stuff (GMAC, e.g.)  Bain Cap’s model has seemed a little less chop-shoppy (buy cheap, fix, and flip) and tended to be more about helping franchises expand and extend their brands with ruthless efficiency.  Given Linked In’s premier brand status and position, and Reid Hoffman’s reputation as an execution madmand, and LI and BC are a great fit.

Rather than assess the state of what all this means for high tech and IPOs, etc., as Bernard does, I’d look at it more simply and optimisitically.  It’s terrific for Silicon Valley that a top tier company like LInked In could close a transaction like this with such a top tier private equity firm.  Maybe others will get more active.

That this deal wasn’t an IPO is a sign of a weak market and too stringent regulations–hopefully both will get fixed.  We need a rebound in the economy and a rewrite of SarbOx, in the coming window so that the rest of us start up guys may one day have a shot at a more open IPO window.

PS–for those with a more political bent on this, to get a more open IPO window will likely want to see oil at or below $100 / barrel.  It also will likely highly desire not having a “surge” in the capital gains and dividend taxes.

Multiple choice bonus question–the US Presidential candidate more likely to deliver lower oil and lower taxes and thus better financing conditions for tech and other companies is : John McCain or Barack Obama?

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Stanford Coach Jim Harbaugh: A Shining Example of What’s Great in the NCAA

Last night my family and I were grabbing an early dinner at the Creamery in Palo Alto.  At the adjacent table, hosting what looked to be a small recruiting dinner, was Stanford Head Football Coach Jim Harbaugh.  Now, as a lifelong Pittsburgh Steelers fan, I recognized him first and foremost as the quarterback who darn near ended the Steelers’ run to Super Bowl XXX in 1995.  He was a fierce, classy, and determined competitor then, and with Stanford’s defeat of USC last season, those traits obviously have remained.

Anyway, by coincidence, we were walking out to the parking lot at roughly the same time.  As I’ve got a 6 year old boy who’s gaining my love for Steelers football, I asked Coach Harbaugh if I could introduce him.  What struck me was that when I did this Coach Harbaugh was literally in his car.  He got out, said hello, and spoke to my wife, my kids and me for the better part of 10 minutes.  He invited us to a football game, and flat out could not have been more courteous.

Often I hear about how the money and the exposure in college sports has killed what’s great about the NCAA.  Coach Harbaugh is a great counter-example.

Thanks Coach Harbaugh, and go Cardinal in 2008-09!

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A new grad’s dilemma: start-up or bigco?

Last night I attended a social mixer in San Francisco, attended several hundred young professionals representing alums from a bunch of schools.  It was the first one of these I’d attended up in San Francisco, and it did a lot of good to reinforce several of the impressions we’ve had of the Bay Area during the first year we’ve lived here.  People were really welcoming, social, and friendly.  Relatively less attitude than you’d likely find elsewhere.

As I was mingling, I got into several conversations with current undergrads, grad students and recent alums, which tended towards a similar theme around career management.  Namely: should I go to a big company or join a start-up?

The thing I’ve noticed as I’ve spoken to people with this question and as I’ve read advice about this on blogs and so forth is that there’s this rather stark line that gets drawn.

The narrative here is familiar.  Generally parents and other stakeholders who might be more risk averse tend to advocate strongly for the BigCo.  They rightly see the benefits of getting a brand on the resume, having a stable income, and building out a set of contacts and useful skills and experiences.  That the parents have often footed a hefty bill to get the kid through school, this urge is understandable.

On the other end, there are a host of bloggers and advice givers who advocate strongly that the absolute best time to work at a start-up is right out of school.  You’re young, your burn-rate’s low, you’ll learn, and you can always go to a bigger company later.

This approach reminds me a lot more of this, and in my view does a real disservice to the individual trying to make some hard and important decisions in his or her life.

So what’s the right answer–which makes more sense for a hungry young professional bouncing out of undergrad, grad school, or even a few years at something like consulting?

The only logical answer with something as individualized as your personal carer path is: it totally depends.  Having worked both in a big enterprise (Microsoft) and now currently at a start-up, I’d say both have benefits and opportunities.   Both can benefit you at different points in our career.  And different people can find either optimal at different points in her career.

The real question then is what makes sense for the person right now?  What are the most important and useful question to answer when thinking through which approach makes more sense given where one individual is right now?  This is a classic ‘no answers, just more questions’ type of thing, but at the end of the day, there are too many individualized situational factors to give a straight up or down answer.

With that in mind, here’s my attempt at putting together the best questions I can think of that will help someone thinking about which direction to head.  I’m coming at this assuming you have considering approaching companies that may be large or start-ups.   Specifically, I’m writing this as though I had an offer from both types of firms and these would be the questions I’d try to parse as it related to my own individual career management.  If you’re not getting answers to these questions, I’d suggest you should.

  1. At which company will you have a greater opportunity to learn new, useful things? Basically, the point here is to get really specific and concrete about what you’ll be on track to learn or experience over the course of a period of time.  Big companies will generally be able to articulate this to some level of concreteness, but definitely drill in on them.  Talk to others who’ve been there for a year or two and get a sense of what they think they’ve learned.  In smaller companies, ask the same question and press on this.   Know that small companies are by definition more fluid and may be less specific.  Still, beware of leaders who roll their eyes and say ‘we’re on a rocketship–you’ll learn what it’s like to go to the moon!!!”  (Unless you’re talking to Facebook and about 3 other start-ups of that ilk.)  In general though, if the start-up guy you speak to can’t at least fake some concrete, articulate things you might learn, then he may well be a coconut.  Working for coconuts at big companies or small companies is no fun and not good for your career–avoid.
  2. Find out who you’d likely be working for and determine his/her track record on people development. People development is a vital task for both big company and small company leaders.  Understanding very specifically who the person is and what their value systems are as it pertains to managing people and developing talent.  Some start-ups and high tech companies will make the case that they’re growing too fast to deal with people development.  This is bogus–if you hear this case being made, I’d count that as a big red flag.  You may decide to still work there, but do it with eyes open.
  3. Determine which business you’re more likely to run yellow lights to get to in the morning. At the end of the day, to build a great career, you’ve got to build a great track record.  To build a great track record, you’ve got to pay the piper–you’ve got to work hard.  I’d argue that to do great things you’ve got to love what you do to put in the dedicated time and passion to make it happen.  Given
  4. that, then the gut check of which company or which opportunity gets you more fired up is a simple but super important factor to weigh.  You and only you can answer this question.  No blogger and no parent can really take this on

    4. Finally, in which opportunity will you have an opportunity to build out a useful network of people.   One thing that’s become apparent in my time an entrepreneur–your network is super important.  I’ve been pretty shocked at how many people have been in Silicon Valley for decades and who know relatively few people.  Given the loosely coupled nature of getting companies going and started, etc., having a broad group of people that can help connect you with ideas, talent, and is massively important.  While you’d think there’d be a stock answer here–advantage small company–I don’t think there is.  The fact is that people who work at networking, whereever they are, do better than people who don’t.  Now I’m not saying be a LinkedIn troll or whatever, but definitely pay attention to the sense of how you’ll build connections in a given organiation.
    So those are my 4 basic questions that I’d suggest you answer as you weigh which opportnity–start-up or big co you might head down.  There are obviously a host of other important, relevant question around job role, salary, location, etc., which I’m not going to touch.  My sense is that those are the questions and factors everyone weighs.  The ones above are in my mind the ones that can help you sift through the many good ideas that are out there on guiding your career and hlep you start to make a good and well reasoned decision that will meet your own best personal interest.
    Cheers, and if i can be of any help, please reach out at jeremiah.s.jamison [at] gmail [dot] com.

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    Disqus / WordPress Integration — Clear as Mud

    Yes, I’m getting onto the social media bandwagon, and I’m now blogging daily.  Oooh aaah.

    I’m finding indeed that commenting is also something I enjoy doing.

    In practice, I enjoy this blogging / commenting thing not so much because I’m all web 2.0 and whatever.  It’s way simpler–I find that writing helps me figure out what I think.  If I want to understand and process all that’s going on, for me, writing fits the bill.  To have all these great and easy tools to do that and engage with people is terrific.

    One such tool is Disqus.  I like Disqus–a lot of promise.  That said, I tried to get it to connect and integrate with my WordPress blog (this one) today.  I’ve read the instructions closely and I’ve looked at things pretty closely, and I’ve still got no sense of what the heck I’m supposed to do.

    Here are the directions.  That said, everything that’s supposed to be done on the WordPress Dashboard is nonsensical given the UI I see.

    Disqus instructions

    Any WordPressers who get the steps, and have more updated screenshots, I’d welcome any guidance.  Right now, Disqus is not integrated in my blog as I can’t figure out the directions. 😦

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    A Man in Full : Timothy J. Russert

    I was travelling to Las Vegas to meet my father- and brother-in-laws when I saw the news that Mr. Russert had passed. As I’ve started blogging, I’ve found it interesting to pause and reflect on the lives of people who’ve touched me. It helps me pay some little respect, and to clarfy in my mind some of my own thoughts on how and why certain people impact or teach me something.

    As a professional, Mr. Russert was the “gold standard” according to many. My behavior reflected this: Tim Russert hosted the only news program that I Tivo’d and watched every week. I would watch other news, but Meet the Press was must see TV. Others have reported how this occurred: his hard hitting, yet friendly approach.

    What I always loved about Mr. Russert’s show was his clear passion for the Buffalo Bills, literally his humanness. Few others in journalism match this. Others at the top of the heap–Stephanopolous, Koppel, Blitzer and even George Will are all tremendously talented political journalists, but none had anywhere near the human connection that Mr. Russert could bring.

    And this makes it all the more telling, I think. As many of us, I work hard and am trying to do big things at work. I also aim to be present and dialed in as a parent, son, and friend. A very hard balance, it’s one some claim is impossible to achieve.

    Timothy J. Russert is a great case in point that it can be achieved. We will miss you!

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    Don’t Be Surprised: Coca-Cola Builds Social Media Widget

    Last week, Kara Swisher in BoomTown wrote about how the big brands were not yet getting on board with social media.  I wrote then about how I expected big brands to step up and start experimenting, exploring how to use this new media, which is grabbing so many eyeballs, to build and reinforce their brands.

    This week, RWW reports on a smart play from Coca Cola, as if in some surprise–they titled it “A Smart Social Media Play From … Coca-Cola?”  There should be no surprise.  Coca-Cola, P&G, McDonalds–name whatever big brand you want–these companies will figure out social media. They all have an imperative to build and extend their brand and image within the minds of customers, and they all understand that where customers are spending time engaging, they need to be.

    History is not bad here.  For as long as there has been media of any sort, these brands have been figuring this stuff out.  When TV started, many thought that media was a crazy fad, and no advertisers would figure it out.

    So my core view is that big brands will figure out social media and it will become a vibrant channel for brand building, as I discussed in last week’s posting on this.

    The thing I’ve been thinking about since though is this… Will the economics of advertising spend be on the same scale as TV or other mainstream media today?  I am more skeptical.  Since I’ve moved to Silicon Valley, I’ve heard again and again how cheap it is to build engaging web experiences.  That’s cool.  But if you are an entrepreneur building one fo these cool engaging web experiences, and your model is advertising, then isn’t there a risk that the advertisers will realize taht they don’t need to spend millions of dollars to create cool advertising?

    When Tide makes a TV ad, they are going to spend a few million dollars, as TV commercial production just costs that much.  With a social media widget that Tide might make, will the costs really be on that scale?  I’m skeptical.  I think that some of the ease and speed of developing social media applications will provide opportunities for the big brand advertisers to look for cost savings and efficiencies.  My view here is that while big companies might be a little slow, they aren’t stupid, and they’re generally pretty good about wringing out costs, over time.

    It’ll be an interesting development to watch for sure, but don’t bet for a second that the big brands won’t start flocking to and figuring out the social media stuff and how they can use it to extend their brands.

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    Glassdoor’s Conundrum : Making Clear the Ad Revenue Model Challenge

    Tonight Glassdoor is coming out of stealth, and it is being reported / reviewed here and here.  Founded by the team that brought Zillow and Expedia, Glassdoor has a strong team and clear mission–bring transparency to salaries, management, and work environments.

    Now first off, as someone who submitted a review for my work at MSFT, and who has played around on the site, I think Glassdoor is a strong concept and it’s executed well.  At it’s core, Glassdoor is a super useful site.  It’s easy to see prospective hires, current employees and managers coming to use and rely on their stuff in a heartbeat.  Heck, when I was at MSFT, we used surveys like this all the time to work to suss out how things were going.  So Glassdoor’s great for users, no question.

    The question though is this: how will Glassdoor be great for advertisers, their stated model?  This is something I’m skeptical about.  While Glassdoor will get eyeballs, the issue is that they’ll get eyeballs that are highly motivated for the information they’re getting.  You’re not going to be able to get me tempted with the equivalent of a Lending Tree ad when I’m looking at Zillow when I’m looking at Glassdoor.

    It might be that they’ll make classified of specific jobs open, and then maybe that’s fine, but I view that as something of a stretch.  The reason I say this is that this information will be pretty personal–people will look at it and have a reaction.  They’ll want to learn more, they’ll click around to other comments and so on.  My personal sense is that as people get deeper into the great data and content that Glassdoor makes available, they’re going to be increasingly less interested in clicking on an ad.

    And this is what highlights the conundrum of ad revenue models in a Social Media world.  It seems to me that as we get more and more content that is stronger and stronger, its as if the content is getting more surgical.  I got to this site when I need this information, and only when I need this information.  When I am there, I’m not going to be easily distracted.  Thus I’m going to be a crumby advertising customer as I’m going to be focused in on whether I’m getting paid right or whether people think I’m a good manager or whatever.

    Alternatively, when I go to a site like LinkedIn, for example, I’m a little more flexible–I’ve got a bunch fo stuff I might be looking at.  What friends are up to, who has new connections, etc.  Here I’m wandering, I’m way more likely to go to an advertisement.

    I’ve talked before about the need for advertisers to innovate around social media and what that’s going to mean for big brands.  With very useful and surgically targeted data like Glassdoor, advertisers will gain great content and captivated eyeballs–it will be an interesting challenge to see whether these eyeballs can be harvested into viable advertising dollars.

    I wish Glassdoor the best with their service–it’s useful.  It’ll be interesting to watch how advertisers work with it.

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