The down market seems to be working in our favor. This probably isn’t going to news to some of you, but I thought I’d share a few random thoughts on this.

As a FOSS (Free, Open Source Solution) company, that also offers a cloud-based software-as-a-service option, we’re sorting through more deal opportunities than we can handle right now. We’re hiring based upon real growth … which is the ultimate barometer of any startup’s progression.

CIOs and other tech decision makers still have the same problems to solve within their organizations, they just don’t have a blank check book to work with anymore.  No one ever got fired for bringing in a Microsoft, Avaya, SAP, or any other market leader to implement a solution.  But if they can’t afford to do that, they can either look to a startup or smaller company for a solution, or postpone the project until the market gets better. Tech decision makers like to be heroes, so cater to that.  Give them a solution that makes sense to them in a down market. A down market is a GREAT time for an emerging company to secure a beachhead against established players.

So how do you cater to them in a down market?  I suppose there isn’t one correct answer – it will vary depending upon your business, but … here are some thought starters based on what we’re seeing.

Startups can be more agile and creative with pricing and infrastructure. You don’t have 25,000 mouths to feed.  Yet … You have a handful.  Be aggressive with pricing – don’t try to get your whole nut on your first deal or two.  Get creative. Options are limitless – per seat, per transaction, per CPU hour, etc.  Are those up-front professional services fees getting in the way of closing the deal?  Waive them, and incorporate them into a transaction fee where the customer can pay for them over time.

Make your solution solve a real problem. In this market, the checks are being written to solution providers who can truly offer an efficiency or savings (of either time or money, or hopefully both).  If you aren’t doing this, you probably won’t last in the enterprise space. Don’t make your internal champion go back and explain why his or her boss needs to write a check to you.  Instead, arm them so they go back and show how much time and money they’ll save by bringing you in AND how painless it will be to get started. Everyone wants an on-demand solution these days – the days of NIH are shrinking.

If your solution doesn’t really solve a problem – make it solve one.

Get the deal DONE (especially if it involves a reference customer). If you can do this, others will dial down their perceived risk of entrusting a critical function to a startup provider.  It could even be worth losing money on a deal like that if you know it will open other doors for you – plus it slows your burn or at least helps you get to breakeven.

Put it in the cloud. Hardware is now a commodity.  It is a lot easier and cheaper to build a cloud solution these days.  Blade server prices are down to incredibly advantageous levels.  And if you can’t or don’t want to do it yourself, check out Scalr.net, which has a fantastic interface around Amazon’s EC2 service.

Enterprise services are the “ultimate mashup”. If you are an enterprise services startup, and you can effectively add value somewhere in a chain of web services, you have a decent shot at surviving this “Great Correction” as I’m calling the current market – but you are going to have to get deals done outside of the box.

Would love to hear some other thoughts …

Cheers.

Our bizdev guy jockeying for the top spot.  FAIL!

I’ve been involved in no less than two dozen software or Internet-related launches in my career.  Having just finished the initial launch of StarPound, I thought I’d drop a few notes here about launching.  This post will ramble a bit, as I am still really decompressing from the launch.

I will preface this by saying that no matter how many times you’ve launched stuff, you will learn something new each time.  Embrace it!

The Launch Date

Putting a flag in the ground and declaring the date to the whole team is a big motivator, but it can be risky. But just do it. You can’t hit a date unless you first have a date to hit.  And your team has to have input and buy-off on that date.  It should be a stretch goal, otherwise, it is meaningless. 

If your engineers are telling you it will take 60 days, set an internal date of 45 days.  Get everyone motivated to hit that date.  If you are excited about things, they will, in turn, get excited about those things and will become superhuman during the last two weeks leading up to the launch.

But be careful about publishing your engineering date to the market …   You really need to know your engineering capabilities and what pitfalls might crop up ahead of the launch – otherwise, you could be setting yourself up for embarrassment.

And of course, don’t commit the whole team to a date and be “that guy” (or gal) that does’t do anything to  help them get there.  Which leads me into …

Don’t be Afraid to Get your Hands Dirty

If your the type of leader that likes to sit back and delegate, you shouldn’t have left your nice job at Bellsouth (unless you had no choice, of course).  Funny thing about people – they respond very well by being lead from the front, and not the rear.

Back when I was in the Army (under Reagan – sheesh I’m getting old) there was this one Lieutenant that all the guys wanted to serve under.  Young guy – green as hell – but he got his hands dirty.  He wasn’t above pitching in to get the job done.  Whatever it took.

When I arrived in Germany to my line unit in 1987, my new platoon sergeant has to break me in, so he dogged me and made me serve motor pool duty for a week – in the cold rain – scrubbing a whole fleet of original 105MM M1 tanks that were covered in mud (they had just come back from a big field exercise).  While the more veteran guys walked by me hazing me for being a new recruit, this Lieutenant walks up and asked me what I was doing. I told him.  He took his parka off, rolled up his sleeves and helped me wash every single tank on the line.  Most of the other officers were lame in comparison.  This guy gave a sh*t about his team, and we responded in kind.  We would have walked through the fire for that guy – and some of us did.

In any startup, people are expected to wear multiple hats, each and every day. 

If someone has a problem with that, you need to get rid of them – period – because they will kill you in the end, one way or another.  I recall one day a few weeks ago where my schedule roughly consisted of the following tasks:

• Morning status meeting with the whole team
• Writing PHP code for our new web site
• Biz Dev: meeting with a new Fortune 500 customer
• Meeting with potential investor
• Using Photoshop to create new buttons for our app
• Market research – then working on marketing packets
• Interview new sales guy

And this was just my schedule.  Other people had it much worse.  If you cannot willingly wear multiple hats, or  you don’t have the skills needed to wear multiple hats, you have already made your journey that much more difficult. If you really don’t have the skills to help out in other areas, make an effort to learn.  It’ll make you a better leader in so many ways.

In short – delegation is a fine skill to have, but you have to earn the right to use it, and you earn that right by leading from the front, not the rear.

Sales and Business Development

Don’t ignore the sales effort while you are prepping for the launch. You don’t want to wake up with a nice launch, and no one to show it to. If you aren’t balancing sales and business development calls with launch-related stuff, you are heading down a very slippery slope.  The technology dead pool is full of companies that blew their wad on great launches, but they ended up mostly being “all hat and no cattle.”

At the same time, don’t distract your engineers with too much sales support – they need to stay focused on the task at hand, which is getting product to market.  if you do need to tap your engineers for sales support, try to streamline their involvement as much as possible.  Do you really need to drag your whole development team into a pre-sales meeting?  How about just the CTO?  Another approach is to set aside a certain block of time each week that they can be available for sales support, rather than ad hoc’ing everything.

Patience.

People will miss things, so accept it now – certain tasks, even critical ones, can get lost in the noise. You’ve gotta stay on top of everything and everyone.  And guess what, you will miss things, too.  Get over it.

Your team’s level of motivation and attention to detail is going to have a fairly direct correlation to your ability to keep things moving forward, despite the cyclone spinning around you.

The 90% Solution

This is something I’ve espoused for a long time, and it is rarely more fitting than when you are trying to launch something new.  The 100% solution is never attainable – so forget about.  Strive for 90% and try to get that part right. The rest will come in time.

If you had a splitting migraine, would you pay someone for a pill that solved 90% of your pain, or are you willing to suffer in misery while they work on the pill that solves it all?

Cheers.

I foresaw it a year ago. Stephen Fleming eloquently described it today. Lance Weatherby posted a nice rundown, too. Ashish Mistry piled on as well. Former Earthlink PR exec now turned media blogger, Dan Greenfield, wrote a nice bit as well.

I was unable to attend Startup Riot as I came down with a nasty cold over the weekend, but from all I’ve heard, the event was another stepping stone for the Southeast. Kudos to Sanjay for stepping up and putting a lot of his time into the event. (StartupRiot Flickr stream here). Lance Weatherby posted a nice rundown of the companies that presented at StartupRiot as well – check ‘em out.

I think the smart kids leaving Atlanta to go ply their trades in Silicon Valley are going to eventually regret their move. Atlanta is back – and what we’re seeing now is merely the tip of the iceberg. As I was quoted saying in Dan Greenfield’s excellent piece – I think a year or two from now and Atlanta’s tech and startup scenes will be unrecognizable.

Now we have to sustain this momentum as a community. History is full of flashes in the proverbial pan. I, for one, don’t want to see it go down like that. And it won’t.
Our StartupLounge event tomorrow night will hopefully put a nice bow on what has been an incredible month for startups in Georgia. The event is full – unless you are a last minute investor who wants to attend – but you can read the details here. We’ve also posted new dates for CapitalLounge, AngelLounge, and PitchCamp …

BTW, congrats to SoloHealth – who just scored a new round of funding. They’ll be hanging out at our CapitalLounge event again tomorrow – so if you’re coming, be sure to congratulate Bart Foster and his team.

Yes, the storm is here. No, I mean really. As fitting as this sounds – as I write this draft, we are under a tornado warning. One just touched down a few miles from here.

See you on the bitstream …

Cheers.

For the past few years, Justin Rubner has been diligently covering the technology beat here in Atlanta. In particular, I found his coverage of the tech startup scene to be a positive thing for the community. Justin recently left the Chronicle and landed at The Content Factor. However, the Chronicle has yet to replace him, or to provide any sort of coverage of the tech scene at all.

A week or two ago, I emailed Ed at the Chronicle and asked a simple question: are you guys going to bring back the technology column? I’ve yet to receive a reply.

Edit/Update: I have heard through the grapevine that they do not have plans to bring the technology column back.

Atlanta is the most “wired” city in the world, according to Forbes Magazine (for the second year in a row). Money Magazine was quoted as saying that Atlanta has “a bustling community of Internet-related start-ups.” (thanks to Lance Weatherby for those 2 snippets). So why then does the Atlanta Business Chronicle forego technology coverage in order to continue to fill my driveway with piles of dead trees containing in-depth coverage of the real estate market (which we all know is tanking)? See Mike Blake’s recent presentation for some statistics on this …

Since TechLinks has evolved into a love fest for big company CIOs and sponsors, we have little-to-no traditional media coverage here (save for Tech Journal South, based out of RTP/Carolina, which tries to provide at least some coverage for us).

Come on guys … this is embarrassing. There is a whole new wave of technology players in Atlanta, and you are missing the boat. Then again, since most of us get our news online these days, maybe it doesn’t even really matter.

Cheers.

If you are an early-stage entrepreneur, and need help with your financial modeling, you can’t beat this deal.

Cheers.

Ok, I will confess that I am a process improvement fanatic. I suppose it has something to do with my experiences early in my career working in a TQM environment at TSYS, and working with a key customer (AT&T Universal Card Services) to win the Malcolm Baldrige Quality Award. In reality, though, it probably has more to do with my desire to create “well-oiled machines” and tinker with numbers.

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Okay, I’m not ashamed to admit it. I’ve been listening (and watching) to Prince since the late 1970s – long before Purple Rain. Obviously, he has come a long way in his career since those early days. Sure, there was the wacky time where he changed his name to a symbol in a public protest against his record company, but his career as an artist speaks for itself. But Prince has now become a full-fledged marketing idiot.

He clearly doesn’t understand the importance of viral buzz and community around a brand – at one point, I thought he did. You may recall that Prince was originally one of the pioneers of online music distribution. Sure, he has a brand now, but the public relations backslash from his latest move will surely tarnish his brand considerably – it seems it already has. Several fan sites are now displaying a few “not so polite” symbols of their own.

Prince shouldn’t be suing his fans for using his images and lyrics on their personal fan sites. Instead, he should help them by providing them with images and content that they can mash up.

As an example of this in action, take a look at most any successful video game. Check the official web site for the game – more often than not, you’ll find a link to a pre-prepared “fan site kit”, which provides all the images and other branding materials necessary to kickstart your own fan site.

There are reasons why the video game industry is now bigger than Hollywood (in revenues). One of those reasons should be pretty obvious to you by now.

Advice to startups: embrace change, and embrace your customers. Extend your brand in every conceivable way possible, even if it means giving away some content to spread the love. Help them help you.

Cheers.