January 29, 2013
This is the first of a series of occasional blogs whose main purpose is to make other people very rich. I mean, heck, I’ve got enough, or at least I would have enough if my family couldn’t read the word “Sale,” in department stores.
So how can YOU get rich from my idea. Build an app that does it. I explain how the app works, and you go ahead and do it.
This first idea is pretty simple, but the app might be hard to build. That’s OK. You don’t usually get rich without talent.
The idea is to take advantage of something we’ve all observed: that management slows projects down. Not deliberately, mind you; usually, they want to speed things up. But all those gates and calendars and (with top, top management) staff that surround management make it a big production just to get hold of these guys. (And it’s usually “guys,” I’m sorry to say.)
Now this makes no sense at all, if you think about it from the enterprise’s point of view. A team of busy, talented people who are being productive should never, ever wait around twiddling their thumbs for weeks until it’s time for their half-hour with the boss, who will usually make a decision in a split-second.
Bosses don’t like it either.
So what I propose is an app–or really, a series of apps, which I’ll call “unscheduling” apps. They’re designed to short-circuit, circumvent, avoid, get rid of as much of the ceremony and delay associated with decision-making as is possible.
I believe that small, simple apps that make incremental improvements are always better, so let me give you a few examples of what I mean, all of which are indeed very small improvements.
** Da De-Delayer: Your Table’s Ready, Sir. You know the problem. That really great executive just happens to be running late. Everybody else’s schedule gets thrown off. So do for busy executives what many restaurants already do for their patrons: send them an alert when their meeting is actually about to start. In the meantime, all those people waiting can do something productive.
** Da Agendifier. Make it possible for the people who are asking for the meeting to put two lines or so right in the calendar that says what question is being asked or what decision is being asked for. This has to be readable at a glance. As with Twitter, only giving people 140 characters makes for a needed concision.
** Da Snooperintendent. Back in the days when people were co-located, managers would drop in from time to time and a lot of stuff would get settled. Nowadays, that isn’t possible. Your manager is in Bangalore or someplace and aint’ dropping in any time soon. So give the manager a virtual place where they can drop in and say hello and sniff around. The group that’s working on something would keep a live description of what’s going on Now: what people are working on, questions that are coming up, issues. Next to each notation would be a presence indicator for each of the people involved. The manager would be able to drop in at any time, then be able to send messages or, if they were present, videoconference the people involved.
Da De-Synchronizer. Meetings, which require synchronous communication, are much more expensive than a chat or e-mail exchange, which are asynchronous. So give people who want to talk to a busy executive a choice of two schedules, the synchronous (we’ll see each other face to face, eye to eye, mano a mano) and the asynchronous (I’ll spend xx minutes reviewing this and get back to you by XX). The executive then spends part of his (or her) time on each schedule.
I can go on and on, but there’s no need to do this, because you can see what I’m trying to do. Whenever possible, try to give people more control over their (mutual) schedules, get right to the point, and try not to waste a lot of time when something simpler would do.
Comments welcome, of course. And of course if there are apps that really do any of these things already, feel free to boast.
January 21, 2013
Just finished a year and a half of unblogging. Had a gig, and oddly enough, what they wanted was exclusive access to my opinions about technology. So it wouldn’t have been right to broadcast them out to the net, too.
Before ramping back up, though I’m going to take a break. Sit back. Travel some. Read some books. Extend my range a little bit.
In the process, I thought, why not do the same with the blog.
What follows, then, has nothing to do with technology. But it contains much better advice than I usually give.
Read these books. All of them are terrific. A lot of fun. Worth your time. I first compiled the list for some people in my family who asked for it. Thought I’d share it with you.
In no particular order:
1. To Each His Own. Leonardo Sciascia. Sciascia was an Italian journalist who wrote both fact and fiction about the Mafia. His three works of fiction are among the creepiest murder mysteries ever written. If the thought of the Mafia scares you now, any of these very short books will have you looking in your closet before you go to sleep. In this one, a Sicilian priest begins to suspect that there’s more to the murder of a postman than meets the eye. And there is.
2. The Long Ships. Frans G. Bengtsson. An adventure novel written by a Norwegian journalist during the Nazi occupation, set (more or less safely) in 975 AD, when the Vikings would row (literally) from Norway to Spain and back, if they thought they could pick up some treasure on the way. The hero, a Viking captain, does indeed go to Spain, is captured, rescues himself from the galleys, becomes a favorite of a Castilian Prince, revenges himself on his captor, escapes with a fair amount of booty, clevery fends off the King of Norway who thinks that boodle belongs to him by rights, deals with mutiny, shipwreck, and treachery, and that’s just the first 100 pages. Then it gets better.
3. Odds Against. Dick Francis. Horses. Self-possessed loners who deal with whatever comes up. Burly, ruthless villains. It’s Dick Francis. What can you say? The best of the lot, probably, and if you like this hero (Sid Halley), there are two more with him.
4. The Spies of Warsaw. Alan Furst. Clever Nazi villains, but a cleverer hero, who just barely escapes. Wealthy, but available countesses who have a past; dangerous border crossings; bags of money. What could be more fun?
5. True Grit. Charles Portis. There’s a reason why it’s been made into a movie, not once, but twice. It’s a heckuva yarn. What the movies lose, however, is the best thing in the book, the voice of the heroine–resolute, prudish, penny-pinching Mattie, the one who’s willing to hire John Wayne and make him do what he wants, but sure as shootin’ ain’t gonna pay full freight, not if she can help it, even if it is John Wayne. I mean, he drinks. The (first) movie does have one thing superior to the book. It offs Glen Campbell. Can’t complain about that.
6. Gone with the Wind. Margaret Mitchell. Another book that’s better than the movie, but takes a lot more time. I don’t need to tell you anything about it, except maybe that the title comes from a poem by Victorian poet, Ernest Dowson, who also came up with “days of wine and roses,” and “loyal to you, darling, in my fashion.” No one reads Dowson any more. Does anybody read Margaret?
7. The Count of Monte Cristo. Alexandre Dumas. At a little over 1000 pages, it isn’t an easy commitment, and even Dumas got tired about page 850, but listen, even if you just do the first 350 pages, where he’s barely escaped from the Chateau d’If, you can call it a day, and still had about 20 books worth of great reading.
March 30, 2011
Groupon at $6 billion, for what, coupons? Twitter at who knows how much more, for what, stray pulses of thought? CornerStone OnDemand at 10 times revenues? How much of that is for the words “OnDemand” cleverly tacked onto the name?
Are we in the middle of a cloud boom? And if so, can we learn anything from the last big boom, the dot-bomb?
Well, I remember the last boom pretty vividly–I was young and foolish back then–and I would like to offer, if not sage advice, a way of thinking about these companies that at least help you separate them.
I’m going to use as Exhibit A, a rather smurmfy story that was circulating a few weeks ago in the financial community. Marc Benioff calls up Dave Duffield at Workday and says, “How much?” Dave says, “$2 billion.” The person telling the story intends for you to be shocked, shocked, but just in case you missed the point, he closes the story with a snide comment: “$100 million in revenue, and they want $2 billion? Time to sell cloud stocks.”
Now, I don’t believe that this story actually happened, for two obvious reasons. Reason #1. Both people have the good sense to keep the story to themselves. Reason #2. Well, wait until you get to the end.
But first, let me tell you about Workday.
Workday is a SaaS (cloud) company that does full-suite (HR, Payroll, and now Talent), global HR on an object-oriented in-memory database. It is run by two of the smartest people in the business, and since they cared about HR, they recruited many of the best people from PeopleSoft, which at one time had the best HR and Financials package out there. I’m not a super HR geeko dweeb genius–you know who you are, Naomi–but I’ve seen the package many times, and I’ve talked to them often about what they’re trying to do, and as far as I’m concerned, they’ve got a better mousetrap. They do HR (for their target market) better than anybody else in their space.
Now, when Workday was being started, they decided early on that they would build a product for big, global companies. They had done this once before at PeopleSoft, as I said, so they understood the challenges. Privacy laws, getting the addresses right worldwide, languages, expats, payroll, you name it. Hard stuff (and, I might add, not done entirely successfully the first time around). This time, though, they figured that their cloud-based, object-oriented, in-memory technology would be way better able to do all this hard stuff than what they had the first time around, plus, as it turns out, it would be highly buzzword compliant.
Have they gotten there? Not yet. But so far, so good. They’ve recruited one global client, Flextronics, and installed the package worldwide. There are issues, there are complications. But they’ve got a pretty good proof point, and now, they’re trying to sell it to and install it in other large, global companies who happen to want better mousetraps in HR.
So what do you think? Is this one-third as good as Groupon? One-fifth? As good? Or, as the smurmfer seems to suggest, 1/20th of what Groupon is worth, max.
Well, let me suggest a way of looking at this question. And please, the usual disclaimers. I don’t own any Workday stock, don’t have any economic relationship with them, and paid my own way to the last meeting I had with them. I’m enthusiastic about them, but because I can really see the point of in-memory, object-oriented cloud computing and I like the way they applied the technology to the problem.
So what’s the value of a better mousetrap?
When I think about any of these companies, I start by trying to figure out what kind of value they could deliver. Back in the dot-bomb days, this was a really good way of separating out the wheat from the chaff, because many of the vendors didn’t deliver any value at all and wouldn’t unless they changed what they were doing radically. CommerceOne, I remember, was my paradigm for this. Their software didn’t do anything and wouldn’t do anything, so there was very little value.
I then figure that the value of the company is some function of the value they deliver multiplied by the time that they can deliver it for. This last part is important. One worry I have about Groupon, for instance, is that it might turn out to be a fad. People will get tired of getting coupons (unlikely, I admit), or merchants will get tired of giving stuff away, and after a while they’ll fade to black. With Google, by contrast, I don’t have that worry. It will deliver value for a very long time to come, unless people stop using the web.
So where does Workday stack up on this measure? Obviously, it’s not bad. If it really is a better mousetrap and it gets into more of the large companies in the world, there’ll clearly be a lot of value delivered. And given how long companies use these products (20 years is pretty normal), the total value delivered over time is significant. As much as coupons? Sure. Maybe more.
But, then why haven’t they already zoomed up into the stratosphere, like Facebook or Twitter? The answer, I think, points up a really important difference between the public cloud applications and the ones, like Workday, which are meant for organizations. The public consumer applications are things that an individual picks up and uses. But enterprise applications are really a piece of infrastructure, like buildings or electrical systems, which don’t deliver much value until they work for a lot of people.
When you build products for individuals, you can bootstrap. But when you build infrastucture, revenue doesn’t come in right away. There’s always a large up-front investment, partly in physical plant, partly in getting the infrastructure to the user. True of electrical systems or telephone systems. True of roads or harbors. True of enterprise software systems.
So Workday today isn’t zooming because it’s still building out. In a way, it’s a little bit like Hoover Dam, say 75 years ago, when the dam was done and the pipeline was being built. A monster amount of money had already been spent on the dam, and during that time, there was no revenue at all. Then, while the pipeline was being built, some revenue came trickling in (hee, hee). The people in El Centro or Thermal or Brawley were getting good, fresh water, and they were paying for it. But it didn’t add up to a lot. No offense meant to Flextronics, but this is the situation that Workday is in now, with that $100 million that some people find so sneer-worthy, if $100 million it is.
So why are they sneering? Well, sure, if the pipe stopped in Brawley, it wouldn’t be so great. But you have to ask, why does anyone think the pipe’s stopping there. Presumably, the pipe will go farther, hit a city or two, and then the investment looks a lot better.
Sure, there is some doubt, as long as the value isn’t actually being delivered. An earthquake might break the pipe or the dam. The water might be no good. Somebody might invent a fresh-water-from-salt process that works really well. At Workday, people might not like the product as much as I do. It might be difficult or expensive for companies to dump their old systems. New competition might crop up.
But that’s not the point. The question is, how do you value Hoover Dam when the pipe has only gotten to Brawley? Well, you don’t start out by sneering at the revenue they’re getting so far.
So, two points to remember, if you’re afraid of boom valuations.
1) The real value is a function of the total value delivered over the life of the product.
2) For infrastructure products, especially cloud infrastructure products, you see a huge up-front investment, and while things are being prepared, money comes in slowly.
So, under these criteria, how does Workday look? Well, it’s pretty good. Take a look at the value that Flextronics is planning to get. Assume that other large, global companies will also want that value. And assume that once it’s in place, the product can go on for the 20 years that PeopleSoft seems to be lasting inside companies. As good as Groupon, ya think? I think.
Which brings me to the second reason I don’t believe that story. $2 billion sounds like a number that a value investor made up because he’s trying to show how ridiculous valuations have gotten. But when you look at what’s actually going on there, $2 billion seems off. It appears to me that it’s rather too low.
March 5, 2010
Who’s to blame when IT projects fail? Michael Krigsman argues that blame should generally be shared among the three major culprits (software company, consulting company, customer), and a recent torrid discussion among the Enterprise Irregulars largely supported him. If anything, several pundits have told me in private, blame the customers. “If a customer’s going to be stupid, we can’t stop him,” said one.
I’m not comfortable with this argument, because I don’t think it’s sufficiently rigorous. In any unfortunate chain of events, many people have a hand. But it’s simply wrong to blame them all. Some, because of their role or their power or their ability to influence events are principally responsible, while others are merely incidentally involved or are even victims. To get the blame right, you have to dig down and figure out where the power lies.
To see what I mean, let me use an example used by philosophers in the area. You all probably know that World War I began after Gavrilo Princip assassinated the Archduke Ferdinand in Sarajevo. The problem is, who do you blame? Princip (who, it happened was so indecisive and incompetent that he was walking away from the spot he’d picked), the Archduke, who went to Sarajevo only because he wanted to have an outing with his mistress, or the political situation in Europe? Hard to say. But the one thing you don’t want to do is blame the coachman, who, as it turns out, turned down the wrong street and thereby brought the Archduke right to Princip.
In my view, the closer you are to setting the parameters for a project, the more likely it is that you’re setting the course of future events. So if I want a culprit, I look at the person who’s holding the gun, because it’s his decision whether to fire or not. For that reason, I tend to think that the software vendors are presumptively responsible. They’re the ones who decide what can and can’t be done with the tool they sell, and if they create a situation where dominos like misuse, misunderstanding, careerism, stupidity, etc., fall into each other one after the other, like the great countries of Europe, they are responsible, because they could have and often should have anticipated this and done what they can to prevent it.
This isn’t just because they set the conditions and they are responsible if they design conditions that don’t work. It’s also because they give the people the idea that that’s what they’re doing. We tend to give these mandarins the benefit of the doubt, believing that these products are fully tested, that they accord with best practices, that the most experienced people are working on them, etc., etc., etc. And once they realize that this is the expectation, that people do expect them to be good engineers, etc., etc., they take on extra responsibility. It may be fooish, yes, and If the customers believe that tommy-rot, perhaps their foolishness is contributing to the problem. But it still seems to me that the people who accept the power given them by this false belief need to take the responsibility that goes with it.
And that’s why they are presumptively responsible.
I was reminded, forcibly, of this by a recent event at the local library, which just re-opened in a brand new facility with brand new automatic checkout machines. I’m a good citizen, so when I went in the other day with my seven-year-old red-headed daughter, I renewed a book she hadn’t finished. Thirty minutes later, we checked out a couple of new items that she had found.
In the meantime, somebody had checked out seven videos on my account. I still don’t exactly know how, but let’s just assume for the sake of argument that when I finished renewing, I walked away from the terminal, leaving my session “live,” and somebody later walked up to the terminals and just added a few videos to what “I” was doing.
The sessions do time out, and the first thing you’re supposed to do is scan your card, so there’s at least some possibility that this was done with malice aforethought. Somebody had realized that you can steal the Cambridge Public Library blind, if you just hang around the terminals and act quickly after somebody walks away from them. It’s kind of a public-spirited stealing actually, because the person who gets stuck with the bill is not the taxpayer, but the person who used the terminal. The books appear on their account, and as the supervisor told me later, it’s the library policy to make people take responsibility for the books on their account.
“If you use plastic,” he said, “There are tradeoffs, and you just have to accept that fact, my friend.”
You see, as soon as I found these spurious borrowings on my account, I had immediately gone and found said supervisor and told him. My feeling was, “This is a new system, and it’s flawed. If one person has figured out how to do this, others will, too, and pretty soon, it will be open season on the pitifully few books in the aforementioned library. Somebody had better get cracking and fix this.”
Well, that was my feeling, until I talked to the supervisor, who corrected me. “What you say is impossible. We have never had a case like this. You are responsible for the books. Case closed.” I didn’t take this quietly, so eventually, he took down my name and the list of spuriously borrowed videos, and after I left, he shoved the list in his drawer.
The only reason I know even this much is that three days later, I came in to borrow another book, and the videos were still on my account. “I called the assistant director, but he/she is out of town,” he said. I think if he honestly believed that one could steal lots of books with impunity from the library, he would not have reacted this way. But he didn’t. He just thought I was a liar.
Here is where the aforementioned presumption comes in. This guy simply couldn’t believe that the computer system that he had been given could have a flaw. Rather than believe that, he preferred to believe that I, standing there with my seven-year-old daughter, had checked out the videos (seven of them), secreted them somewhere in the library, gone up to him and tried to get them off my account. After I succeeded, I guess he was thinking, I would then go back to the hidden cache, put the seven videos under my arm and walk out right in front of him.
Now I ask you, which of these scenarios is more implausible. One, the designers of the checkout system did so imperfectly, leaving a security hole, which somebody found, possibly inadvertently. Two, this white-haired father of a seven-year-old was trying to steal from the Cambridge Public Library by claiming that he had not checked out videos that the system said he had just checked out (even though the videos were nowhere about his person).
Implausible as it is, this well-educated person who by his choice of profession shows that he has dedicated himself to the life of the mind simply found it impossible to believe that there was anything wrong with the system. He believed this so firmly and so thoroughly that he couldn’t even be bothered to notify anybody about the problem, even though, if there were a problem, it would be a good idea to fix it as quickly as possible, before the library shelves were emptied. So far as I can tell, he still believes it.
The thing is, I almost fell into the trap, too. I’d had my probity questioned, so you know who I was blaming? That supervisor. I really had to sit down and think before I realized who was really at fault. That’s right, it was the vendor. To see why, think about what happens in an analogous situation, at the bank machine. When you take money out of these machines, you simply can’t leave the machine open for the next guy to use. You have to get your card back, and if you try to leave without doing so, you are alerted, loudly. Clearly, best practice in the area is to make it really hard for somebody else to pirate a session. And the vendor didn’t follow this best practice.
I should have known this from the beginning, because I should have remembered that the vendor is presumptively responsible. But as long as I don’t remember it or the supervisor doesn’t know it, the vendor is off the hook. Instead of blaming Princip (or maybe the Archduke or the political situation in Europe), that supervisor is doing the natural thing and blaming the coachman, the guy who made the last and most visible mistake. And until he can be taught that this is a mistake, books will continue to be stolen from the Cambridge Public Library.
February 12, 2010
Several years ago, the top, top people at SAP were offered a gigantic bonus if they could “double the stock price by 2010.” Not too soon after, a friend of mine who was in line for the bonus left the company for a start-up. “Why,” I asked, incredulous.
The answer was pretty simple. “It’s not possible,” my friend said.
Not possible, one might have wondered at the time. Then why are all these intelligent people pretending that it is possible. Don’t they see the crocodile in the room?
Somewhat later, I talked to another friend, who had gotten a REALLY good deal if he signed an SAP contract now, before the end of what looked to be a tight quarter. “But all they’re doing is pulling revenue forward,” I said. “That’s right,” said my friend. “They’re taking a huge hit and for no particular reason.” So, I wondered, why are all these intelligent people trying so hard to hit that quarter. Don’t they see the crocodile in the room?
Still later, I talked to an investor who was pretty pleased about SAP’s new margin targets. Henning, you’ll remember, had told the investor community that they’d finished a long, expensive project to upgrade the product, and now they could afford to put the money back into margin. “But the investment didn’t produce the results they wanted,” I said. “So now, if they increase margin by reducing R&D, they’ll be taking away from investment they have to make.” Didn’t the people at SAP see that? Didn’t they see the crocodile in the room?
It seems to me that with this week’s changes at SAP, it’s possible that somebody (Hasso?) actually sees the crocodile. You can be the most forceful, sensible, and astute manager in the world, but if you try to make a technology company more valuable without generating value, eventually, that crocodile will get hungry. You can’t do it by giving out bonuses and hoping. You can’t do it by pulling revenue forward. You can’t do it by saving when you need to invest.
The only way you can do it is to bite the bullet and start using the maintenance that people pay you to make modern products that work well, products that will actually justify the maintenance they spend AND appeal to many other people who don’t yet have relationships with SAP. And if that takes a while, it takes a while. You can’t just say 2010 or else. You have to figure out how to do it, first. And sometimes it takes a while.
Now I’m not saying that the new management can find crocodiles any better than the old management. We’ll see. But if they do see the same crocodiles that I do, and they want a recommendation from little old me, here it is. Come clean. Right now, most investors are disappointed, because they think that SAP is backing off the old CEOs promises, and they don’t know why. If you tell them about the crocodile, admittedly, many of them will run away. But others will realize that it’s a crocodile that can be tamed, and since you trusted them, they will trust you to do the right thing.
PS. If this post makes it sound as if I’m blaming Léo for lack of realism, I apologize, to you and to him. Léo was using all the levers at his disposal to do what he was being asked to do, and he was using them in an insightful way. SAP did need to reduce its workforce, improve its support, and improve its operations, and under Léo, all these things were addressed. My only point is that what Léo was doing could not address the underlying problem. But that’s not what he was charged to do.
June 29, 2009
Top 10 things to use the money for, once you stop paying maintenance.
10. Reducing the backlog at internal support. This doesn’t take much money, of course, since you’re already saving the hours your people had been on hold waiting for the software company to answer.
9. First-Aid. You know all those open, raw spots in your current installation, the ones you hoped would be fixed by the latest version, if you could ever get it installed? Take charge and fix them, ’cause now your former supplier ain’t gonna do it. You’d be surprised what rudimentary first-aid tools can do: a few user exits, a virtual machine for low-profile Java apps that the exits talk to, a little user training, a few reports. You’ll get people back to the front in no time.
8. Raises. You know life just got easier. But that doesn’t mean that you shouldn’t use some of the money to reward your staff for all the effort they put out over the years dealing deal with your former supplier.
7. Shutting down the patch testing environment. Of course, once you do that, you have even more money, so…
6. Buy something you couldn’t afford. Go on, live a little. Here are some suggestions…
5. Invest in mobile. Every one of your executives wants cool stuff on their iPhone (or an iPhone if they don’t have it). Make yourself a star. Give it to them. They’ll go to their graves believing that IT support improved on the day you stopped paying maintenance.
4. Invest in the cloud. Face it. With the end of enterprise support, you don’t have an excuse not to do development that you can’t afford to do. So start by reducing the cost of development. With EC2 or Force.com or Rackspace, you can suddenly start doing it right, that is light and cheap.
3. Don’t invest in social networking. But do take the shackles off. Spend a little, tiny bit of money encouraging people to figure out what they ought to be doing with these new tools (if anything). And maybe use some of the tools to help everybody keep track of the efforts.
2. Return some of the money to the CFO. He or she has been walking around the halls looking for some spare change. Now you can reach in your pocket, pull something out, and feel good for the rest of the afternoon.
1. Hold a check-burning party. Write out 10 of those big checks made out to whoever it is, go out to the parking lot, and reduce them to their constituent elements. Hint: bring some beer.
Got your own suggestions about what to do with the money? Add some comments here.