Month: December 2008

A framework for understanding personal messaging

/ Robert Pease / Leave a comment

I have been thinking through this a bit and am trying to get my head around all the ways we connect and share information (person to person).  As blogging is not only a great way to share but a way for me to sort my thoughts on topics, I thought a post would force my thinking a bit.

At this point, I have identified 10 different categories for personal messaging:

1. Email

  • Corporate (Exchange/Domino environments)
  • Webmail (free services like Gmail, Hotmail, Yahoo! mail)
  • 'Site mail' (closed network email like Facebook or LinkedIn mail)
  • Email services (outbound where you can assign a "From" like email marketing systems)

2. Text messaging

  • From a device
  • From a browser
  • From a system

3. Instant messaging

  • Stand alone apps like AIM or Trillian
  • Inside webmail like Gmail
  • Site IM (like Facebook)

4.  Content sharing/distribution (Slideshare, Youtube, etc.)
5.  Blogs (includes web pages, RSS feeds, and comments)
6.  Wikis and other collaborative spaces (closed/invitation only)
7.  Micro-blogging (Twitter including its direct message capabilities)
8.  Voice (includes POTS, VOIP, and cellular)
9.  Video (new like Gmail feature)
10. Other social networking tools/sites (a laundry list of options here including Facebook, MySpace, etc.)

I'll follow up with a post around the twelve or so factors to consider when selecting one method over the other.

Does private equity offer superior returns?

/ Robert Pease / Leave a comment

Via PEHub, here's some data to sink your teeth into about the state of private capital.  As their post points out, slide 14 highlights some interesting return data.  Not sure an 8.8% 5 year return is much to brag about although the 10 year return number is a more respectable 16.6% for venture funds (9.5% for all private equity in the same time period…eck!).   Also, this data was as of 6/2008 before current market…um…volatility.

Exits are exceeding life of funds in many cases (ie, more than 10 years) which puts a whole new dynamic into venture funding and that was before the current market trauma.  The IPO market will return.  It's just a matter of when and until then the entire asset class is going to be under scrutiny from those that fund it.

Private Equity Data Rounduphttp://static.slideshare.net/swf/ssplayer2.swf?doc=buyouts-west-final-version-1228171730739929-9&stripped_title=private-equity-data-roundup-presentation

View SlideShare presentation or Upload your own.

What is an addressable market?

/ Robert Pease / 2 Comments

This calculation is not "the market is forecasted to be $x million/billion and 1-10% of that is $x million/billion" nor does it have to be
an overly precise calculation initially.

It is one that requires more emphasis on how you calculate it vs. the end result as you evaluate a market opportunity.  If you apply some rigor,
you will have a better overall indicator of the size of the market and how to reach it.  In a way, it reminds me of the case questions from
consulting interviews where you were asked questions like "calculate the number of plumbers in the US."

The answer is not so much the point
as much as how you calculate your answer isolating out known inputs and assumptions.
Your addressable market analysis can be the first step in segmenting and understanding your market with your level of analysis influencing your marketing messaging, your sales approach (direct/indirect), and what the whole solution looks like from your target
market's perspective.

Let's say I want to try to size the total addressable market for CRM-based SaaS integration:

  • Input:    Subscription CRM revenue is $1.4B in 2008, $1.9B in 2009, and $2.3B in 2010 (according to the folks at Forrester Research)
  • Assumption:    "Subscription CRM revenue" = SaaS delivery models
  • Assumption:    Average CRM customer deal size = $50k per year
  • Calculated:    Today there are 28,000 subscription-based CRM customers
  • Calculated:    That grows to 46,000 by 2010
  • Input:    75% of SaaS will require at least 5 integrations to existing systems by 2010 (according to Gartner Group)
  • Calculated:    SaaS CRM customers in need of significant integration by 2010 = 34,500
  • Assumption:    Percent of SaaS CRM customers seeking to purchase a solution to this problem = 50%
  • Assumption:    Average customer pays $10,000 to solve SaaS integration need

Addressable global market in 2010:  17,250 companies X $10,000 = $172.5MM

This is the revenue available to the companies competing for it in 2010 – both products and consulting services.  Your company will
get some portion of this amount.

Could the assumptions be wrong?  Yes.  Can you use this basic model to run various scenarios?  Yes.  Should you refine and improve the
accuracy of calculations like this as you enter and gain experience in a market?  Absolutely.