A few months ago, I signed up to be an advisor through the Northwest Entrepreneur Network (NWEN) in a new program that serves as a matchmaker of sorts between entrepreneurs and those that have a bit of knowledge about a particular area of business.  This program is appealing because no one is trying to sell anything to anyone (at least not me) and it is an opportunity to strenghten what is already a strong start up culture here in Seattle…plus I get to meet some really smart people.

In the past couple of weeks I have had two separate meetings that were arranged through this program with entrepreneurs including one this afternoon.  I certainly have a lot of opinions and have had my fair share of start up experiences so I really enjoy having these meetings about go-to-market strategies and tactics.  The role of advisor is very different than consultant or operating executive so I am working on how to best engage to help frame the challenges and possible solutions without getting too involved in the operating details.

Both companies are really cool and I will share more about them as appropriate.  If you are interested in chatting about the go-to-market aspects of your business, drop me a line and I'd be happy to share my thoughts over coffee or a beer.

Google has, more than any company, made the beta label on a software product meaningless and is learning that their enterprise aspirations don't jive with having a product like Gmail in "beta" for five years.  Enterprise customers don't want the SLA to be based on that fact that "stuff will happen because it's a beta product."

I'm not saying that you shouldn't pursue a pre-commercial product launch strategy that puts your product in the hands of as many possible target users as possible.  Releasing early and often with actual user feedback is an essential component of building and launching a new product.  Understand that the bar is high as the expectation on "beta" is high these days for the previous stated reason but don't let that distract you.

What really resonated with me last week at the WTIA's Fast Pitch Forum was when Socrata (formerly blist) CEO Kevin Merritt described the beta process as being less about product and more about market these days.  They had their product and brand out there (essentially a database app in the cloud) and the market gave them guidance on how to better position it (sharing data with a focus on government transparency).

Building on Kevin's thoughts, it struck me that the on-demand tools and infrastructure available now make it easier than ever to get something "out there."  The process then is less about the functioning product but more about how you align your product concept and the features you are building with a market – product/market fit.  This requires a vigilant process of creating market hypotheses and testing the heck out of them – "salespeople do x and use y so therefore would find value in my product." 

You can only validate the hypothesis above if you take a methodical approach to putting your product in the hands of a salesperson and seeing if your perceived need is indeed actual need and is the source of realized pain vs. latent. 

You may very well be wrong…but that's ok.  It's beta..

Here's some nice video of Gist founder & CEO T.A. McCann at today's WTIA Fast Pitch Forum.  I attended this event several years ago and it is a good place to connect with both investors and entrepreneurs here in Seattle.  I missed Tim Draper's song at lunch due to a conference call but hear it was "interesting."

http://www.ustream.tv/flash/video/1568210

Q&A is towards the end with a nice opening question from Rob Adams, Sr. Director of Corporate Development at Cisco Systems, about how Gist compares with Xobni.  He issued the proper disclaimer that they are an investor and I thought TA's answer was spot on about the differences in Gist and Xobni.

Other highlights of the day included some cool presentations, meeting new people, and seeing some great early stage companies from here in Seattle.

I've not had the chance to meet David Cohen (yet) but am a fan of his blog ColoradoStartups. 

You should read his "Plenty of time for that later" post from which I am going to lift a passage to share here:

"So, if you’re thinking about doing a startup that you’re really
jazzed about, and are trying to decide if now or later is the time,
here’s my advice. Look at the clock on your computer, and make a note
of the current time and date. Hang that note on your desk or on a wall
somewhere where you will see it every day. Now, ask yourself if you
want to watch the days, weeks, months, and years slip by while your
dream just hangs there on the wall or if you want to do something about
it.

If you passionately want to do something about something, now is the time. Later is just an excuse."

Great words David.

I'll be in Boulder later this month and maybe will actually be able to meet David in person during my visit.

Congrats to the team at Orchestria on being acquired by CA.  I haven't heard terms or amount, but hope it was somewhat positive for the investors and team. 

I both worked for and competed against Orchestria and made some good friends and had some great experiences along the way.  I think about my time there as a perfect example of going through the process of finding product/market fit. 

When I started there in 2002 we had a really cool product that could do many things around messaging and desktop control.  The process of taking it to market and finding a fit around compliance, broker/dealers, and supervision was really exciting (and a bit painful).  After my departure, they made a turn into the data loss prevention market and that appears to be the story being told about this acquisition.

Also, the Ferris Research blog has a bit of commentary including speculation on deal terms.

Then sign up for the NWEN Advisors program.   Cool new program designed to help those needing advice connect with those that can provide it.  I just signed up to help out. 

This is a great use of an hour of time (for real).  I have not met Dharmesh Shah but follow his blog OnStartups and would love to have the opportunity to meet up some day.  I am also intrigued by his most recent company – HubSpot.

Below are the notes I captured as I watched this.  Great stuff. 

• A small exit is a good exit (but not if you take VC funding so be aware of the pros and cons)

• Be wary of the "attention economy" as advertising-based models are perilous

• Enterprise software selling sucks

• If you want to do a start up, get started

• Get your product or service out there and charge for it asap – people will tell you why they won't buy it

• Downsides to SaaS business models – margins aren't as good (b/c of COGS – you are running your own software); human costs; subscription shifts risk back to vendor

• Focus on total cost of customer acquisition (references Constant Contact); $300 sales/mkting/mkting programs cost versus lifetime value of customer($1500); factor in churn

• Drivers of that business: lifetime value and cost to acquire; focus on churn rate

• What can the usage data tell you?  CHI (Customer Happiness Index) is a probability calculation that a customer will stay with you; Did the customer log-in plus usage patterns; Customers that use this feature stay with us, those that don't use it leave; This data will make product management work

• On partnerships – don't do them.  The 900lb gorillas don't care (even though they act like they do); as for start up partnerships (you both want the same thing – looking in the mirror); but distribution partnerships can work if there is an established process and model.  Beware the time/resource suck from these efforts.

• On marketing/lead generation – create an industry/market blog (even before product) to get feedback, establish your reputation and domain expertise, will also help you understand if there is a there there; reduce market risk as early as possible (will anybody buy what I built?)

• Google Adwords – created an efficient market to connect sellers & buyers but still a Google tax involved (that is what organic search is all about)

• CPC is a 'morphine drip'; you become a victim of the latest market entrant who bids up the price

• Get good at being found in organic results (longer term b/c it is harder); upfront investment that pays off over time; make sure your website is best search result possible (be rank worthy).

Unfortunately many of these points have been learned by living them.  If you are looking at an early stage company, make sure you get a true understanding of the state of the business.  The longer a start up has been around, the more "scar tissue" from previous decisions, actions, and mistakes.

The 'experience' and background of the team, representations made by employees or recruiters, cash in the bank, investor/VC support, etc. are really not enough to accurately gauge an opportunity. 

Everyone is selling so be sure to get to the core of the business quickly.  Here's  a handful of questions I suggest you get answers to before taking a position:

• Tenure of VP Sales
• Tenure of VP Marketing
• How many predecessors in each role and why aren't they there anymore
• Tenure of CEO
• How many predecessors in the role and why did they leave/why were they terminated
• Level of operational/day-to-day engagement
• Identify the last 5-10 deals closed
• What was the deal close timing including how near/far apart and where they were on the calendar
• When they entered the pipeline
• When they were forecasted to close
• Their dollar/revenue size
• The lead source & similarities in sources among them
• Implementation/activation status for these deals

The answers to these questions will tell you if you are staring at a turnaround opportunity or a growth opportunity.  You can then decide what you're up for as both have their pros and cons.

Oh and get a demo.  If they can't show it to you or if they do and it's not compelling, you'll have a great indication of what lies ahead.