Wednesday, January 30, 2008
Good news. I'm going to be speaking on a great panel at the O'Reilly Money:Tech Conference next Thursday (Feb 7) afternoon. We'll be talking about "Crossing the Data Line: Scraping, Online Data and Web-based Databases."
I'll be sitting with Tony Berkman from Majestic Research, which is a well-regarded firm in the channel checking space, and Steven Kaufer from Tripadvisor.com, which is a pioneer in user-generated travel reviews. I'm excited to hear what they and the audience have to say about qualitative analytics.
Sunday, January 27, 2008
Today is a big day for FirstRain. We've been working hard on a new product for the last year and today's the day we're announcing it to the world.
The product is called FirstRain Management Monitor and it's based on a breakout technology qualitative analytics which opens up a new market segment at the intersection of unstructured search and analytics. Management Monitor is designed to bring unique insights into management quality and performance, and an unprecedented level of management transparency, by applying pattern detection to the web.
Think of the web as a vast, unruly database of millions of results to be mined for patterns which a human can't find (because there are too many data points) but which a piece of software can. We can now find unique data and business trends for our customers because we i) search the web, ii) categorize the web results by complex business topics, iii) extract facts and events from the results, iv) store the data points in our knowledgebase and then v) mine these facts for patterns. And we’re providing this new package to all of our current customers because I feel passionately that we can keep our customers ahead of their competition by continuously enriching their research capability.
- On the Record report (quotes by or about a company)
This is an example of FirstRain finding a specific claim, as well as the name of a third-party expert I can ping about my thesis.
- No Comment report (instances and topics companies decline to comment on)
Here FirstRain puts into sharp relief AMR’s lack of a stated position on industry consolidation, which begs the question “What conditions would cause American not to state a position and strategy when their competitors are?”
- Management Turnover report (hires, departures and re-orgs, announced or not)
Here’s a recent Motorola example,
and Yahoo example
I posted on last week that shows how starkly trends and anomalies stand out with qualitative analytics.So now a CFO can see the same web results his investors do so he doesn't get surprised and a hedge fund manager can likewise not miss out when someone speaks outside of the party line. A CEO can see his competitors weaken in a division as key people leave and a long only money manager can build an ongoing database of quality management and where they're going. We have one customer, an aggressive hedge fund manager, who's primary thesis is discovering the track record of management and then investing in the good ones as they move around.
We’ve been in beta since November and doing demos to analysts since the beginning of the year, and to finally announce it to the world is very exciting! Our customers have been very positive about the beta testing we’ve done so far – this technology investment is key to our strategy both for investment professionals and for corporate executives.
This is just the beginning of the qualitative analytics journey and we know that only our imagination and the vastness of the web is the limit.
Friday, January 25, 2008
There's a good summary post on ReadWriteWeb today about the "work from home generation".
In summary the benefits are: No commute, Flexibility, Saving money and the environment, Increased productivity
and the disadvantages are: Brainstorming is difficult, You never leave work, Entropy is after you
I have deliberately built a company that is very flexible about where people work - but the reason is not altruistic - it's practical. We are, effectively, a 24/7 operation. Our teams are in Gurgaon (outside New Delhi), New York and California and we're running at a very fast pace because of our growth.
As a result, people are on the phone early in the morning, late at night and expecting them to also drive into the office for long office hours isn't practical. We keep some level of core hours, especially in engineering because of the need for brainstorming and design work, but as a senior management team we have become very good at working on the phone. We are very rarely in one place - we are split between the two coasts - so we have had to get very good on the phone.
Personally I am in New York almost every other week so when I am in California I like to work from home in the morning. My day usually starts at 5am and I often don't get into the car until 9am - which reduces my commute time.
The critical issue to make working from home effective is trust. As I posted before - trust is just more efficient - and when you trust employees and have clear objectives then there is no reason not to allow managers and employees to make their own flexible plans - and I think it's works for us in retaining the best and the brightest.
Thursday, January 24, 2008
Sitting at my mother's kitchen table on a stormy English night...
I had the privilege of going to two very small theatres in the the last week. First was to see Othello at the Donmar Warehouse - starring Ewan McGregor as Iago and Chiwetel Ejiofor as Othello - and then a few days later to see Honk at the Watermill. Both theatres seat about 200 people and in each case we were seated within 4 feet of the stage. When watching a production in such a small venue you see the inner workings of all aspects of the production.
You are close enough to see every bead of sweat, every small facial expression. Close enough to see the machinery behind the stage changes (even if it is only a character picking up a glove while running off the stage). It is quite unlike the large London or Broadway productions where you are struck by the machinery of the production - where hundreds of people are organizing in the background instead of a few players and musicians plying their craft at arms reach.
Othello was stunningly good. Ewan McGregor was brilliant and chilling as Iago and his evil manipulation would fit in well at the more political large companies. Chiwetel Ejiofor was heartbreaking. It's the first time I've had tears pouring down my face watching the death scene.
I had the privilege of going to see Tom Stoppard's new play Rock 'n' Roll on Broadway last week and it was fantastic. I have been a Tom Stoppard fan since I saw Jumpers (in London with the original cast in 1972) and then studied Rosencrantz & Guidenstern Are Dead, so when his plays come anywhere nearby (even if it's London) I always try to go.
Well Rock 'n' Roll is up there as one of his best. As the official web site says:
This extraordinary theatrical event, from four-time Tony Award® winner Tom Stoppard (The Coast of Utopia), is now on Broadway following a record-breaking run in London's West End. It's August 1968, and Russian tanks are rolling in to Prague... Jan, the Czech student, lives for rock music, Max, the English professor, lives for Communism, and Esme, the flower child, is high. By 1990, the tanks are rolling out, the Stones are rolling in and idealism has hit the wall. Stoppard's sweeping and passionate play spans two countries, three generations and 22 turbulent years, at the end of which, love remains — and so does rock 'n' roll.
The professor, played by the powerful Brian Cox, is one of the last English communists and sticks with his dogma long after communism's day in the UK has past. His student, played brilliantly by Rufus Sewell, goes back to Prague to try to help his country and is persecuted. The play is, being Stoppard, clever, heartbreaking, hopeful and very funny, all at the same time.
But what I found delightful was the way he uses rock and roll to punctuate the story, and uses Jan's records as an allegory for what Jan is going through in his life. Jan's experience is thought provoking, very sad and painful, and yet ultimately so hopeful.
To cap my evening off, Bruce Springsteen was seated in front of us (I went with a friend), with his wife. Cool. And yes, I was.
Wednesday, January 23, 2008
Motorola's troubles just keep getting worse - as reported today in the WSJ. At least the new CEO, Greg Brown, is predicting "no quick fixes".
Looks like a quick fix was tried last summer, though prior to Ed Zander's departure. We track management turnover and you can see from the MOTO chart that there was a major reorg in July. [Red are departures, blue internal moves and green hires - dark are execs, light are managers]. That July spike looks like it was a reorg to take management from ICS - the Integrated Supply Chain group (procurement etc.) - over to mobile devices - maybe in an attempt to cut costs in the phone business. When logged into the system you can see the details of each move easily so you can determine what departments are affected by the changes.
As you can see from the FirstRain chart, this was just the beginning of the churn and the drain of management has been increasing ever since, including Ed's departure at the beginning of December. These charts make fascinating reading for many companies.
Monday, January 21, 2008
This is a terrific piece in the WSJ from the heart - and worth a read. Here is the core about the future of publishing - it is a brave statement from one man against the negative trends the industry faces today.
"One thing I want put on the record, though, is that I disagree completely with the way that this company allocates resources to its newsrooms, not just here but at Tribune newspapers all around the country. That system is at the core of my disagreements with David. I think the current system relies too heavily on voodoo economics and not enough on the creativity and resourcefulness of journalists. We journalists have our faults, but we also have a lot to offer. Too often we've been dismissed as budgetary adolescents who can't be trusted to conserve our resources. That is wrong. Journalists and not accountants should seize responsibility for the financial health of our newspapers so journalists can make decisions about the size of our staffs and how much news remains in our papers and web sites.
The biggest challenge we face -- journalists and dedicated newspaper folks alike -- is to overcome this pervasive culture of defeat, the psychology of surrender that accepts decline as inevitable. This mindset plagues our business and threatens our newspapers and livelihoods. I believe that when Sam Zell understands how asinine the current budgetary system is, he will change it for the better, because he is a smart businessman and he understands the value of wise investment. A dollar's worth of smart investment is worth far more than a barrel of budget cuts.
This company, indeed, this industry, must invest more in solid, relevant journalism. We must integrate the speed and agility of the Internet with the news judgment and editorial values of the newsroom, values that are more important than ever as the hunger for news continues to surge and gossip pollutes the information atmosphere. Even in hard times, wise investment -- not retraction -- is the long-term answer to the industry's troubles. We must build on our core strength, which is good, accurate reporting, the backbone of solid journalism, the public service that helps people make the right decisions about their increasingly complex lives. We must tell people what they want to know and -- even more important -- what they might not want to know, about war, politics, economics, schools, corruption and the thoughts and deeds of those who lead us. We need to tell readers more about Barack Obama and less about Britney Spears. We must give a voice to those who can't afford a megaphone. And we must become more than a marketing slogan. I know I can rely on this newsroom to do this. "
And then the Wall St Journal's further editorial on the story Why the Los Angeles Times Can't Keep an Editor and the challenges publishing faces - including the grim statistics
The latest drama at the Los Angeles Times is the story facing the broader newspaper industry. As circulation drops and ad revenues deteriorate, newspaper companies are struggling to figure out how to stay afloat. Third-quarter net income at Tribune Co., for instance, declined 7% as newspaper advertising revenue fell sharply. At the company's newspapers, which also include the Chicago Tribune, Long Island's Newsday and the Baltimore Sun, revenue declined 7% to $871 million. Ad revenue fell 9%, reflecting declines of 6% in retail ad revenue and 18% in classified revenue. Print ad revenue was down at the Times about 10% last year, or about $80 million, Mr. Hiller said.
Tuesday, January 15, 2008
There is a terrific article in yesterday's Wall St Journal "Why CEOs Need To Be Honest With Their Boards". The need to be open and straight resonates strongly with my experience - but it is a balance that has to be managed carefully.
The tough challenge is that boards don't spend as much time in the company as CEOs do, and they tend to assume the CEO is overly optimistic, so you have to find ways to keep the board up to speed and help them absorb bad news without over reacting. I have found the best way to do this is to tell them early when you have bad news, don't let it fester or risk them figuring it out on their own.
As quoted in the article “In many cases, the CEOs have the best of intentions. As leaders, they want to take charge and inspire confidence, even when things are turning sour. But that instinct can lead them to be less than forthcoming about problems -- which can snowball into severe tensions with directors. That's especially true these days, as calls for good governance grow louder and directors seek to shed their image as fiduciary figureheads, insulated from a real understanding of the companies they serve.”
A classic example of this is how to lead when you are going to miss a quarter - which happens to the best of companies at times for a whole host of reasons. I am on a non-profit board where the CEO predicted that she was not going to make her fundraising targets and I advised her to get the news out to the board immediately so no one would be surprised. In the end she made her targets but the board appreciated the heads up and the time to do contingency planning. So, for a for-profit company giving an early warning if you are going to miss is an important part of building and maintaining credibility - plus allowing the board to participate in the management of the miss.
Likewise strategy options - M&A, distribution etc. - make sure the board is well educated on the market landscape and options well in advance so when you bring in a deal you don't have to start from ground zero.
Or even things like overall market strategy. I have to wonder if Hector Ruiz will still be running AMD by the end of the year given the failure of his strategy so far - and the way that failure is now entering such open debate - for example Cowen predicting a change away from the current market share strategy vs. Intel sometime this year. That has to be a contentious discussion at the AMD board level.
As the WSJ article says “CEOs who fail to make that leap [working effectively with the board and keeping them up to date] increasingly risk being fired. In 2006, 31.9% of CEOs who stepped down world-wide did so due to conflicts with the board, up from 12.4% in 1995, according to a recent Booz Allen study. The forced departures were "nearly always because of transparency issues," says Mr. Wheeler, who co-wrote the study.”
It's always been tough to be a CEO but now it is tough to be a board member too. The responsibilities are real and significant. So sugar coating in the current environment would be dumb. Better to put the time in to make sure everyone knows what's working, what isn't and what you're doing about it.
Creating values and putting them on posters around the company must be in an HR manual somewhere because its de rigeur for startups and large companies alike – and it was well written up in Built to Last – a terrific handbook for building a principled company. I’ve been through the exercise a couple of times now and I confess, when I was young and stupid, I thought it was a complete waste of time.
How the world turns. Now I am a zealot for defining our values and using every opportunity I can to reinforce them, because I know they can shape behavior and act as an spine for tough decision making.
At FirstRain we chose 5 core values – and we’ve kept them simple. More than 5 and we couldn’t remember them all – more complex than this and we’d lose the essential principles at work.
Our values are:
Act with Integrity at all times
Take Ownership for the company’s success
Demand uncompromising Quality in our people
Create ground-breaking Innovation
The stress is on the active, demanding words – delight; act; take; demand; create and how they apply to our core values – customers; integrity; ownership; quality and innovation.
So, easy to say and so hard to do….
My job is not only to chose them but to keep them alive. To not only walk the talk but when there is a hard decision to be made to actively (i.e. verbally) use the values to frame the decision. To talk openly about integrity, to be passionate about our customer delight at all times, to proactively recognize and reward innovation – to give just a few examples. I do this not only in the moment interacting with my team but also every quarter with values awards which we give out at our quarterly all hands meetings.
Sometimes, when I am using the values with my younger employees I do wonder if they are tuning them out the way I did in my 20s. But, if so, I am confident the value (no pun intended) will sink in over time. What I need to do is ensure we live by them and they are more alive every day than just words on a poster (in every conference room) or on a mug.
Thursday, January 10, 2008
I don't intend to write on politics here - I'm focusing on mining the web and growing a company - but there was a controversial op-ed by Gloria Steinem in the New York Times yesterday that really struck a nerve with me. Gender bias is so pervasive in our society - subtle and continuous in our media and language - that while I like to believe it no longer affects me, when I read a piece like this all the experiences I have of other people's assumptions of me, even recently, spring to mind and I have to smile, make myself shrug off my feelings and keep going.
Remember the adage "families who eat together stay together"? Well, there is an analogy at work about teams who sit together.
One of the contentious decisions that has to get made when setting up a company is the seating arrangement. Who gets an office vs a cube? How big are the offices? yada yada
I've taken a strong position in building FirstRain that a) we're all equal in this (we just have different roles) and b) we need to sit so we get the highest level of communication - and creativity - possible. As a result we follow these guidelines:
- everyone has a cube. Everyone.
- we have plenty of small conference rooms, with white boards, so you can huddle quickly to hash out a decision, or have a private conversation
- engineering teams sit in pods. A pod is a group of 4 cubes where the cubes all back onto a center so the four people can push their chairs together to have a conversation. Sometimes it feels dense but it's great for continuous collaboration.
- sales sits in rows - like traders desks - but again with teams seated together and in the same cluster as their manager so they can share ideas easily.
- and finally, a major decision, to put sales all in one office (in New York) and not in regional offices.
This last decision was not how we started out. Originally we put our sales people in the major cities where our customers are - but this was not effective for a couple of reasons. We have a new technology in a new segment and there are no recipes on how to do it. As a result it's critical the sales team be able to develop and change their approach quickly and continuously. And second, since the majority of our sales are on the phone it's much more cost effective to have everyone in one place than to pay for multiple offices.
Google has done a recent study on information flow and proximity which confirms our thesis. Bottom line, if you want people to talk continuously so you can shape and mold your execution you need to seat them together. Email is just not a good forum for creativity.
And, for me as a CEO, I need to be with both teams - R&D and sales - and so that means racking up the miles.
Saturday, January 5, 2008
Tuesday, January 1, 2008
I can't say I am sorry to see the back of 2007. On one hand it was a terrific year. My immediate family is thriving and FirstRain is growing like gangbusters - no question this is the year for us on many levels: the thirst in hedge funds and executive teams for an information edge, the web as a source of meaningful research and our breakthrough models and algorithms.
But, all that said, on many levels it was challenging year.
In my small world in 2007 we lost a larger than life man, Dean Richard Newton, a year ago to cancer. He was a close friend and mentor who I loved and was loved by many, many people for his spirit, warmth and incredible wisdom. Sadly, he was not the last friend I was to lose last year, two more passed on in the first half of the year, and I spent the better part of the year just being there for a friend through an ugly breakdown.
On the world stage I have watched in horror as our values and ideals have been squandered by the current administration (great opinion in the NYT on this), as the crisis in Africa continues unchecked and then, in the final days of the year, as Benazir Bhutto was murdered. My grandfather gave a significant part of his life to the preparation and formation of Pakistan - he must be weeping in his grave at the chaos and uncertainty the Pakistani people are faced with.
This was the year of the wild swing between great and horrible days, needing to be strong and steady no matter what the world served up. Combine this with over 150,000 miles... it fits that we did not celebrate New Years Eve except with sleep.
But I don't spend much time looking back - it seems a waste of time - so I concentrate on today and how to make tomorrow better. This is the year I'll be focused on leading the incredible growth FirstRain is going through - definitely a fun time for a CEO; we'll be crazy busy with two kids in high school, Rambus is through the worst of cleaning up the past and we have an election coming up where we can elect responsible leadership. And, my New Year's resolution is to be physically strong so I can keep up with the demands - and for me that means training for and completing the Napa Vineman - yikes - that takes some visualization!
Happiness is about being in the moment - in the words of Storm Jameson: “The past is gone beyond prayer, and every minute you spend in the vain effort to anticipate the future is a moment lost. There is only one world, the world pressing upon you at this minute - here and now. The only way to live is by accepting each minute as an unrepeatable miracle. Which is exactly what it is - a miracle and unrepeatable.”
Here's to the miracle of Jan 1, 2008.