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The NetSuds (TM) Report
The August 1, 2001 Issue:
Re-sending of this newsletter to
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Subscribe to this report by
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Definition: "com and .com" = Telecom, Datacom, IT or Internet
In this Issue:
1.0 Heard on the Net
2.0 Jobs in the
"com and .com" Market
3.0 NetSuds on Tour - No Tours This Month!
4.0 Primary Line
Phones - Can We Talk?
5.0 Calendar of
Events
6.0 CLECs and
ASPs - A Marriage of Necessity
7.0 VCs as Kings
or King-Makers
8.0 Apply to
Present at a NetSuds or MedicalSuds Entrepreneurs Breakfast
9.0 Tidbits
10.0 MinnesotaBusiness
After Hours
11.0 NetSuds Partner Program
12.0 The Value Chain
13.0 Guest Writers for
this Report
1.0 Heard on the Net
1.1 People on the Move:
Please email: people@netsuds.com to report a change in your
job status if you are
moving from or to a company in the
"com or .com"
space.
NetSudser Sig Muller joined
Cherry Tree Development as a Principal.
Cherry Tree
Development is a venture development company. You can
contact Sig at either sig@cherrytree.com or at 952.893.9012.
NetSudser and affiliate Joan Moser
has changed the name of her firm
from Joan Moser
Associates to Spoken Impact. In addition, she has
expanded her services.
Joan has provided coaching services to many
of the entrepreneurs
who have presented at NetSuds events. Contact
Joan at either joan.moser@spokenimpact.com or 612-377-3686.
NetSudser Mike Ellsworth recently
started Stratvantage Consulting,
based in St. Louis
Park, to focus on Internet strategy, permission
marketing and
newsletter and white paper creation. Prior to
starting Stratvantage,
Mike was employed as VP of Strategic
Planning with
VirtualFund of Eden Prairie. Contact Mike at either
mellsworth@stratvantage.com or 952-525-1584.
NetSudser Lonny J. Gulden, former
Midwest Regional Sales Manager
for Lockheed Martin
Global Telecommunications, recently left as
part of a mass
reduction in force and is looking for a sales
management position in
hardware, software or services. He can be
contacted at 612-867-3560
or lgulden@deepvalley.com.
NetSudser Darren "Dag" Cox
is the new VP of Strategic Development
at IQ Universe in
Minneapolis. You can contact Dag at either
612-362-8411 or at dag@iqtrust.com.
NetSudser Pankaj Kumar,
accomplished Class 5 Switch engineer is
looking to relocate to
the USA. Email pankaj_chauhan@yahoo.com.
NetSudser Ramesh Ajitaprasad,
formerly with ADC, is the VP & CTO
of Vitesse Networks (renamed
to Origix). Ramesh interned at
NetSuds and networked
his way to his current position. Contact
Ramesh at either 612.252.2304
or ramesh@origix.net.
NetSudser Mike Peterson, former
Business Development Manager with
ITRadar/TechRepublic,
has now joined Search Wizards, Inc. as Sr.
Account Manager /
Technical Recruiter where he specializes in
placing hardware and
software engineers in internet infrastructure
companies. You
can contact Mike at 612.281.1334.
NetSudser Tim Roesler is now Vice
President-Underwriting Sales at
Minnesota Public Radio.
He was formerly Director-Regional Sales
with Internet
Broadcasting Systems. Email him at troesler@mpr.org
NetSudser Michelle Gjerde, former
Communications Director for
Digital River, has
started a high-tech PR consulting firm called
Propeller Public
Relations. Michelle provides counsel, strategy and
execution of
communications and PR programs for technology companies.
Contact Michelle at mgjerde@mediaone.net.
DC iSudser Laura Wyatt was
formerly an HR Generalist for e-centives
in Bethesda, MD when
they went through a reduction in force. She is
seeking a Generalist
role in a stable, corporate environment in the
DC Metro area.
She can be contacted at trovite@hotmail.com.
NetSudser Alethea Stern is now
the Corporate Marketing Manager for
Norstan in Minnetonka.
You can contact her at either 952.352.1106 or
alethea.stern@norstan.com.
1.2 Companies
on the Move:
Please email: start-ups@netsuds.com to report (1) the
formation of a new
start-up, (2) momentum change at an
existing start-up, (3)
addition of key hires, or (4) a funding
event at a start-up.
Please give details on the above
including any
information you do not want made public. We
are very discrete.
NetSudser Ted Stockwell, ex-founder
of Roundview, has been promoted
to Director of
Software at Bravara - www.bravara.com - and is looking
to hire software
engineers with experience in routing, switching
and telecom.
Contact Ted at 651-698-4611 x519 or ted@bravara.com.
NetSudser Dan Bye, CEO of
Veracity Communications, has closed its
first found of angel
funding with a $200,000 seed capital investment
from Convexity, LLC in
Fargo, ND. Contact Dan at Dan.Bye@vcci.com
or 612.386.7907.
Voom Technologies
names Stewart Siebell, formerly President of
MetaFarms,
as the new President
and CEO. Steward is replacing acting CEO and
founder David
Biessener, who is now Voom's chief technology officer.
Voom recently
announced raising $615,000 from individual investors.
NetSudser Peggy Walsh, formerly
of Roundview and Zhone, along with
her husband Warren,
have a new baby girl, Meghan Elizabeth.
Meghan is, I'm sure,
the new CEO of the family.
2.0 Jobs in the "com and .com" Market
Please email: jobs@netsuds.com to report job openings in the
"com and .com"
Market. In the body of the message, give the
name of the company
and a URL link to the job postings.
* Solonis http://www.solonis.com/jobopenings.asp
* Octiv http://www.octiv.com/jobs_body.html
*** Integra Telecom http://www.integratelecom.com/careers/index.shtml
*** HighJump SW http://www.highjumpsoftware.com/careers/opportunities.htm
3.0 NetSuds on Tour - No Tours This Month!
NetSuds loves on-site tours! Email me if you
want to show off your
company. I can
be reached at matt@netsuds.com.
4.0 Primary Line Phones - Can We Talk?
Every analog phone line to your home is fed on a copper line. It
is
fed by a -48 volt DC
circuit so that even when AC power is "out" in
your neighborhood,
your phone will still work. It is an emergency
service. I think
it has outlived its usefulness.
Oh sure, it's great to
have this feature but can we live without it?
Or make it an optional
feature that people pay a premium for? Or if
some people are
disabled, make it a subsidized benefit.
The power company, e.g.
Xcel Energy is our local utility. Why should
Qwest have to provide
electrical power (albeit just for our
phone(s)) when Xcel
fails to do so? Do we require Xcel to provide
phone service when our
Qwest phone line is broken? No one would even
think of requiring
Xcel to do this.
It would probably be
cheaper to provide everyone with an emergency
cell phone (it is
charged and ready to go) than it would to provide
a reliable -48 V DC 24x7x365.
I consider my cell phone my emergency
phone anyway.
Given today's cell phone technology, E911 services
should be location-dependent,
i.e. when I dial 911, they should be
able to route me to
the closest emergency center located from the
cell coverage area I
am calling from. It's called a "location-based
service".
Let's talk video for a
second in order to emphasize my point about
wireless (cell) phones.
The video and voice networks were actually
engineered out-of-phase
from the beginning and are slowing coming
back to normalcy.
Video is a high-bandwidth source and is most
often delivered to a
stationary device (a TV). It should never have
been built on a
wireless broadcast network. It was meant for cable
(wires) from the
beginning. But NO ... we had to mess with TV
antennaes and rabbit
ears for decades. Then dig up our streets to
lay coaxial cable
years later.
Voice, on the
other hand, should have always followed the user. It
truly is a mobile
application. Therefore, it is primarily a wireless
unicast application
where mobility is a key feature.
I'm not naive. I
know why the 2 applications developed the way that
they did. It
made sense for the times. But not for now. Back then,
we had 3 broadcasters
of video; NBC, ABC and ESPN (gotcha!). It took
a fixed amount of
spectrum. And phones were meant to be shared by
at least a family and,
in some cases, by a "party line". Nobody
thought much about a
phone strapped to your hip and ringing during
a dinner date.
Now, we have essentially disposable cellular phones
and many people have
multiple landline and cellular phones and phone
numbers.
Given the choice, I
would get my primary phone service over a broadband
connection and plug my
cell phone in to a (www.cellsocket.com) device
when I was at home or
work. The day is coming.
5.0 Schedule of Events
5.1 - Minnesota
8/16 The
Depot - MedicalSuds Evening Gathering
http://www.medicalsuds.com/eg/
9/?? XO
Communications - NetSuds Evening Gathering
http://www.netsuds.com/netsuds/
11/15 Hotel
Sofitel - MedicalSuds Evening Gathering
TBA
5.2 - Outside
Minnesota (iSuds)
8/14 Richardson,
TX - iSuds Evening Gathering
http://www.isuds.com/dfw/isuds/
8/?? Virginia
- iSuds Evening Gathering
http://www.isuds.com/
10/1 San
Jose, CA - iSuds Entrepreneurs Lunch
http://www.isuds.com/bbhome/
10/15 Atlanta -
Entrepreneurs Training Camp
http://www.isuds.com/etc/2k1/ga/october
10/17 Atlanta -
Entrepreneurs Lunch
http://www.isuds.com/von/el/
5.3 - pulver.com Events - http://www.pulver.com/conference/index.html
9/10- Austin, TX
- Session Initiation Protocol Summit
9/13 http://www.pulver.com/sipsummit2001/
10/1-
Washington, DC - Telecom Policy Summit
10/2 http://www.pulver.com/policysummit/
10/1- San Jose,
CA - Broadband Home Fall Conference
10/3 http://www.thebroadbandhome.com/bbhfall/
10/15- Atlanta, GA -
Fall 2001 Voice On the 'Net (VON) Conference
10/18 http://www.pulver.com/von/
10/29- Santa Clara, CA
- Location Based Services Summit
10/30 http://www.pulver.com/lbs/
10/29- Santa Clara, CA
- Presence and Instant Messaging Conference
11/1 http://www.pulver.com/pim/
11/12- Hong Kong,
China - VON Asia 2001
11/14 http://www.pulver.com/asia2001/
12/4- San Diego,
CA - Softswitch Expo 2001
12/6 http://www.pulver.com/softswitch/
5.4 - Non-NetSuds Events
9/12
Golden, Valley - MinnesotaBusiness After Hours
http://www.minnesotabusiness.com/afterhours.htm
9/13
Fairfield, Iowa - Silicorn Alley VC Conference
Contact matt@netsuds.com for details TBA
6.0 CLECs and ASPs - A Marriage of Necessity
For businesses, the
recent proliferation of CLECs (competitive local
exchange carriers),
i.e. competitors to Qwest, in the Twin Cities
area has provided some
great prices and services. For those wanting
T1s to OC-3s, voice
and data, one can choose from Qwest, Integra
Telecom, XO
Communications, Onvoy, Time Warner Telecom, Allegiance,
Eschelon, Focal
Communications, KMC Telecom, McLeod USA and a few
others. You can
get a voice solution, e.g. digital and analog. You
can get data in
dedicated bandwidth, frame relay, ATM, etc. You can
get web hosting.
CLECs are the plumbers of our industry.
They
deliver "pipes"
to our businesses over which voice and data flow.
We also have some
ASPs; whether they still like that term or not, I
shall use it loosely
to refer to companies like Agiliti, Wizmo,
Intranet Solutions,
Jamcracker and LoudCloud. In theory, you can get
hosted software
solutions, desktop management, service and support.
In some cases, they
act like an outsourced IT department. In other
cases, they provide
rentable software. Call it what you want, define
it with 33 flavors of
variety. In essence, you are getting services
over your "pipes".
While the CLECs
differentiate themselves with price, bandwidth,
reliability,
scalablity and national reach, they do little in terms of
providing ASP-like
services.
The ASPs rarely offer
to provide you with the "pipes" but assume you
have a "pipe"
that they can pump their water over (services). The most
notable
exception is Agiliti which actually purchased gofast.net
- an ISP with a great
reputation serving the business
community with
ISDN, frame relay, DSL (one of the first) and
dedicated data
services. At one point it was rumored that Agiliti was
going to sell the
gofast.net asset as it became a pure-play ASP. It
would have been a bad
move.
The most
compelling differentiation in today's market for a CLEC or ASP
would be to start
partnering and offering a full service package.
Customers like
companies who solve their problems. A service package
which provides "pipes"
and "water" together is compelling.
If I was an ASP, I
would be scrambling like mad to partner with every
CLEC in town.
I'll predict those that do will be rewarded. CEOs like
Tom Kieffer of Agiliti
understand the value of this, I believe. I
wouldn't be surprised
to see some announcements and roll-outs in the
very near future.
If I was a CLEC, I'd
be a little more cautious in picking ASPs to partner
with. But I
would do it.
There's Matt's
business development idea for the month. Happy networking!
7.0 VCs as Kings or King-Makers
A venture capitalist
helps entrepreneurs realize their visions of
changing the world and
making lots of money. Jeff Bezos, Marc
Andreesen, David Filo,
Wu-Fu Chen are some examples of the kings
created in part by the
king-makers. They are all successful
entrepreneus who have
gained venture capital to grow their
companies. And
probably none of us know the king-makers, the
venture capitalists
who backed them. They acted as the political
consultants and fund-raisers
who propelled the candidates to
their titles as kings.
Then why are some VCs
being accorded king status lately? Sure, it
was more pronounced 1-2
years ago when people like John Doerr,
Geoffrey Moore, Ann
Winblad and others were accorded king
status while some of
the CEOs in their portfolio companies were
only mere princes and
princesses.
Now the CEOs
are being turned over and recycled. The VCs are
keeping a lower
profile. Not too many kings. Fewer king-makers
these days.
Meanwhile, people with
visions of changing the way the world works
are still toiling away.
We call them entrepreneurs. They don't
think of being kings;
just having a big impact. If they get VC
funding, they have a
better chance at executing their strategy.
Sometimes the VCs get
in the way but most of the time, they provide
real assistance.
Up until about 6
months ago, I had witnessed serveral VCs who had
"King
Syndrome". It was a disease of the ego
manifested in arrogant
behavior and bulging
bank accounts. The swagger is gone and much
of the paper gain has
dwindled. Many of them were crediting
themselves with
creating companies with big IPOs and rising stock
prices. Not many
of them are willing to admit they funded companies
which have either
folded or have never shown a profit. A lot of
them were in for the
quick hit and were part of the irrational
exuberance fueld by
real-world IPOs which made many 100-millionaires.
So, we start over with
real business plans. We start with intense
scrutiny from venture
capitalists. We start with seasoned teams of
executives who have a
good track record.
The missing
element is the venture capitalist who is willing to accept
some lead time on ROI.
It may be 4-7 years before a newly-funded
start-up creates a
liquidity event for a venture capitalist. They
still seem hesitant to
pull the trigger on these early-stage deals.
Meanwhile,
entrepreneurs are pulling back a little. The best ones are
in their home offices
and skunkworks making cool products which solve
real problems.
They are self-funded or funded by what jokingly was
once referred to as "friends,
fools and family".
The best VCs are those
that truly understand their role. They don't
run companies.
They don't make sales. They don't manufacture. They
don't design.
They are not kings. But they can be king-makers.
8.0 Apply to Present at a MedicalSuds or NetSuds Entrepreneurs Breakfast
Every month since Autumn 1999 NetSuds has had an Entrepreneurs
Breakfast (see http://www.netsuds.com/eb/ for past and current
events). If you
are a pre-IPO "com or .com" start-up, you can apply
to present your
company to the investment community at a future
breakfast event.
Apply online at http://www.netsuds.com/eb
Apply to present at a MedicalSuds Entrepreneurs Breakfast (coming soon)
at http://formmail.to/medsuds
9.0 Tidbits
9.1
Satellite Radio - www.xmradio.com
I think these guys are
on to something here. 100 crystal-clear radio
channels available
anywhere in the country. OK, the radio is pricy.
Yes, there is a
monthly subscription charge of $10. I looked at their
programming and
thought it was OK, not great. I like AM Radio so I
saw a big hole in
their roll-out. I would think they would want to
satellite-broadcast
major market stations so people in LA can get a
NY station, etc.
To take their concept a step further, I suggest they
consider
making it IP-based and use cell-phone technology in the
radio.
Then you can get any
radio station with an streaming audio source and
cell phone service
providers can get an additional revenue stream.
There is a market for
people who want to tune it to a hometown radio
station anywhere in
the world.
9.2
Allete, Minnesota Power, MPTelecom, Enventis
Allete, the Duluth-based
parent company of Minnesota Power appears ready
to roll out more voice
and data services after they acquired
Plymouth-based
Enventis. Enventis will operate as a subsidiary of MP
Telecom. Check
out www.mptelecom.com/map/.
9.3
Broadband Experiences - Part 2
My DSL provider at my
lake cabin is Loretel. I am continually
impressed by this
company. They buried my copper DSL line a few weeks
ago. I wasn't
around. They severed a power line buried in the path
of the DSL line.
I didn't notice because it was for my detached garage.
When I did notice, I
didn't realize it was the Loritel trench that did
the damage so I hired
an electrician to fix the power line. That's when
we discovered the
source of the problem. Even though they were not
legally liable for the
severed power line, Loretel agreed to pay my
electrician bill.
This is the same company who gave me a set time (not
8-12 or 1-5, but 9:45
am) for my installation and whose service has not
crashed or slowed.
This is the same company who answers the phone with
a real person and
solves my problems for me in a friendly, folksy manner.
www.loretel.com
10.0 MinnesotaBusiness After Hours
NetSuds is proud to partner with MinnesotaBusiness
Magazine in promoting
the After Hours events.
This general business networking event, while
not focused on the
telecom, datacom, IT or Internet market is the premier
general business
networking event in the Twin Cities. For more
information, see http://www.minnesotabusiness.com/afterhours.htm.
The next After Hours
event is Wednesday, September 12 from 5-8 pm at the
Metropolitan,
5418 Wayzata Boulevard, Golden Valley. It is free for
attendees, includes
complimentary appetizers and a cash bar. Between
400 and 600 business
professionals and 80 exhibitors are expected. There
are fee-based exhibit
opportunities. For information on exhibiting,
contact Barb at either
barbl@minnesotabusiness.com or 952.844.0400 x111.
11.0 NetSuds Partner Program
A new feature of NetSuds is the Partner Program. The Partner
Program is
a system by which
companies and individuals who are part of the NetSuds
network and are well
known as reputable and competent are promoted by
NetSuds. These companies and individuals
must apply to be a part of the
program. In
addition, NetSuds does benefit financially from transactions
involved through the
Partner Program. To be considered for the NetSuds
Partner Program,
contact matt@netsuds.com.
See http://www.netsuds.com/partner/ for our launch. The first partner in
the program is Abrena.
Abrena is a business development company that
provides services for Northern
European technology companies that want to
expand to North
America. Abrena will also assist North American
companies
that wish to pursue or
test market their technology products in the highly
sophisticated and
technologically advanced Nordic market prior to entering
the continental
European marketplace.
12.0 The Value Chain
What burst in the dot-com
bubble? It wasn't just one thing.
What I have noticed in
the last year is the breakdown in what I refer to
as the "value
chain". This is a simple concept. Between raw
resource and
finished product, many
imtermediate steps are required. Along this chain
of events, many
interemediate companies are required to add value to the
final product.
If one company along the chain can't provide value, it
ceases to be part of
the chain or it operates at a loss.
If you can make a tire
for General Motors which costs 20% less than your
competitor, GM will
probably use your tire. It reduces the final cost of
the automobile while
not reducing it's sales price. If your potatos
(Dan, did I spell that
correctly?) cost less than your competitors', they
may end up as a
McDonald french fry. Your potatos are part of the value
chain for that
McDonald's fry.
If your eBusiness
software solution costs $1,000,000 but only provides
$50,000 worth of
measurable ROI in the value chain on a yearly basis,
you probably won't
make it in the value chain. Back when websites
were
being built out of
fear, rather than economic sense, some companies were
willing to swallow
hard and pay the price necessary to have scale,
personalization, huge
catalogs, extensive marketing campaigns, etc. Who
wanted to be made a
dinosaur by priceline.com, amazon.com or pets.com?
Companies were
betting, not thinking.
I remember calculating
the market capitalization of the 3 largest US
airlines a few years
ago. Priceline.com was valued more than
their sum
total. We all
should have stopped for a second and evaluated.
In today's market, we
are possibly too conscious of ROI. Job cutting and
cost cutting seem to
have been taken to extreme. Two years ago, no one
wanted to be left
behind. Build, build, build. First to market ...
First
to scale ... First to
IPO. Now we almost see a daily barrage of companies
trying to impress
investors with the number of employees they have fired.
Reduce the burn rate
... First to profitability ... Lean and mean. I'm
starting to have
flashbacks of the defense industry meltdown of the 1980s.
When launching a new
company or a new product within an existing company,
ask yourself
some of the following questions. First, is my
product of
value to someone else
and is there a compelling - practically necessary -
reason for a customer
to buy it? Second, is my product as good or better
than the competitor's
product? Third, how can I measure my projected
results objectively?
If you can answer these questions, you have a grasp
on the concept of a
value chain.
If not, would you like
a deal on a complete 500-user X.25 network?
13.0 Guest Writers for This Report
I have opened up the Monthly NetSuds Report to guest writers. If
you have a passion for
a topic, and you can write (at least no worse
than me), send an
email to me at matt@netsuds.com. You can even send
copies of your work.
It needs to be on "com and .com" topics and can
include entrepreneur/investor
activities. Good information from our
service providers and
vendors is also welcome so long as it is not a
"commercial"
for any one company or individual.
We will consider both
sponsored and unsponsored columnists and guest writers.
If you are aware of others who
would like to receive the NetSuds Report, ask them to visit http://mailman.netsuds.com/ to subscribe or unsubscribe.
Please send your comments and feedback regarding this issue of
the NetSuds Report to matt@netsuds.com.
Matt Noah
P.O. Box 277
Chanhassen, MN 55317
952.934.5424
fax: 425.795.2019
matt@netsuds.com
(c) 2000, 2001 NetSuds.com, Inc. All Rights Reserved.
We help people build and enhance their network of contacts in the
"com and .com" world.
