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The NetSuds (TM) Report
The July 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 - Cisco, XO & Coherent
Solutions
4.0 Now you ADC
it, Now you Don't
5.0 Calendar of
Events
6.0 Venture or Vulture
Capital?
7.0 Employment
Brand
8.0 Apply to
Present at a NetSuds or MedicalSuds Entrepreneurs Breakfast
9.0 Tidbits
10.0 Keeping a Low
Profile
11.0 An Entrepreneur's
Recipe for Success
12.0 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.
Ex-ADC Engineer/Manager/Director/VP/GM Todd C. Ortberg
is now
a General Partner/Managing
Director at Coral Ventures in
Minneapolis.
Contact Todd at tortberg@coralventures.com or
612.335.8697. I
witnessed Todd's meteroic rise within ADC and
welcome him as another
investor in the Twin Cities.
NetSudser Connie Sjoquist,
formerly with B2BXchange.Net is now a
Sales Executive with
the Manley Group. Contact Connie at
constance.sjoquist@manleygroup.com.
NetSudser Dan McCreary has joined
Netsource America as their new
Director of Marketing.
Contact Dan at dmccreary@mediaone.net.
For more information
on Netsource see http://www.netsourceamerica.com.
NetSudser Mike Noer, former VP of
Marketing for InterSec
Communications is
looking for a new opportunity in a marketing
leadership role.
Email him at mnoer@mediaone.net or access
his resume at http://people.mn.mediaone.net/mnoer/home.html.
NetSudser Larry Piumbroeck has
joined XO Communications of Minnesota
as Vice-President /
General Manager. Larry was most recently
Director of Commercial
Sales for Seren Innovations. Contact Larry
at larry.a.piumbroeck@xo.com.
NetSudser Charles "Chuck"
Pearson is the new Sales Manager for XO
Communications
Minnesota. Chuck joins XO from Norstan Communications
and MCI where he held
numerous positions in sales, management and
marketing.
NetSudser Jennifer Zick recently
opened shop as Advent Consulting,
based in St. Louis
Park. Advent's focus is marketing and branding,
offering design and
copy writing services. Prior to starting
Advent, Jennifer was
employed as the Director of Business
Development with
Cazarin Web Group, inc. of Wayzata. Contact
Jennifer at jennifer@advent-consulting.com.
NetSudser Brent Robbins left
Wyncrest Capital and is now with the
legal department of
The Pillsbury Company. You can reach him at
(612) 330-4195 brent.robbins@pillsbury.com.
NetSudser Roger Ritten, Sales
Director at a local privately-held
IT firm which
downsized recently, is looking for his next
opportunity.
Others in the same Sales Department of this company
are available.
Contact Roger at either 612-382-6899 or via e-mail
at roger8100@hotmail.com.
DC iSudser Tom Griffith, mrgriff@pressroom.com, reports that his
employer, "IPOptical,
has run out of venture capital money, and
everyone's been laid
off effective today" (6/26/01). Tom is a senior
SW engineer, Program
Manager and telecom engineer and wants to stay
in the DC area.
If you are a tech worker or executive looking for your next
"big thing"
consider interning at the NetSuds office.
NetSuds sees lots of great opportunities every day
in the
start-up AND public
company markets. To find out what it
takes to be an intern,
see http://www.netsuds.com/intern.htm
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.
Boomerang Marketing, after 2 rounds of venture/angel financing
through garage.com,
could not raise a third round of funding
and have sold their
assets and wound down.
Breakstep.
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.
** Integra Telecom http://www.integratelecom.com/careers/index.shtml
** HighJump SW http://www.highjumpsoftware.com/careers/opportunities.htm
3.0 NetSuds on Tour - Cisco, XO and Coherent Solutions
NetSuds loves on-site tours! Email me if you
want to show off your
company. I can
be reached at matt@netsuds.com.
3.1 Cisco
So, everyone knows about Cisco and their status as king of
datacom and
telecom. And
most everyone knows about the high profile acquisition of
NuSpeed in 2000,
making Minnesota the center of their SAN product
development. But
in St. Paul, 30 software engineers and test
technicians
are quietly working on
next generation "core routing"
technology. Yes,
you heard right.
"Core routing" technology ... in St. Paul. Far
removed
from your TCP/IP stack
running in your Windows OS on your desktop, bits
are moved at light
speed (fiber optics) through the core of the Internet;
the big fat pipes
whose names typically start with "OC" and end with a
number like -12, -48,
-192 and -768. And there sits the Cisco routers
whose software makes
the critical decisions on routes, priorities and
administration.
I can't tell you too much about my tour or they wouldn't have let
me in
the door.
Suffice it to say it is further evidence that the Twin Cities
has some very
respectable software and protocol engineers. Some work
at Cisco. You
can find others at Optical Solutions, Bravara, Caspian
Networks, CNT and a
smattering of other places. Even though our largest
telecom company is
ADC, you won't find any there. ADC sits more around
"Layer 0 and 1";
the connectors, plugs, jacks, patch panels, etc. that
physically connect the
routers, switches, channel banks and ADMs of the
network.
And they have wonderful office space overlooking the Landmark
Center.
Many thanks to Stuart
Stanley, stuarts@cisco.com, for the tour.
3.2 XO
I recently toured my 3rd facilities-based CLEC (competitive
local
exchange carrier).
I previously reported on Focal and Time Warner
Telecom. I have
been impressed by all three CLECs and that includes
my latest tour at XO
near downtown Minneapolis. Many thanks to Larry
Piumbroeck - larry.a.piumbroeck@xo.com - for arranging the tour. Also,
thanks to Chuck
Pearson, Sales, charles.j.pearson@xo.com and John Unger,
Ops/Engineering, junger@xo.com
for the technical and sales insights.
There is great local
competition to Qwest for business customers in the
Twin Cities.
Besides the three mentioned, Allegiance, KMC, Eschelon,
Intengra, McLeod and
perhaps some others are fiercely competing in the
business marketplace.
Often, these CLECs find their toughest competition
is each other, not
Qwest!
XO actually has an
international footprint and is backed by the cellular
phone services pioneer
Craig McCaw. They haven't "lit"
their network in
the Twin Cities to
date but look for a late Summer lighting.
XO shares many of the
same characteristics as its CLEC bretherns. In
fact, it is
interesting to note how it is quite clear that service
providers always buy
"best in class" when building their
communication
centers. ADC
always seems to win at connectivity so there are plenty of
ADC fiberguides
keeping the place neat and manageable. Nortel
wins with
the big telco switch.
Sonus Networks' cool new IP telco switch is
present
as are Carrier
Access channel banks. Tellabs
wins with its DACS solution.
Poor Lucent
seems to be getting shut out of more CLEC facilities although
XO had some Lucent
power solutions equipment.
One can't help but be
impressed by the size of the XO facility. The level
of investment is on
the order of tens of millions of dollars before
one
paying customer is
billed. And for all of you job-seekers, they are
hiring
like crazy right now.
A few characteristics
distinguish XO. Besides owning their multi-ring
network in the Twin
Cities, they also are deploying an LMDS (local
multi-point
distribution system) ultra-broadband wireless system to reach
those companies *close*
but not fiber-accessible to their fiber network.
LMDS is the big
brother to MMDS (in essence, wireless DSL). XO also
has
multiple rings
in their conduit so not only can they offer traditional
OC-N
services but they can also offer "IP over Glass"
& 10Gig Ethernet.
Sometime, I want to
take all the NetSudsers on a tour with me. Perhaps we
can hook a Windows PC
directly off of a fiber ring and browse the web
... at the speed of
light.
3.3
Coherent Solutions
I met with Igor
Epshteyn, Managing Partner, at Coherent Solutions in
Minnetonka, igore@cosol.com for a tour of their software. Software
tours are quite a bit
different than a tour of a CLEC, as you can
imagine.
I can truly relate to
what Coherent Solutions is doing with their
event
community software, though. In fact, you should be
able to test
drive their software
soon as I plan to use it to create e-Community
at NetSuds and MedicalSuds events. Imagine, as
a sponsor, having the
ability to target
certain demographically important attendees at an
event with a certain
message; either a downloadable ebrochure or
epresentation or
edatasheet. Or send them an email when you are set
to do an important
demo. Imagine as an attendee being able to search
through the database
of conference sessions, exhibits and attendees to
get the important
information or contacts you need to do your
business some good.
Enter Coherent Solutions.
If it functions as
promised and as demonstrated, it won't stop there.
You can choose to have
certain information delivered to your PDA,
other information
delivered to your cell phone; either as a "call"
or as a short text
message. Or you can have it delivered that old
fashioned way ... on
the Internet through a browser!
Let's say you are
embarking on a patent filing and your attorney is
booked solid.
You go to a NetSuds event and you search the database
of attendees who fit
the "attorney" category. You find 12. You
can
send each an email in
advance and ask to meet with each for 3-5 minutes
at pre-arranged times.
Or you can email each and filter out the ones
who don't meet your
criteria on technology, availability or expertise.
Another example is an
entrepreneur who wants to meet all the angel
investors, venture
capitalists or executives looking to join a startup
company. Got it?
The Coherent Solutions
software can be purchased as a software
solution or rented in
an ASP model. I hope you can experience it
soon.
4.0 Now you ADC it, Now you Don't
ADC is our technological king of telecom in Minnesota but the
king
is being assaulted.
Once boasting over 22,000 employees worldwide,
ADC is
cutting, cutting and cutting. My old friends
report
nearly monthly layoffs
as entire divisions are sold or shutdown.
Morale is very low as
layoffs are seemingly never final, just a
part of weekly life.
While the fiber and copper connectivity group is still the core
of
ADC's business, there
have been production layoffs in that division.
The entire broadband
wireless group is gone or going. Sean Martin,
brought up from Dallas
just months ago to lead that group, is again
relocated, this time
to Tustin, CA to run the combined DSL business
that once was PairGain.
The cable telephony division scaled back
to the bone and is now
really run out of the Boston acquisition of
Broadband Access
Systems - voice and data over IP cable.
Many divisions are for sale according to my sources.
The once
industry-leading CSU/DSU
division known as ADC Kentrox is one such
division. The
cable transport division in Connecticut is close to
being sold as is the
Pittsburgh division in the wireless business.
This is a far
different ADC than that which existed just a year ago.
Besides the new
CEO, there are new people running Business
Development
and ADC now has a Chief
Marketing Officer, someone new.
The challenge
for ADC is to find the gems, if any, in the electronics
business and make hay.
Lucent is discounting it's Stinger DSLAM and
making life difficult
for ADC's Avidia DSLAM. IP Cable could be a
good play and I think
the cable companies represent true competition
to the ILECs (Qwest,
Verizon, SBC, Bell South). International sales
may be a big key to a
comeback.
ADC also needs to
start doing some smart marketing. Buying flashy
print ads is one of
the worst marketing strategies available. As
in politics and war,
you need a grass-roots (foot soldier) campaign.
That means getting
your best representatives in front of key
customers, speaking at
Conferences and participating more in events.
Look at how many
events Microsoft participates in; both in the Twin
Cities, regionally and
nationally. Now look at their stock price
relative to their
sector and relative to the telecom sector. When
was the last time you
heard Rick Roscitt, Lynn Davis,
Bob Switz or
Larry Ford
speak at a local event?
5.0 Schedule of Events
5.1 - Minnesota
8/16 The Depot
in Minneapolis - MedicalSuds Evening Gathering
http://www.medsuds.com/
5.2 - Outside Minnesota (iSuds by Jeff Pulver & Matt Noah)
8/14 Richardson,
TX - iSuds Evening Gathering
http://www.isuds.com/dfw/isuds/
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
7/23 Boston, MA - Summer 2001 VON Developers Conference
7/26
http://www.pulver.com/developers/
10/1 San Jose, CA - Broadband Home Fall 2001 Conference
10/3 http://www.thebroadbandhome.com/bbhfall/index.html
10/15 Atlanta, GA - Fall 2001 Voice On the 'Net (VON) Conference
10/18 http://www.pulver.com/von/
5.4 - Non-NetSuds Events
7/11
Mississippi River Cruise - Minnesota Business After Hours
http://www.minnesotabusiness.com/afterhours.htm
6.0 Venture or Vulture Capital?
There is no argument that venture capital provides a critical
element
of success in the
creation of new businesses in certain markets.
There is no argument
that the world's best venture capitalists reside
in the United States,
living and working in the world's most
capitalist country.
Besides Silicon Valley at the top, the regions
with the most VCs are
Boston, New York and Washington, D.C.
Then why do 9 out 10
entrepreneurs I deal with loathe this very
necessary and highly
successful group of people?
Angel investors do not
share this same fate. Nor do investment
bankers. Even
attorneys seem immune to this level of emotional
acrimony. What
is it about a venture capitalist?
For those not involved
in the business of creating companies or seeking
or dispensing venture
capital, this problem may seem like an
insignificant, if not
laughable problem. Who cares? Both classes of
people - venture
capitalists and entrepreneurs - are viewed as rich
businessmen who don't
care about the laborer (even if the laborer is a
$150,000/yr. hot-shot
Java developer!) or the problems of society.
The perception is they
just care about making more and more money.
A venture
capitalist is a member of a firm dedicated to providing
non-collateralized
private investments in a company with the goal of
achieving phenomenal
returns on their investment. Note that in this
definition there is
nothing mentioned about "building great companies",
"improving the
lives of ordinary people", "empowering people of vision"
or any other such
nonsense often-quoted on their webpages or in their
public speeches.
It starts with the
reality that entrepreneurs need money and influence
in order to execute
their vision for their company. VCs offer both, at
a price. Every
entrepreneur understands that. Since over 98% of
ventures are never
funded, you have a large pool of rejected people to
form the basis of the
"I hate VCs" club. Of the remainder, you
have a
large percentage of
entrepreneurs who believe that VCs extract too much
equity from the
company in exchange for the resources they bring to the
company. And
that's just one of the complaints you will hear form
entrepreneurs.
The rejected
entrepreneurs rarely get a formal or even informal report
from a VC as to why
they were rejected. "Wrong space", "small
market",
"unseasoned team",
"questionable intellectual property" are about as
much as any VC offers
a rejected entrepreneur unless the entrepreneur
at least made it to
the stage of getting a face-to-face meeting with a
VC. In that
case, the VC may offer some follow-up suggestions or advice.
Sometimes, this
contact is meant only to keep a potential relationship
open in case the
entrepreneur - who the VC may like - comes back with
another venture in the
coming years.
In fairness to the VC
firm who may be approached with 50 business plans
every day, they simply
can't spend a partner's time writing rejection
letters or emails.
But given their phenomenal returns lately, they
could probably hire
someone at an administrative level to write a polite
rejection email with
some standard suggestions or reasons for the
entrepreneur.
Even an email with some phrases like "wrong space" or
"small market"
might be of some help. The truth is, alot of VCs
spend
just 1-2 minutes on
some of these business plans, especially if they
came as a Word
attachment to an email from some unknown entrepreneur.
Let's further divide
the small camp of potential VC lovers. The
entrepreneur has just
gotten his VC round, opens his Board to the
investor and starts
using the funds he acquired. He no longer controls
his company, he shares
control. When the venture is going well, there
are usually few
complaints and everyone is happy. The entrepreneur is
a hero, the VC is a
hero and life is good. When the venture is not
going well (not all
venture-backed companies are acquired or go public),
chances are no one
owns up to the blame. The likely targets are the
entrepreneur, the
employees and the VC. Customers are customers and
the market is the
market. They can't be blamed. Usually the VC gets
assigned some blame by
the entrepreneur. After all, the VC is supposed
to be generating some
great customer and partner contacts, helping the
entrepreneur hire the
best executives and providing some busines acumen.
That's the "smart"
in smart money.
Then there are
the hours. Never have I heard of a VC bragging
about
how much time the
employees in their portfolio companies spend doing
community service or
spending time with their families. Quite often
I hear about "giving
up your life for 2-3 years", "12-hour days, 6
days per week",
"full parking lots at 9 pm" from entrepreneurs
reflecting on the so-called
glamorous life of working for a start-up.
Perhaps it would be
instructive to survey the parking lots at the VC
and VC-backed firms in
the Twin Cities some evening at 7 and 9 pm.
Personally, I find the
incredible demands on most venture-backed
startup companies to
be immoral. Dsyfunctional, broken families
result when parents
are not present to parent. And single people
have some right to
outside activities. There's more to life than
work. VCs and
executive management teams need to recognize some
responsibility for
this situation.
Entrepreneurs view VCs
as not working nearly as hard and as long as
the entrepreneurs and
their employees. This is an accurate perception
although many VCs work
very hard, too. So, when things are difficult
and the entrepreneur
is on an airplane 20 out of 30 days each month,
up until 10 pm
emailing from a hotel room, and the VC is having a
nice dinner with his
family or enjoying a round of golf, is it any
wonder that the
relationship between entrepreneur and VC is strained.
Even in the face of
success (IPO or acquisition), there is potential
for a souring of a
relationship. This is usually unfounded and related
to greed. I
remember when NuSpeed was acquired by Cisco in
2000 and
many people suggested
to me that NuSpeed sold out too early and for
too little. Some
blamed the NuSpeed management team. Others blamed
the VCs. It is
quite clear to me that NuSpeed and its financial
backers did an
extraordinary job in creating shareholder value for
everyone involved.
No blame here. Just unfounded greed.
And then there is the
VC who doesn't return a phone call from an
entrepreneur; not even
one phone call. This I find stupid and I am
sorry to say that some
of our local VCs do this on a regular basis.
A recent complaint I
have heard is that VCs are technologically
backward.
Entrepreneurs complain that their very leading-edge
technology is not
understood by a VC. There is probably an element
of truth to this
complaint in some cases since VCs tend to focus on
industry segments and
can't be experts even on all aspects of an
industry. In
this case, the entrepreneur may just be calling on
the wrong VC.
In Minnesota,
we are blessed some very good venture capitalists
but we don't have the
breadth nor the depth of places like Silicon
Valley, Boston, New
York or D.C. But I would argue that the
quality and quantity
of our VC community surpasses nearly all of
the surrounding region
including Chicago and Denver.
So, there are some
very logical and justifiable reasons to be in the
"I have VCs"
club. Yet, they are extremely valuable and a crucial
element to our
economy, especially in Minnesota.
Are they
vultures? No. A vulture does no work for a
meal but
enjoys the scraps that
the lions leave him anyway. A VC is more
like primordial slime.
From slime came life which evolved and
became great creatures.
But even some of the great creatures
met with death and
extinction. Don't blame the slime.
7.0 Employment Brand
KNOW IT OR NOT YOU ARE
CREATING AN EMPLOYMENT BRAND by NetSudser Liz
Sjaastad, lsjaastad@dsl-mn.com
Ever noticed that rumors about your company spread quickly,
particularly
the juicy, bad stuff?
If your employees think they are working in an
environment akin to a
"sweat shop," you can be certain that many of their
friends and colleagues
will soon hold the same belief. Before long, you
have a reputation that
will serve as a tremendous recruitment obstacle.
I advocate creating
and perpetuating an employment brand by paying
attention to your
culture and its ability to help you achieve your
business objectives.
The value may be intangible, but hardly invisible.
An employment brand is
reflective of your company's culture. More
specifically, it's
what people perceive your company culture to be. It's
defined by how people
see its values, by way of work behaviors and
decision-making, and
by your business vision - that idealistic, future
picture of the
organization.
As the leader of your
company, two of your main responsibilities are to:
1.
Create an employment brand - establishing what you stand for
2.
Perpetuate that brand - turning it into reality
Here are a few tips
that can help you in thinking about creating and
perpetuating an
employment brand and culture that works for you and your
business objectives.
Creating an
Employment Brand
1.
Clearly establish your organization's values and vision - put it
in writing!
2.
Involve your management team and key stakeholders for best
results
and buy-in.
3.
Be clear about the relationship of values and brand behaviors to
financial objectives.
Responsibility number
one, creating an employment brand is not a simple,
feel good-exercise.
The brand must be created to support your business
objectives. This
is true as it impacts both your ability to recruit the
appropriate talent and
your ability to motivate and retain them, as well.
Involving as many
people as possible in the process of creating the brand
will help make it real.
People who have contributed to the process and
who understand the
importance of the brand in building a profitable
company will be
valuable sponsors.
Perpetuating the
Employment Brand
1.
Market your brand externally through word of mouth, speaking
engagements, P.R., etc.
2.
Market your brand internally through recognition and reward
systems.
3.
Establish the management and communication systems that support
desired behaviors.
4.
Create brand-enforcing recruitment and selection strategies.
Speak about your
employment brand at every opportunity. Speaking
engagements,
interviews, casual conversations, client presentations, and
employee meetings all
offer the chance to perpetuate your brand.
In order to perpetuate
your brand internally, behaviors in the
organization must
consistently support your stated values. Not having the
appropriate
organizational structure and strategies to support your brand
behaviors can be as
damning as not having consciously established a brand.
Work your brand into
your performance evaluation process and recognize
those who are
perpetuating the brand through their work behaviors.
The smaller the
company, the more critical it is that new hires fit the
culture and are
comfortable with the employment brand. Hiring a new
manager with different
values and conflicting leadership behaviors can
easily crush a newly
created brand in a small company. How do you make
sure this doesn't
happen to you? Be sure that your recruitment and
selection techniques
incorporate the characteristics of your employment
brand. Ask
yourself, will this person add or detract from your brand?
Avoid Common Mistakes
Many companies I have
worked with over the years have failed in the area
of culture building
and employment branding. Here are three examples of
common mistakes.
Company A ...
had a good employment brand idea and was able to sell it
to many prospective
employees, yet it lacked the key ingredients required
to turn brand strategy
into reality. Due to couple of key management
hires with
inappropriate leadership styles brought in during the
expansion phase, the
company perpetuated a culture that ran counter to
the expectations it
had established early on. Productivity and morale
plummeted, retention
required above market compensation practices, and
company performance
suffered.
Company B ... did
not believe in the value of paying attention to the
culture it was
creating. By focusing solely on the skills and experience
in the hiring and
performance evaluation process, the company ended up
with several
conflicting sub-cultures. Each department became its own
silo, with its own set
of values and beliefs. In this scenario the first
to suffer was the
customer. That is, until the two top revenue-producing
customers for the
company walked and Wall Street reacted.
Company C ... was
recreating itself but overlooked the need to market a
new brand.
Unfortunately, the sins of past management practices could
not be easily erased.
The word on the street is difficult to change.
The recruiters helping
the company attract new employees informed the
company representative
that recruiting for their company was unusually
difficult. They
told her, "The best and the brightest have choices.
They hear that your
company has poor management and the organization
pays no attention to
the growth and development of its employees."
Employment branding is
like branding a product and marketing it to your
customers. Yet,
unlike a traditional product brand, your employment
brand will create
itself if you do not. Your product is your culture
and your customers are
your employees. Your prospective customer is
everyone in your
market that hears about your culture. Many
organizations forget
the similarities between customers and employees
and how dependent they
are on each. Its best to assume your competition
is not forgetting this.
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 History of Computing in Minnesota
http://cbi.lib.umn.edu/exhibits/mncomputing/index.html
9.2 Startup.com
http://movies.yahoo.com/shop?d=hv&cf=info&id=1804383693
9.3 Personalization Isn't A Product (from Internet Week)
(Matt's Note: What does this say about Net
Perceptions?)
No set of e-business
applications has disappointed as much as
personalization has.
Now vendors and their customers are
realizing that truly
personalized Web commerce requires a
re-examination of
business processes and marketing strategies
as much as the
installation of shrink-wrapped software.
BroadVision, whose
software is designed to tailor commercial
Web sites to
individual customers, next week will launch a
consulting service to
help e-businesses craft a personalization
strategy around the
way users interact with their sites.
Such a practical
service is a departure from the "turnkey"
marketing miracles
BroadVision, Broadbase, E.piphany, Net
Perceptions and other
vendors once promised. Personalization
products, which modify
Web content to customers' stated
preferences or
behavior patterns, represent "the most overhyped,
underdelivered"
part of Net retailing, said Bill Bass, senior
vice president of e-commerce
at Lands' End. --Ted Kemp
Read on:
http://update.internetweek.com/cgi-bin4/flo?y=eDpj0BiHaO0V30OYg0Ay
9.4 UM Research Portal
9.5 MedicalSuds Launch
For those of you who signed up for the MedSuds email list, you
must re-sign up on the
MedicalSuds email list. Just browse over
to http://www.medicalsuds.com/ to get signed up. The 2
organizations
are not identical ...
at this time.
9.6 NetSuds StartupSoup
If you are an entrepreneur (e), or a serious
wannabee entrepreneur (swe),
then read
on. The following event is for es an swes only. No
VCs,
angels, PR, legal,
accounting, etc. allowed unless you want to, with high
probability, found a
"com or .com" company. NetSuds is going to start
a small group of es
and swes who will meet to (1) sift through very
early-stage business
ideas, (2) brainstorm, (3) network (with the idea
of team-forming) and
generally collaborate on creating new and
exciting businesses
here in Minnesota. The first NetSuds StartupSoup
has already taken
place. We're looking to add qualified people. You
need to submit a
resume and tell us where on a founding team you see
yourself fitting, e.g.
CEO, COO, CFO, CTO, VP (Sales, Marketing,
Engineering).
Submit your resume, etc. to startupsoup@netsuds.com.
9.7 Minnesota Business Magazine
NetSuds, MedicalSuds and Minnesota Business - www.minnesotabusiness.com -
are partnering to co-market
each other's products and services. If you
don't already
subscribe to Minnesota Business magazine, you
guessed it,
we recommend you do so.
Great content. Fun events. Good people. Look
for exclusive NetSuds and MedicalSuds content in Minnesota Business
magazine.
10.0 Keeping a Low Profile
by NetSudser and attorney Todd Taylor, ttaylor@lhdl.com
If you are about to start an advertising campaign while you are
conducting an offering
of your securities, beware. In some circumstances,
your local paper or
radio advertisements can get you in trouble. The
federal and state
securities laws may deem your advertisement an
impermissible "general
solicitation" in connection with your offering of
securities.
Both federal and state securities laws regulate how companies can
sell
their securities.
In most cases, companies cannot make any general
announcement to sell
their securities. The exceptions involve registered
public offerings of
securities, such as in an IPO, but even then some
limitations exist.
These laws prohibit any form of advertising in
connection with the
offer or sale of securities. The problem is drawing
the line between
legitimate product or services advertising and
impermissible
solicitation in connection with a securities offering.
Private
Offerings - You generally cannot use any
form of "general
solicitation" to
offer or sell securities when conducting a private
offering of securities.
While there is no definition of what a general
solicitation is,
generally, it is any advertising or marketing directed
towards potential
investors in connection with the offer or sale of a
security. The
Securities and Exchange Commission will look at the type
of publication, the
target audience, the history of prior advertising
and the timing of the
securities offering with the advertising campaign.
States also regulate
if and how you can advertise or market its
securities. Like
the SEC, most states prohibit private companies from
advertising their
securities to the public. Some states allow companies
to advertise to sell
their securities if the offering is being made only
to "accredited
investors" (i.e., wealthy). You should take great care
in making sure you are
complying with the appropriate state laws as a
state regulator is
quite likely to see your advertisement.
There is no bright
"do not cross" line, however, here are some
basic
rules to follow:
- Do not announce, in
any forum, that you are trying to sell securities,
or conduct
joint product and securities advertising. This is a clear
violation of
the prohibition on general solicitation.
- Issue press releases
only for significant, factual corporate events
and avoid
"hype." Otherwise, the press release may be seen
as indirect
advertising for
the securities.
- Read advertising
material and other public announcements carefully to
make sure that
all that is described is the product or service.
Describe the
products or services factually but do not elaborate on
target markets,
potential customers or projected revenue from their
sales.
- Do not include
investor relations contact information or mention that you
are currently
trying to raise money.
- Advertise products
or services in appropriate publications. If you sell
hammers,
advertise in home repair publications, not in the Wall Street
Journal
financial section. The SEC will look at how the potential
customers were
targeted versus potential investors and if the SEC finds
significant
overlap, the SEC may claim there was a violation.
- If you are about to
begin an offering of securities, it may be best to
delay any
advertising campaign until after the offering is over.
Unless
there is a
history of advertising, the advertising could be considered
part of an
effort to build awareness of the company among potential
investors.
If there is a well documented history of prior advertising,
then continue,
but be sure that the advertisements do not discuss
anything other
than the products or services and avoid any "hype"
about
the company.
Public
Offerings - If you are about to register
with the SEC for your
initial public
offering of securities, be aware that the SEC has rules
against "conditioning
the market." This involves conducting an advertising
campaign around the
same time as the IPO in an effort to increase public
awareness of the
company and possibly increase the market's awareness of
the upcoming IPO.
If the SEC believes that this is happening, it can
delay the IPO, forcing
a cooling off period while the effect of the
advertising campaign
leaves the market's awareness. If there is a history
of advertising, there
is not reason to stop just because you are about to
begin the IPO filing
process. As long as the new campaign is consistent
with prior campaigns,
the new campaign will not be seen as an attempt to
condition the market.
You may also continue to make announcements to the
press regarding
factual business and financial developments.
If you desire to use
general advertising to sell its securities, but
wishes to avoid the
high cost of conducting an IPO, you should consider
conducting a Small
Corporate Offering Registration or a Regulation A
offering. SCOR
and Regulation A offerings are hybrid public/private
offerings that allow
companies to raise up to $1,000,000 and $5,000,000,
respectively, while
using public advertising to sell their securities.
This allows the brewer
to advertise on its six-packs, the Internet company
to advertise on its
website, and the medical supply company to solicit its
suppliers,
distributors and customers. SCOR and Regulation A offerings
generally entail state
and federal filings that may be more complex than
private offerings.
However, for companies that have a loyal and large
customer base, have
limited funding needs in the near future and have
difficulty finding
outside fundraising assistance, SCOR and Regulation A
offerings may be a
good choice.
Conclusion
- Take great care when trying to simultaneously
promote
products or services
and offer securities. While you can do both
simultaneously, the
limitations on how you can do each and the potential
risks are high.
Most importantly, always review your advertisements or
press releases to
ensure that they are directed solely at potential
customers, and not
potential investors. You may wish to call a
securities attorney to
help you review your public announcements and
promotional material
so you can avoid the unpleasant telephone call
from the securities
regulators.
11.0 An Entrepreneur's Recipe for Success
By NetSudser Eric P. Strauss, eric@entrepreneursforhire.com
Over the past few years, I've looked at hundreds of business
concepts,
worked with more than
a dozen emerging companies, and started two
companies myself.
Along the way, I've discovered that cooking up a
successful business
from scratch is no easy task. Before you start
your next business,
learn from others' mistakes by following this
recipe for
success:
Preparation Time: 3 to
6 months
Cooking Time: 6 to 24
months
Serves: Millions
Ingredients:
One Fresh Idea:
At their core, successful businesses begin with a
fresh idea. Your
idea doesn't need to change the world; it just
needs to solve a
problem. Begin with a rotten idea and you're
headed for imminent
disaster. Flesh out your idea by peeling off
layer after layer
until you're left with just its essence.
One Quality
Advisory Board: Advisors will make introductions to
potential investors,
keep you focused on your business, and act as
a sounding board.
Don't skimp on the ingredients here; spend
plenty of time and
effort selecting, educating, and heeding the
advice of your
advisors.
One Solid
Revenue Model: Your revenue model will make or break
your
company. Test it
out on friends, business associates, and potential
customers. Hold
focus groups and distribute surveys. Make certain
that it can stand the
test of time, not to mention the critique of
your investors,
partners, and employees.
One Fistful of
Capital: Most emerging businesses are undercapitalized.
Avoid this predicament
by setting out to raise twice as much money as
you anticipate needing.
A good rule of thumb is, after completing
your business plan,
halve your revenue projections and double your
estimated expenses.
[Editor's (Matt's) Note: I feel the need to
disagree with Eric on
his last point. I believe creating realistic
revenue projections
and expenses is always appropriate; no need for
halving or doubling.
With regard to his first statement about under-
capitalization, his
statement is accurate in today's market. Two to
three years ago, it
was better to be underfunded because valuations
were rising
dramatically and funding sources were relatively
plentiful.]
One Seasoned
Management Team: Don't underestimate the need for a
'been there, done
that' management team. Just as executive chefs
require sous chefs,
pastry chefs, and other assorted kitchen staff to
prepare memorable
meals for their guests, so too should you set out
to surround yourself
with only the best people.
One Mouth-Watering
Marketing Plan: Few products sell themselves. A
tempting marketing
plan tucked away in your back pocket will whet your
investors' appetite
and create some sizzle when you're ready to launch
your product or
service.
One
Experienced Attorney: Don't leave home without one! If
you plan to
raise money from
investors, start by hiring an attorney to help you
navigate your way
through the complex securities laws, lest you end up
on the receiving end
of a lawsuit filed by a disgruntled investor.
Plenty of
Customers: Customers; often neglected or forgotten
altogether
in the business
planning process; are the most crucial ingredients on
the list. Don't
overestimate how excited your prospective customers
will be to pay for
your prodct or service. Impress your customers,
and the rest will be a
piece of cake.
Step-by-step
instructions:
Begin with a fresh
idea. Stir in an advisory board. Prepare the
revenue model in a
separate bowl and let stand until solid. Combine
fistful of capital
with advisory board and business model. Mix in
seasoned management
team. Knead mouth-watering marketing plan and put
aside until ready to
serve. Toss in attorney. Garnish with flawless
execution and serve
steaming hot. Note: If business model and advisory
board don't mix well,
start from scratch with fresh ingredients.
Eric P. Strauss is a
public relations and business strategy consultant
focusing on the needs
of emerging companies. He can be reached at
eric@entrepreneursforhire.com or www.EntrepreneursForHire.com.
12.0 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.
