Letter To IBM

Dear IBM:

Congratulations on your recent acquisition of Kenexa for $1.3B. The HCM application market has been steadily heating up and with SAP’s recent acquisition of SuccessFactors and Oracle’s purchase of Taleo, this looks like a good counter move.

Your announcement coupled with the recent news that Apple has become the most valuable company in the world prompted me to write this.

As I thought more about Apple and IBM and their respective positions in the current technology markets, I realized just how different the two companies are today from two decades ago.

Twenty years ago, when I worked for Apple as a young engineering director, IBM was “the” business information technology brand. Apple was nowhere – except in niche areas such as graphic design.

Under Steve Job’s leadership, beginning with his return to Apple in the mid-90’s, Apple emerged from near oblivion to become one of, if not ‘’the’, most powerful consumer – and business – technology brands.

Today, Apple’s products are used pervasively by people – at home and at work -  throughout the world. Apple has become the leading mobile platform developers target for consumer and business applications.

IBM, in the early 90’s, was faced with its own set of challenges stemming from poor financial controls, lack of innovation and other issues. Gerstner is appropriately credited with solving these and his successors – Palmisano and Rometty – have continued that success.

Now, IBM’s stock is at a near all time high, more than doubling over the past 3 years.  The Company invests in all the right buzz areas: Cloud Computing, Analytics, Mobile, etc. Wall Street is singing IBM’s praises.

Yet, in spite of all outward appearances, I respectfully submit that IBM may be headed toward another very rocky and challenging stretch of waters.

Do Venture Capitalists Suck?

Dave McClure, formerly with PayPal now at 500StartUps, posted a great article this past week he titled, “Scaling Venture Capital. We suck. We can do better.” I encourage you to read it.

Dave makes two points. The first point is that most venture capitalists are hypocrites. They expect entrepreneurs to build large, global companies while they as venture capitalists have never personally held an operational role nor built and scaled a large, global successful company.

I think it is this issue that tends to cause a lot of friction between entrepreneurs and venture capitalists and it is this point I am going to focus on here.

Are You Capitalizing Upon Your Social Media-ness?

I had a great meeting with Bindu Reddy last week. Bindu is the CEO of MyLikes and the former head of product management for Google Apps. Her husband and co-founder of MyLikes, Arvind Sundararajan, is the former tech lead for AdSense.

The premise behind MyLikes is simple: we are more likely to trust the recommendations of our friends, colleagues and advisors more than we trust consumer ads and the opinions of people we don’t know (with the exception of Hollywood celebrities and sports stars because, of course, we all know they are completely believable, role models for our children and extremely well educated – sarcasm intended).

Are Large Incumbents Structured and Motivated to Innovate? Spin Ins Might Help

I wrote about the dearth of innovation within large companies a couple years ago but I didn’t post anything in this blog on the topic. Based upon a number of conversations I’ve had lately, I thought I would dust off  and update what I’d said previously and reintroduce the idea here.

I look forward to any feedback you might have. 

Is Your Business Idea “8 Minute Abs” or “7 Minute Abs”?

For those of you who have seen the movie “There’s Something About Mary”  – the 1998 comedy starring Cameron Diaz, Ben Stiller and many other great actors/comedians - there is a scene where a hitchiker (Harland Williams) is picked up by Ted (Ben Stiller) and the hitchhiker – who the audience knows is a psychotic killer - starts telling Ted about his great new business idea: