Been a while….

It’s been a while since I made my last post. A number of people have actually noticed and asked, “What’s up?”

In fact my youngest daughter said, “Hey dad, you didn’t make the Forbes’ 10 Best Venture Capital Blogs for Entrepreneurs“. She works for Salesforce in Product Marketing and reads this stuff.

“Yea…thanks for pointing that out,” I said as if I hadn’t already seen the article and been contemplating on how to boost my ratings for next year.

She said, “You need to post regularly if you’re going to win these things, you know.”

I said, “Thanks for the marketing advice.” Having adult children who aren’t afraid to point out your failings can be extremely annoying. I need to remember this the next time I look at revising the Will.

I had thought about making some sort of lame excuse about “being busy” but the truth be told I just haven’t felt compelled to write a new post until now.

When I first started this blog 5 years ago, I said I wasn’t going to post anything unless I felt I had something substantive to comment on. And, as I went back through the posts I have done, for the most part, I think I have lived up to this original commitment. Although, a few of you have pointed out that some of what I have had to say is “a waste of digital ink”. Unquote.

Still, I feel compelled to continue with the blog. You have to put yourself out there and risk the negative comments in order to learn from others. Not always pleasant but I think it’s worth the trade-off.

So, what compels me to write this post is to solicit feedback on a recent deal I’ve done — one of 3 which has kept me busy and not making blog posts.

The deal I want to talk about is a new start up called Biba.

The CEO of Biba is Carlin Wiegner. Carlin was also the CEO of CubeTree (a previous investment of mine) which was acquired by SuccessFactors in 2010. SuccessFactors was purchased by SAP and CubeTree has become the undercarriage of SAP’s social strategy and is now called Jam.

Carlin’s big idea, and it’s a bold one, is to build a Unified Communications as a Service (UCaaS) company — one that is built on top of AWS and uses an entirely different business model — that will enable people and companies to seamlessly move from a variety of communication services such as: conference calling, video, screen sharing, messaging and chat.

Today, if you want to collaborate/communicate, you must either purchase/use a variety of discrete services that are not unified, such as: Intercall for conference calling, Skype for video, Webex for screen sharing, etc. and as you move from one service to another you must set up an entirely new and different session.  Or, you can invest in a Unified Communication (UC) system – such as MS Lync or Cisco Collaboration – and invest 10’s of $1,000’s – even $1M’s–  in hardware, software and the personnel to run it — even then, many features of the UC system only work as long as each member of the session belong to the same company.

This past Sunday TechCrunch posted an article titled, “Lync, Azure, Office 365 And the Shifting Center of Microsoft’s Gravity” where it states that MS Lync brought in $1B of revenue to Microsoft in FY2013. So, clearly companies are investing in their employees to provide better communication and collaboration.

My thesis for making the investment in Biba is as follows:

1. Market — This is a large and addressable market that has 2 large incumbents (Cisco and Microsoft) that have antiquated business models and architectures that are ripe for disruption. There are other providers of discrete services  and these represent 10’s of $1B’s in market opportunity.

2. Team — Carlin is a fantastic product executive and has built several fantastic product teams and delivered commercially-successful products (e.g. Brightmail, CubeTree)

3. Technology — Biba is building a brand new technology stack (from VOIP codecs to cloud-based back-end server utilities)  that could not have been produced even a few years ago.

The initial offering from Biba is focused on conference calling — other services will be added over time. The app is “free” and individuals can sign up themselves and invite others to use the service. However, getting individuals to use the service and then converting that usage into paid subscriptions from companies is a different matter.

This is a raw start up with zero credibility in corporations. Communications/collaboration isn’t something companies just turn to anyone to do. Communication vendors must demonstrate viability and reliability — “4 9’s” and “carrier-grade” are de rigueur.

So, my question to you is as follows:

If you were going to counsel the company on how to win corporations over (think about Box.net or Evernote — or Salesforce in their early days), what advice would you give to Carlin and his team?

The company – and I – have several ideas but I bet you may have some we haven’t thought of.

I look forward to your feedback.

 

  • Ken Chestnut

    Welcome back Bruce.

    First step is getting precise on the primary buyer. They could target IT with a “better, faster, cheaper” story relative to msft and csco. The challenge there is that IT will expect feature parity (and may still go with msft/csco since they are the incumbents).

    The next (obvious) target would be to go direct to end users. The key there is articulating how the service makes their lives easier. In the case of salespeople for example, can the service make them smarter relative to call prep and call execution? Does this improve with increased usage and/or users (hence justifying a paid version)?

    Given the challenges you identified, the latter is probably more viable. Developing specific use cases and scenarios is key (vs trying to offer a general platform).

    • http://www.interwest.com/software-as-a-service/ Bruce Cleveland

      Thanks, Ken. Much appreciated.

  • Ryan Leask

    Glad to see you’re blogging again Bruce, and thanks for sharing your investment thesis… it’s definitely compelling.

    As you mentioned, cost, reliability & vendor viability will be necessary table stakes for the Enterprise, but if those features plus “go direct to the user, then win over IT” was enough, Google Hangouts would be absolutely killing it. Of course there will be a lot of GTM considerations, but I think first things first, you need to make sure your product is 10x better. So here are a few thoughts on that:

    *** Simplicity ***
    – Eliminate access codes – Give me 1 number to dial in with for every single meeting (i.e. even when I’m not the host), and then auto direct me to the right meeting I am meant to be in at this time (no more trying to memorize and enter 10 digit numbers when driving!). Also give an option for the service to just automatically dial me when I need to join.

    – Eliminate background noise forever, and the “sorry I was on mute” – Mute everyone all the time, then auto unmute whenever someone starts speaking (optional override to stay on mute of course).

    – Eliminate the “can you move closer to the microphone” – Auto noise leveling – e.g. if someone is far from the microphone on a conf call, boost their volume instead of wasting time telling them you can’t hear them, getting them to move, etc.

    – Eliminate call overlap – When you have back to back conf calls, and the invitees from the second meeting start joining, keep them on hold until your first call is finished instead of having them join straight in. Would be a good “security” message for IT.

    *** Intelligence ***
    – Siri-style assistant running in the background of the meeting. You could say the words “remind me to follow up about XYZ” in the call & get a summary email after the call with all your action items (along with attendees, etc); say “start recording” instead of trying to remember the shortcut codes; transcribe the call; auto detect invitees (eliminate the “who just joined?”); dial someone else into the call; send SMS reminders to those who are late, etc.

    – Analytics (like Xobni for conf calls)

    – Pull data from your email history, conf call history, and LinkedIn & other sources on the people you are speaking with (like Rapportive for conf calls).

    *** Platform ***
    – No client-side plugins for any web app (Quora qn on why Hangouts requires a plugin: http://www.quora.com/Google+-Hangouts/Why-do-Hangouts-in-Google+-use-a-new-plugin-for-webcams-and-voice-instead-of-Flash). One less issue for IT to worry about if you can do it.

    – Make the product a platform with API’s that 3rd parties can come and build apps on top of. The above are just a few ideas that came to mind – I think there would be a lot of possibilities if you opened it up. It could also let your product be embedded into other services too.

    Overall, just make sure you eliminate everything in this video :-)
    http://www.youtube.com/watch?v=zbJAJEtNUX0

    • http://www.interwest.com/software-as-a-service/ Bruce Cleveland

      Thanks, Ryan. Very helpful.