Derek Pilling
So, You Want to be a Platform?
Everyone wants to be a platform these days. And they are popping up faster than I can keep track of them. Facebook became a platform, enabling application developers to develop on top of Facebook. Next came the iPhone. Salesforce.com offered Force.com as a platform. Twitter became a platform. A few weeks back PayPal became a platform. AmEx bought [...]
Reactions to AmEx’s Acquisition of Revolution Money
Karen Webster of Market Platform Dynamics asked me to share some quick reactions on the announced acquisition of Revolution Money by AmEx this morning. As a result, my thoughts are cross-posted on PYMNTS.com. Karen asked me to address the following questions/issues: What was your initial reaction to the news? My initial reaction was that AmEx move to purchase [...]
Pitching a VC: Turn the VC into your straight-man
There is really no one “right” way to pitch a VC. Whatever approach gets the job done is “right”. Having said that, the pitches I would rate as most effective over the years are those that caused me to engage by asking the right questions at the right times. As an entrepreneur, this is exactly what you want; [...]
What is this “Momentum” of Which You Speak?
A meeting with an entrepreneur last Friday reminded me of the most frustrating and overused feedback entrepreneurs receive from VCs: Talk to me when you have “momentum”; or I need to see some “traction” first. With more and more VCs looking to make later stage investments, entrepreneurs are receiving this feedback more than ever. You can [...]
A fun (and potentially infuriating) mental exercise
Every couple of years, I run into this probability puzzle that reminds me just how bad humans are at assessing probabilistic outcomes. Its called the Monty Hall problem, named after the famed Monty Hall game show. The puzzle goes something like this. Suppose you are given the opportunity to choose between three doors. Behind one [...]
Managing your Board; Give ‘em a job!
In a post last week, I addressed the notion that everyone needs someone to report to. After all, you can’t report to yourself. The reporting relationship between a CEO and a Board is critical for a Company’s success. That relationship must be based on trust, candor, and transparency. While that hierarchical reporting relationship is necessary and [...]
The math of SaaS revenue growth
A conversation with the CEO of a SaaS company today reminded me of the importance of the rule of 78s. What is this “rule”, you ask. If you run a recurring revenue business, it is the most important number you have never heard of. Back to my conversation with the CEO. We were talking about the [...]
You Can’t Report to Yourself
Everyone needs someone to report to; even VCs. This may sound strange coming from a VC. Some entrepreneurs who choose to raise venture capital have great disdain for the necessary evil of reporting to their investors. That disdain is appropriate to the extent investors are asking for mundane information that creates a reporting burden and [...]
Payments: A Day on the Inside
Image by monty.metzger via Flickr Earlier this week, I participated in a truly special event, the Lydian Roundtable. Lydian is a gathering of the best and brightest in the electronic payment industry and is hosted by my friends at Market Platform Dynamics, David Evans and Karen Webster. Every year, they bring together 50 to 100 [...]
When Expectations Converge
Image via Wikipedia Yesterday, I posted on a VentureBeat piece covering the correlation between exit market conditions and venture capital company-building behaviour and philosophy; or lack thereof. The piece called for a back-to basics approach to venture capital, where investors are focused true partnering with entrepreneurs to build fundamental value over a traditional investment horizon [...]
Why VCs Need to Create Value
VentureBeat’s Entrepreneur Corner has a must read post today on the recent history of the Venture Capital business model. Every entrepreneur should read this, particularly those looking to raise venture capital and in the enviable position of being able to select the right investor for their company. The author, Steve Blank, walks the reader through [...]
I have seen the enemy
Earlier this week, I attended a Board dinner for one of my investments. The Board dinner is always one of my favorite parts of the Board meeting ritual. If you are an emerging growth player and have a formal Board, whether venture-backed or not, you should have Board dinners. I say they are one of [...]
Cognitive Dissonance: Are you a technology or a service?
One of the trends I’ve observed over the past several years is that more and more technology entrepreneurs are starting service-delivery business. By services businesses, I’m referring to the category of businesses that some venture investors refer to as technology-enabled services (“TES”). We at Meritage prefer the term network-enabled services (“NES”), which we think more [...]
Financing a Services Business: The Valley of Death
It is a late afternoon ritual for me to read the Meritage Minute, a daily briefing on key news events published by my colleague Heidi Longaberger. If you would like to receive The Minute, email Heidi. Yesterday’s briefing included an AlwaysOn piece titled “In Ten Years Will All Apps Be in the Cloud?” I’m not [...]
Not All "Free" is Created Equal
I’m still mired in reading Chris Anderson’s latest book; “Free”. I doubt I’ll finish it. 130+ pages in, I haven’t discovered anything illuminating. In fact, I’d argue that by combining a number of very different applications of free under one umbrella, Anderson does not clarify free, but rather makes it more confusing. For example, a business model [...]
