In 1980, following the breakup of the American band The Eagles, Don Henley was asked when the group would reunite. His response, “When hell freezes over.” Surprisingly, hell froze over 14-years later, when The Eagles launched a highly lucrative tour and TV special. According to Guitarist Glenn Frey, "We never broke up, we just took a 14-year vacation." The story is familiar. A young band gets into music for the sex, drugs and fame. They record a few songs, have a couple hits and then hit the road. The rigors of touring, along with the instant notoriety and unending public scrutiny cause the band to disintegrate, often to the point of declaring they will never work together again. In many cases, once the money (and sex and drugs) run out, the band members forget the days of rancor and only recall the “good old days” when creating something from nothing was fun. Eventually one of the band mates swallows their pride, picks up the phone and proposes a reunion tour. A similar phenomenon occurs in the startup world, without the drugs or drama endemic in the music industry.
Below is a talk on Cloud Computing from the University of California Santa Barbara's Technology Management Program, by Michael Crandell. I think you will be surprised by what the CEO of this industry-leading cloud computing has to say about the future of the Cloud. Full Bio: Michael Crandell, CEO and Founder of Right Scale Michael Crandell is the CEO and a founder of RightScale, where he provides the vision and direction for the company as it pioneers innovative ways to bring the power of cloud computing to any organization. Crandell is a frequent speaker at cloud computing industry conferences, and he has played a major role in helping establish and promote openness and transparency in the cloud market. Prior to RightScale, he served as CEO at several Internet Software-as-a-Service (SAAS) companies and as executive vice president at eFax.com. Crandell received his B.A. from Stanford University and completed graduate studies at Harvard University.
During the height of the dotbomb bubble, numerous companies struck Barney deals. These spurious partnerships had no substance and were initiated for the sole purpose of sending out a press release. They were dubbed Barney deals because the structure of such relationships was so lightweight that the underlying agreements merely affirmed the companies’ mutual affection, as articulated in Barney’s theme song, “I love you, you love me. We’re a great big family.” Despite the pathetic nature of Barney deals, the big purple dinosaur offered sound business advice to entrepreneurs in a TV episode entitled, “Sharing means caring.” Barney realized that caring entails a willingness to share the risks and rewards associated with a mutually advantageous relationship. Leverage the purple dinosaur’s wisdom and seek business partnerships which are based upon sharing the results, as opposed to deals in which one party trades their money for promises.
In the first Star Wars film, released in 1977, the seemingly humble Ben Kenobi is confronted by a squad of Imperial Storm Troopers. With a slight hand gesture and a confident stare, he convinces the Storm Troopers that there is no reason to search his vehicle and to leave his droids unmolested. The audience later learns that “Ben” is actually Jedi Master Obi Wan Kenobi and the persuasion technique he deployed is called the “Force.” Unfortunately, non-fictional entrepreneurs cannot draw upon the Force. However, there are Jedi mind tricks that really do work - words, techniques and patterns of behavior that cause people to act in a highly predictable manner. Just like the Storm Troopers, victims of these mind tricks are usually unaware of the degree to which they have been manipulated.
In 1987, a representative of Michael Jackson approached the modest Sycamore Valley ranch house and knocked on the door. The owner of the ranch was shocked by the visitor’s message. He told the homeowner that he represented someone who wanted to purchase the ranch at a substantial premium over its current fair market value. He also indicated that the offer was non-negotiable and the home owner had to respond either “Yes” or “No” in a matter of hours. Although this is a somewhat unusual real estate transaction, it reflects a surprisingly common scenario in the world of mergers and acquisitions, with one important distinction.
In 1933, baseball card collectors were frustrated. For some reason, they found it impossible to complete their Goudy Gum 240-card set. No matter how many packages of cards they purchased, they failed to find card number #106, which featured Napoleon Lajoie. Enterprising collectors who wrote Goudy and voiced their frustrations were rewarded by receiving the Lajoie card in the mail. All other collectors were out of luck. What was behind the mystery of the missing Lajoie card?
The man at left built the first personal computer. He also spearheaded a number of fundamental software breakthroughs, including creating the basic hardware / software architecture which resulted in the creation of the third-party personal computer (PC) software industry. If this gentleman was such a pivotal player in the early days of the PC revolution, why is he essentially unknown to most entrepreneurs under forty years old? The short answer is that he failed to conform to his Stakeholders’ realities. Few mistakes would have such wide-ranging implications in the business world over the next two decades.
During the late 1800’s, American author Horatio Alger wrote 129 novels, most of which recount the deeds of impoverished young people who overcome their modest means to establish independent lives as self-sufficient, middle class citizens. Years after Alger created this new genre, it was derisively (and incorrectly) termed “rags to riches.” A common critique is that Mr. Alger’s heroes succeeded by conveying a simplistic formula comprised of honesty, cheerfulness, virtue, thrift, and hard work. Dismissing Mr. Alger’s works as juvenile rags to riches novels misses the author’s primary point and the reason why the books had such a tremendous impact on several generations of American entrepreneurs.
“I know half the money I spend on advertising is wasted, but I can never find out which half.” John Wanamaker If Mr. Wanamaker had access to the Internet, his oft-repeated quote, would have never been uttered. In the “good old days”, pre- 1999, advertising dollars were largely gambled away. As noted in Pour and Stir Part I, the key to the successful execution of this strategy is managing the following equation: The cost to acquire a customer < lifetime value of a customer This entry focuses on how you can minimize your cost per customer acquired by systematically establishing the infrastructure necessary to track the results obtained from a variety of online and offline marketing vehicles.
Note: This is Part I in a three-part series on The Perfect Business Model. Click here for Part II, and Part III Authentic, hand-crafted Persian rugs always include intentional imperfections. They are said to be, “Perfectly Imperfect, and Precisely Imprecise.” The same is true with many crafts and architecture created in Muslim cultures. I am not a Muslim scholar, but a layman’s interpretation of this tradition of intentional errors is that it arises from the belief that attempting to emulate God’s perfection is sinful. Fortunately, entrepreneurs need not fear running afoul of this sin when crafting their business plans, because all of them are inherently imperfect and imprecise.