Keenan 411

Jim Keenan is Vice President of Sales Strategy and Operations with a Global Technology Company, an Enterprise 2.0/Web 2.0 Connector, an Entrepreneur still trying to get it right, and a PSIA Certified Ski Instructor for Vail Resorts. Husband to Big E and father to four great kids. In a nut shell, I'm a Sales Guy. Life is good!

The Benefit of Having Nothing

When it comes to competing with established companies, start-ups have one HUGE advantage; they have nothing. They have no history. They are historically broke. They have nothing to protect.

One of the challenges established companies face is fear of losing what they have. Established companies have revenue, customers, market share, and historical performance. Having stuff like this creates and interesting tension. It forces a difficult question. What do you focus on, protecting what you have or working on getting more.

Start-ups have one singular focus — growing. They don’t have to worry about protecting what they have. There is no fear of losing what they have–they don’t have anything. This singular focus is a HUGE advantage. The tension established companies have doesn’t exist.

You see this a lot. Companies faced with diminishing revenue, lost customers, eroding market share focus on how to stop the bleed, how to protect themselves from losing. Goals, investment, efforts, and rallying cries focus on how to stop the bleeding, how to not lose. They stop trying to win.

I think this is an interesting dynamic. It’s the competitive underpinning to why start-ups can be so disruptive. They have a “nothing to lose” mentality. This allows them to place big bets, take chances, shun the status quo and more; all the things that make innovation possible. There is nothing tethering their thinking. They have a singular focus — grow!

When you have something to protect, innovation, taking chances, creativity, put at risk what you have. Because of this we avoid them. The result, less innovation and creativity.

Like a team down 3-0 in a best of 7 series, start-ups have nothing to lose. This puts them in a very competitive postion. It’s an advantage.

If establish companies could keep this in mind, it would allow them to keep the advantage they have of being an established company.

I think Apple thinks this way. However, now that their market cap has surpassed that of Microsoft, will they stay that way? Will Microsoft keep trying to protect what they have or look forward.

Having nothing is a great advantage. Having something can be an albatross if you let it.

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June 1, 2010 | Filed under: Business Performance,Entrepreneur | View Comments |

Out With The Old, In With The New

I liked the announcement eBay made yesterday about the sale of Skype (65% of it) to private Equity firm Silver Lake for 2 billion dollars. This values Skype at around 2.75 billion dollars. Skype’s second quarter revenues were 170 million dollars. Rough estimate, Skype will do 700 million in revenue for 2009. This gives this deal a 4x multiple.

Silver Lake is one of the principle investors, with TPG, in enterprise communications company Avaya. (disclosure: I work at Avaya) Avaya is bidding for Nortel’s enterprise business unit and has an offer on the table for 475million. Nortel’s enterprise business units revenue could be as much as 2B. That’s only 20% on the dollar. Nortel has a global presence, a strong government practice, is the 3rd largest enterprise communications company in the world and has substantial IP. Yet it’s value is only 20 cents on the dollar. While Skype is primarily a free consumer computer to computer voice service, with 1/3rd the revenues and it’s multiple is 4x.

I think this is a pretty clear sign on where enterprise telecommunications is going.

Things are changing. The way we communicate is changing and the enterprise has been slow to adopt. The old, stuffy, phone sitting on our desk is getting dusty. Enterprise communication is quickly moving to the laptop/desktop. This is Microsoft and IBM territory. I think this move by Silver Lake is classic, “skate to where the puck is going, not where it is”. Despite Nortel’s revenue and customer base, they are not positioned well for the future. Skype on the other hand gives Silver Lakes portfolio company Avaya a tool to get on the desktop and fend off Microsoft.

To become a next generation enterprise communication company; the old school incumbents; Avaya, Seimens, Alcatel-Lucent need to adapt. They need to move to the desktop, they need to embrace communication tools other than voice. Silver Lakes purchase of Skype potentially gives Avaya a huge advantage. It gives Avaya the ability to offer a desktop AND mobile application the consumer market is already familiar with that includes, video, IM/Chat, and voice. Hmm, sounds a lot like Microsoft’s MOC client. (Microsoft Office Communicator)

It will be interesting to see what Silver Lake does with this purchase. What is certainly clear, the multiples don’t lie. The old school enterprise communications companies need to change and change fast.

September 3, 2009 | Filed under: Business Performance,What I Think! | View Comments |

Bing; 2000-Late, Not 3008

binglogo_lgBing may be a great search engine. But, I don’t think it’s good enough to make of a difference in search. Never mind usurp Google’s strangle hold. Microsoft feels there is tremendous amounts of money to be made from search. So they bet on Bing. The problem is they’ve just built another mouse trap. Even if it’s a “better” mouse trap, it’s still just another mousetrap. Is Google perfect? I can’t tell you that, but what I can tell you is it works just fine for me and just about everyone else I know. There is no latent, pent up demand in me that says, “fuck; I wish someone would just create a better search engine, this sucks”. I have no “problem” with Google. And, that IS a problem for Bing.

If you are going to get me to leave for something different, not new, but DIFFERENT, I have to have a problem with the current product. If I don’t have a problem, the only way you’ll get me to switch is if your different product is so much better I just can’t believe I was able to live with out it. It can’t be a little different, or a lot different, but unbelievable different if you’re going to get me to switch. Bing ain’t unbelievably different.

There’s tons of money in search. I get Microsoft wants a piece of it, but skating to the puck is not the way to get it. Microsoft needed to change search, they needed to skate to where the puck was going. MS has not done well with search to date, with 98% of their current Live Search traffic coming passively from MSN. In hopes to change things, MS is gonna spend mad money on advertising to get the word out. I don’t think this is going to work. It just looks and feels like more of the same, like a better mousetrap.

Too many companies make the mistake of skating to the puck by making better mouse traps and expecting it to make a splash, save the company or take market share. Skating to the puck and better mouse traps are maintenance moves. It keeps you in the game, it keeps you relevant, it doesn’t change the playing field. It’s not disruptive.

To be disruptive, to be truly game changing you have to skate to where the puck is going. You have to look ahead. To skate to where the puck is going, you have to have your head up. When you have your head up and are looking down ice, you aren’t looking at what is happening now but rather formulating where everything that’s happening now is going.

If Microsoft had been skating to where the puck is going, I’m convinced Bing would look completely different. If Microsoft had been skating with their heads up, Bing would be search 3008 not search 2000-late.

To be disruptive, keep your head!

June 4, 2009 | Filed under: Business Performance,What I Think! | View Comments |

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