FountainBlue

FountainBlue�s September 30 Third Annual State of the Virtual Worlds Industry Event featured:

Facilitator Barry Holroyd, CTO, Masher Media

Panelist Andrea Leggett, Senior Product Marketing Manager, EMC

Panelist Dannette Veale, Virtual & Digital Technology Strategist, Cisco�s Global Sales Experience and Virtual Partner Summit

Presenting Entrepreneur Parvati Dev, President, Innovation in Learning

Presenting Entrepreneur Raj Raheja, Founder and CEO, Heartwood Studios

Presenting Entrepreneur Nanci Solomon, Founder and CEO, Xulu Entertainment

Please join us in thanking our speakers for taking the time to share their advice and thoughts and to EMC for graciously hosting us for this year�s annual event. Below are notes from the conversation. 

We were fortunate to have a range of experienced panelists actively engaging in the range of virtual worlds activities. The discussion began with an overview of the industry trend, moving from more entertainment purposes to more serious applications, from text and 2 dimensional renderings to more 3D and web experiences. Drivers for richer adoption of virtual worlds solutions include:

• Technology advancements on the client side for everything from PCs to browsers, to mobile, TV, and headsets which allows users to experience immersive interactions with others dynamically, real-time;
• Increased networking, connectivity and performance, which allows users more options for dynamic, interactive, engaging experiences with others; and
• Diminishing development costs, which make it easier for companies to provide solutions in this space.
• Gen Y grew up surrounded by technology, and will push the immersion solutions and technologies and create the kind of demand that can help spark the industry. They are also fostering a social transformation with the convergence of personal and business life, which will impact the market need and technology direction.

Although there have been many technology advancements, some of the cutting edge applications, the �cool� things are solutions we can do pretty much today. But the seasoned entrepreneur looks for the business model, the customer needs, the funding opportunities for these solutions. And many of these solutions are centered around immersive simulation, training, educating and connecting, especially as it applies to real-life needs in the area of healthcare, military and defense applications. In the corporate arena, virtual worlds are leveraged to filter information, make it relevant and engaging, and make it available real-time, with specific measurable results.

Our panelists were quite bullish for the opportunities ahead in the industry � see industry reports in the resource section below, and commented on the opportunities ahead:

• The rise augmented reality solutions like Microsoft�s KINECT motion detection input device has specific implications for virtual training and gamification.
• The rapid rise and adoption of social networks including FaceBook and Google+ will soon demand a net for virtual communities, where existing groups can connect more virtually, where platforms will allow trusted others or strangers with similar interests to connect.
• Hybrid events will become more popular, where there�s a combination of real-life, face-to-face meetings and virtual connections as well.
• Virtual events may facilitate more communities and conversations and connections on an ongoing basis, either online or virtually or a hybrid of the two.
• Virtual trainings will continue to be leveraged in critical situations where personal safety and expensive equipment might be at risk: in hospital care, in military training, in aerospace, etc.
• Virtual trainings will continue to be leveraged by forward-thinking companies to better connect with customers and partners and staff and other stakeholders, and to better prepare, train, measure, reward, communicate at all levels.
• Leverage the knowledge of subject matter experts from around the globe to solve real-world, real-time problems so that all benefit.
• Translate accepted standards of procedure into virtual worlds experiences and even certification and re-certification processes can not only increase adoption of virtual worlds solutions but also provide customers and practitioners with immediate benefits.
• The trend is to create generic platforms which can be adopted to the needs of specific customers, with their content, their functionality, their look and feel. There is a huge opportunity in making it easy for customers to customize these solutions for their own needs, or doing it efficiently for them.

The challenge today is not really around the technology, but around providing the right solutions to wow the customer and connect them with people more deeply and more easily than they thought possible. Our panelists provided the following recommendations for those in the space:

• As mentioned in Blue Ocean Strategy (see resource area for book information), rather than go directly against the competition, find and delight the customer, those who would benefit from connecting with others, deepening relationships, and/or training and educating key stakeholders in their network.
• Measure the solution you provide with data on whether they like it, whether they master the information, whether they use it, whether business outcomes come from the usage and communicate the results in terms of ROI.
• There is a lack of standard definitions about the industry, and a lot of hype and bad experiences from early adopters and users as well as lots of investment dollars lost on what-seemed-like-a-good-idea-at-the-time. These need to be overcome to facilitate deeper and quicker adoption.
• Find the business model around your virtual worlds solutions � how do different types of people make money in participating and what does it mean to him/her?
• Leverage social media and word-of-mouth to build your community and solution.
• If you�re transitioning from real-world to virtual world communities for financial or other reasons, work with your customers to deliver the knowledge, recognition and connections they seek, and also to find other opportunities for them to get that real-world connections. Don�t also expect to have the same feedback, knowledge and results immediately upon the substitution, especially if it was a last-minute, unpopular decision, but if you stick with it, it will continue to generate results.
• Because of these associations, it�s a matter of semantics, and you can speak more about working in a �visual social platform� rather than in a �virtual world� solution.

• Avista Partners, Interactive Entertainment Summit 23 Nov 09, http://www.slideshare.net/pheydon/avista-partners-interactive-entertainment-summit-23-nov-09-main-pres
• Online as 70% of 106 billion dollar market cap

• Blue Ocean Strategy http://www.blueoceanstrategy.com/
• A bestseller across five continents, published in 40 languages with more than 2 million copies sold, Blue Ocean Strategy is based on a study of 150 strategic moves spanning 100 years and 30 industries, and provides a systematic approach to making the competition irrelevant and creating uncontested market space.
• Forrester Research, Getting Real Work Done In Virtual Worlds, by Erica Driver, Paul Jackson, with Connie Moore, Claire Schooley, Jamie Barnett, January 7, 2008, http://www.forrester.com/rb/Research/getting_real_work_done_in_virtual_worlds/q/id/43450/t/2
• . . . it's still early, pioneering days. You've practically got to be a gamer to use most of these tools � setup can be arduous, navigating in a 3-D environment takes practice, and processing and bandwidth requirements remain high. But within five years, the 3-D Internet will be as important for work as the Web is today. Information and knowledge management professionals should begin to investigate and experiment with virtual worlds. Use them to try to replicate the experience of working physically alongside others; allow people to work with and share digital 3-D models of physical or theoretical objects; and make remote training and counseling more realistic by incorporating nonverbal communication into same-time, different-place interactions.
• Kzero Universe Charts http://www.kzero.co.uk/blog/slideshare-presentation-of-q2-2011-universe-chart/
• Virtual worlds, MMO companies by size, average user age and launch date
• Virtual Worlds Landscape, Barry Holroyd
  

FountainBlue's August 5 Bi-Monthly Business Analytics Event focused on Business Analytics in Financial Services and featured:

Facilitator Melissa McDonell, Brand Voice Marketing

Panelist Satya Kunapuli, Director - Research, Testing and Analytics at Intuit, Principal at Esskay Solutions Inc.

Panelist Raj Sen, Group Manager, Multi-Channel Analytics, Adobe

Panelist Carl Snyder, Senior Industry Principal, Banking, SAP America

Please join us in thanking our speakers for taking the time to share their advice and thoughts. Below are notes from the conversation. 

We were fortunate to have such experienced panelists who shared a wide range perspectives and thoughts on business analytics trends. They commented on the volume of data, the advances in both hardware and software technology, and most importantly, the importance of building customer-centric, solutions which can help companies make data-based decisions which would serve their customers real-time. Indeed, business analytics is changing the way we do business, and the vendors on our panel spoke about how analytics and data are helping their companies to better understand and respond to the needs their customers and plan for updating and upgrading their products and services based on their customers' needs. The panelists commented that we are already serving the customers well, much at the same level as a Marriott might treat us, remembering our stay frequency and personal requests. But with additional data and analytics, we could learn to treat our customers more like how a Ritz Carlton might treat us - remembering and anticipating every request, for a stellar experience.

Whether they are working with the ever-growing volume of data available, or serving a larger volume of customers, or integrating with a larger myriad of devices designed easily communicate real-time facts to enable effective, targeted decision-making, it is clear that the most forward-thinking companies are 1) leveraging technology to better serve their customers, 2) valuing the high-impact customer, 3) raising the bar for how to better serve customers real-time, 4) seeing the value business analytics solutions as a competitive advantage, and 5) training and educator internal staff, partners and customers to accept and adopt these solutions and integrate them into their day-to-day work.

The bottom line is that as amazing as current and projected results are, there will be an ever-increasing demand for speed, scalability, and functionality, and companies that can keep ahead of the curve are well positioned to better serve, impress, recruit and retain customers.

The panelists commented on how financial services industry differs from other industries: 1) they may be more adverse to technology solutions, 2) they may be more risk-adverse and more likely to have data security concerns, 3) their legacy applications, including those around loans for example, most be easily ported and integrated into a new business analytics solution, without revamping how the old processes are done, 4) those in the industry are more comfortable with paper than with computers or tablets, and 5) regulations and policies will both make leaders in the financial services more reticent and risk-adverse *and* force them to adopt technology-driven automated processes.

Below is some advice for those innovating in the business analytics in financial services industry:

Be Strategic:

• It's not just about collecting data for data's sake, but more about how that data that empower fact-based decision-making.
• Ensure business analytics solutions are in alignment with company goals.
• Consider how regulatory, privacy, security and governance impact customer purchase decisions and factor that into your strategic growth and expansion plans.
• For entrepreneurs running and growing a company, choose a tool before you think you need it. Don't just rely on your instinct to tell you it's time to do it, but have the tool show you the data about *why* you need to do *what* in a quantifiable way.
• Small, medium-sized and large companies have similar needs for business analytics, but their volume of need, the volume of transaction and level of support vary. Know which market you serve and focus your communications and services on that niche market.

• Focus always on what the customer is doing, what's important to them, where they are spending their time, where they are physically, what tools are useful for them, etc
• Develop and enhance relationships with customers through digital and other channels, and also watch for the merger and integration of CRM, ERP, ATM and other systems.
• Help customers use the data to break down silos around roles and products and build collaborations within an organization, between customers and vendors, channels and partners.

• Use the right technology to secure the most relevant data, with the right objectives, using the right assumptions for the right people.
• Leverage social media for outreach, community-building, and feedback.

The bottom line is that to better serve the financial services industry, one must make the technology simple, easy-to-use, understand and act upon, and integrate it into their daily operations seamlessly, while proving the value through measurable reports and bigger customer retention and acquisition.

FountainBlue's Bi-Monthly Business Analytics Event: Business Analytics in eCommerce and Retail and featured:

Facilitator Adrian Ott, CEO, Exponential Edge Inc. and Author, The 24-Hour Customer

Panelist Darren Bruntz, Senior Director, Analytics Platform & Delivery, eBay

Panelist Tobin Gilman, Vice President, BI and EPM Product Marketing, Oracle

Panelist Raj Sen, Group Manager, Multi-Channel Analytics, Adobe

Please join us in thanking our hosts at eBay for graciously hosting us at their facilities and for their ongoing support of FountainBlue. Below are notes from the conversation. 

With the explosion of online, web, social, mobile and video, the sheer volume of data over the next four years will approach the total amount ever created in the history of the planet. As our panelists agree that understanding what customers are doing and personalizing experiences based on their behavior is a must-have, not a nice-to-have, the challenge for technology companies and retailers is how to take this volume of data and target, acquire, engage and measure customers in order to provide personalized systems which would lead to better customer experiences and loyalty.

We have rapidly moved from a period of relatively little data, most of it offline, with few big tech companies specializing in analytics and business decisions based on intuition to a period where the volumes of data overwhelm even the largest tech companies, large companies partner with other large companies to cost-effective provide personalized experiences for customers, and seamless presentation of dynamically generated information online, customized to the needs of the user, based on analytics.

The sophisticated business analytics of today's large tech companies including data management, database technology, data integration, standard BI, end-user, predictive, financial performance management, hardware and software are all leveraged to serve the individual and personalized needs of the user. But there is a challenge of creating scalable, cost-effective solutions which serve a business purpose, and isn't too high-maintenance from a technology perspective. Each of our panelists and their companies are looking for opportunities to innovate in business analytics space overall, in the retail and other sectors so that we build trust and do the right thing for the customer, saving them time and money, while respecting their privacy.

This challenge of getting-heard-through-the-noise has existed for decades, yet it is amplified now for several reasons, including the proliferation of products and brands, the number of channels where information can be presented to customers - from web site to mobile to brick and mortar, plus the integration of all, the relative ease of reaching to customers leveraging technology like e-mail and web sites, the formidable margin pressures put on management with the commiserate pressure to ensure advertising dollars reap rewards, and other factors. There may be more information and data to process, but studies find that consumers are using the same amount of time to make purchasing decisions now as they have before.

This all leads to the impatience of customers and the escalating demand for instant evaluation metrics and vetted recommendations from trusted sources. Below is advice from our panelists for better serving that customer and providing value-added, dynamically-generated, data-driven personalized solutions for those customers:

• Be a trusted brand and resource to the customer. Leverage their behavior, history, profile, and other data so that it best serves them while respecting their privacy and adding value to them.
• Leverage social media so that the wisdom of the crowd can best decide the best sellers, the best buyers and the best products.
• Be a neutral body for both sellers and buyers and be clear on policies and procedures for buying and selling.
• From the vendor's perspective, your business analytics program goal should be more customer loyalty, increased likelihood of up-sell and increased referrals. From the customer's perspective, the goal might be more timely, more personalized recommendations based on patterns of use, survey of needs, and available product offerings.
• Address the needs of the customer with sophisticated, integrated technologies which appear seamless to the customer.
• Understand and segment your users and note patterns so that you can better serve and even anticipate the needs of the customer.
• Rather than striving to interpret the huge volumes of generated data, seek larger patterns of behaviors and create use cases which would make recommendations on what's important to the user, without looking at *all* the data to justify that recommendation. Extend the concept further into use case families to better understand customer segments, product feedback, buying trends, etc.
• Collaborate with key vendors to create generic application for future use, keeping solutions simple for customers, retailers and vendor alike.
• Buy or build technologies that would serve your customer, but if possible, don't create another technology stack which needs to be upgraded and managed.

• Find the integration between mobile devices and cameras and how it can integrate with more traditional retail experience in brick and mortar stores as well as in ecommerce solutions.
• Leverage social media to more efficiently provided customized, personalized, vetted feedback to niche customers.
• Make it easy for retailers who are not necessarily technophilic to learn and adopt business analytics practices which would serve both their customers and their businesses.
• Leverage personalized online visualization so customers experience the product visually and in 3D in a way that drives customer purchasing decisions without too much extra technology overhead.
• Create a solution which would generate results faster, more accurately, more efficiently.
• Consumers are hungry for a score - how do you create a vetted, five-star instant-gradafication system cost-effectively to them?
• Go beyond tables and bar charts and produce 3D reports like waterfalls or scatter-plots so that retailers can better manage their merchandise online, on-site, in the warehouse, and elsewhere. These reports
• Create solutions which address the intersection of data on behavior, customers, transactions and products and translate it into actionable correlations.
• The pro-privacy movement led by some consumers will make it more difficult for retailers and vendors to understand behaviors of consumers. But this challenge is also an opportunity.

The bottom line is that data is a double-edge sword: it holds the secret to better understanding and serving the customer, but the sheer volume of data makes it a challenge to integrate and protect/secure it while identifying the kernels of wisdom and information which would spell out patterns and better anticipate and deliver actionable personalized solutions for retailers, vendors and customers alike. The market will continue to evolve as retailers open up to analytics, consumers keep raising the bar on what's immediate and what's personalized, vendors collaborate to dynamically deliver more sophisticated, integrated technology solutions, and entrepreneurs continue to innovate.

Resources:

• Wall St. Journal May 18, 2011 Article on Check Out the Future of Shopping covers mobile shopping gadgets http://on.wsj.com/j2uV06
• Our facilitator Adrian Ott , CEO of Exponential Edge Inc. and NAWBO's Silicon Valley's Enterprising Woman of the Year 2011 is also the author of The 24-Hour Customer: New Rules for Winning in a Time-Starved, Always-Connected Economy http://www.24hourcustomer.com The 24-Hour Customer, named a Best Business Book 2010 by Library Journal and Small Business Trends, provides a framework that helps businesses turn customer time and attention scarcity into a competitive advantage. The book demonstrates how to make your products and services more addictive through the use of key buying triggers and techniques that redirect customer attention and traction in your favor. To purchase your copy online, visit http://amzn.to/cJASOb.

FountainBlue's May 27, 2011 High Tech Entrepreneurs' Forum was on the topic of Trends in Storage and Security Innovations. Our corporate panel featured:

Facilitator Sheri Osborn, MineSeeker

Panelist Jay Chitnis, Jay Chitnis, Director, Business Development & Alliances, Isilon Systems

Panelist Gerhard Eschelbeck, CTO, WebRoot

Panelist Nasrin Rezai, Senior Director, Information Security, Cisco

Panelist Prasenjit Sarkar, Research Staff Member and Master Inventor, IBM Almaden Research Center

Our entrepreneurial panel featured:

Facilitator Sandy Orlando, VP Marketing, IP Infusion

Panelist Tyler Bengston, Director of Product Management, IronKey (secure thumb drives)

Panelist Brian Bulkowski, CEO & Founder, Citrusleaf

Panelist Andres Kohn, Vice President of Technology for Proofpoint (secure e-mailing and archiving)

Panelist Ryo Koyama, CEO, YOICS (remote computer and network management)

Please join us in thanking our hosts at EMC for graciously hosting us at their facilities and for their ongoing support of FountainBlue. Below are notes from the conversation. 

We were fortunate to have such a wide range of panelists looking through from different slices of the storage and security issues, and articulately sharing their direct experiences and perspectives as well as their thoughts on trends and directions. Some of the big-picture take-aways included:

• The genie is out of the bottle. It's not a matter of whether you allow users within or outside a company to gather huge volumes of data, host it on a cloud, network devices and appliances, etc. It's a matter of accepting that this is happening and will continue to happen at a more accelerated rate, and encouraging everyone to best manage accordingly by putting together processes and procedures, educating the users, and dealing with issues immediately as they arise.
• The cloud is here to stay, and will be more pervasive. Storage, hardware, software and other solutions will be better managed and more secure on the cloud, and the cloud will be an integral part of the evolution of technology. It is already a given, not a debate. The question is where will it go from here?
• Those who serve customers best and most efficiently will win. There are many factors leading to the proliferation of big data - from social media to the millennial generation to the predictive analysis needs of advertisers, to the number of devices per person etc. So those who don't fight the data explosion reality, and work with it to better serve and protect users will continue to grow.
• It's all about the user. You could build these great technology solutions, have the best plans, policies and mandates, have great laws with consequences, etc., but the human factor, the choices each individual user makes around storage and security will determine how secure and available her/his data, and that of the network is.
• Work with an IT team (as customers, partners or staff), who accepts the realities about data proliferation and the data-access and security needs of the user. Even though the network borders are essentially gone, and control is an illusion, the next generation IT directors will get a sense of their assets from a service perspective and understand that the basic network and application hygiene is even more important and foundational. They will work with you to build resilience inside your environment and educate your people.
• It will take a collaboration of government, corporations, users and customers to develop storage and security management standards and solutions which would address our customers' need for data real-time and the security and privacy of these same customers.

• Accept that users will want to have freedom to do what they want with the tools that they want, within and outside work, and plan your storage and security optimization goals accordingly.
  
• Have standards and policies in place for what hardware and software is acceptable and track and monitor who is doing what within the network.
• Educate your users about ways they can potentially compromise your network or systems.
• Know what your assets are and what needs to be protected and set up systems and processes which would alert you quickly should these assets be in any way threatened and respond quickly to these alerts.
• Think not just that data *might* get onto the cloud, but that it will likely get there, whether or not corporate policies approve it. Work with your users to do it elegantly so you best manage risk, and best plan for scalability.
• People have already accepted that there are volumes of data of different formats which are difficult to process and analyze. The next story will be how fast can you get the data, and how much will it cost to get it? Those who can efficiently deliver this to the most niche customers will win.
• Work with the policies of each individual government, which has real borders, and work to develop international standards for data storage and security.

Here are some panelist thoughts on the huge opportunities ahead for managing storage and security.

• The rapid increase in big data leads to huge opportunities for those who can turn the data into actionable information which would help better serve niche customers.
• The sheer volume of devices out there and the volume of data generated from it will create a huge opportunity for data security, data management, cloud, device and other solutions.
• The types and numbers of viruses have risen exponentially in alignment with the volume of data. It has gone from the hacker-stage where someone creates viruses for personal gratification/fun/notoriety to computer-generated viruses with real revenue models. Therefore, there will be an ever-increasing need for solutions that would manage and minimize the risks of viruses, especially those which can go beyond signatures on individual desktops. These next-generation solutions may involve light-weight components and software with the heavy lifting done on the cloud rather than more traditionally on the local server.
• Understand not just the technology but also have the storage and security technology helps your customers meet their customers' needs and fit within overall market trends.
• Speak in terms of the productivity of your employees. Storage and security issues can bring networks and companies to their needs, so speak specifically about how your company minimizes that risk.
• Identify a need and design your product specs based on that need and engage a customer base in creating and improving the solutions you offer to them.
• Seamlessly address storage and security issues with a clean user interface that makes users feel protected, within putting them through a gamut of validation and approval screens for things better done behind-the-scenes.

• Think of technology as a necessary safety belt to manage security, but don't see it as the end-all solution, but how the customer/user leverages that technology will determine how useful it is.
• Communicate to customers, partners, and others based on real data and information, ROI and results.
• Partner with corporates who might be interested in your technology play, might want a longer-term strategic control point, or who might want to round-out portfolio. They are potential customers, investors, partners, channels or acquirers for you. Build your case, build your relationship, but persistent, charming, competent, connected etc., and also see how you can add value to their over value chain beyond what you do as a company, what your class of offerings are to extend to what your partners, customers and others can offer to the same relationship.
• Data might become more vertically focused with deeper knowledge of more niche customers. What are the implications on business models and solutions?
• There will be proliferation of public cloud, and also more private, and even hybrid clouds. Why would customers use each one, and how can you deliver efficient, individually-defined access to each real-time?
• Solve the identity challenge to maximize both the legitimate access of targeted information while thwarting the desire of others to compromise security and privacy.
• What are the next generation mobile devices, and the needs of users to have all their devices work together on a cloud network with full access, but only to those with permission?
• What is the next generation of analytics which looks beyond the surface connections between information that can connect classes of thoughts and data without analyzing deeply, and what are the implications if you could do a rapid-sort of data?
• How will storage and security solutions serve the needs of governments, security officers, secret service, etc.?
• What is the opportunity around authenticating and validating the claims of cloud service providers?
• Storage and security are recession-proof, you have to have it in all economic seasons! But during an uptick, you might think more about longer-term views. What are the implications for hot new solutions as the economy returns? Hint: think in terms of ROI and OPx (not just annually, but perhaps even monthly) rather than CAPx when selling to the customer.

The bottom line is that there will be opportunities where security and storage come together, where we could get access to the most relevant information real-time, without compromising our security or our privacy. The trick is what does that look like, and how will it better serve our customers?

FountainBlue's January 24 High Tech Entrepreneurs' Forum was Third Annual Investment Trends Event entitled Super Angels and Incubators to the Rescue and featured:

Facilitator John Furrier, Silicon Angle

Steve Hoffman, CEO & Cofounder, LavaMind, Founder, FounderSpace

Gary Kremen, Serial Entrepreneur and Investor

Manu Kumar, Founder and Chief Firestarter, K9 Ventures

Katy Levinson, Director, Hacker Dojo

Please join us in thanking our hosts at Hacker Dojo for their support of this program and the series. Below are notes from the conversation. 

The engagement of ex-entrepreneur, hands-on Super Angels, the investment of micro-VCs managing small amounts of dollars, the emerging trend of larger venture firms investing smaller amounts of dollars, the technology advancements which make it easier to generate prototypes cost-effectively, and the rising popularity of communities of entrepreneurs congregating through incubators and looser social and professional associations have led to a froth of activity around small investments ranging from 50-500K in promising technology areas.

Our panelists spoke passionately about the current funding market, ripe for start-ups with great ideas and viable business model, as reflected by paying customers, working prototypes which are proven to be scalable, and a team experienced from both the technology side and the business side. Our panelists represent the investors who would not just fund, but also engage and participate in their portfolio companies, to optimize for success. This is a reversal of the trend from big dollar/large volume/hands-off investments, and the small-funding, heavy-engagement approach will likely bring more desirable results overall.

But our panelists also remarked that it is still difficult to get funding. You have to strategize on who would fund you, and how you could get best introduced to those right funders, once you are ready for outside investment with a prototype and a customer/potential customer. You may also find yourself in a position to seek funding just to make financial ends meet, but try to hold out for the right funding time for the company, notwithstanding the immediate financial needs of the founders. Selecting a funder is a huge multi-year undertaking that should be done intentionally and strategically. Remember that receiving funding is not the indicator of success, but making money IS, and you don't necessarily need investment dollars to earn money for your company. Remember also that most companies succeed DESPITE their investors, so don't count on having investors to be your company's panacea - there is much MORE hard work to do after investment dollars roll in.

Our panelists share a passion for both technologies and people, and actively contribute to the overall entrepreneurial ecosystem, through their support of incubators, individual companies, networks, and others. They believe in the value of bringing good people together, to complement and support each other and make something great together.

They are so well experienced with the dynamics and pressures of a start-up, and work with teams to ensure that each founder and founding team is appropriately rewarded for the value provided, generally with ONE buck-stops-here person per team. They are also aware that supporting early stage start-ups and scaling their valuations positioning them for a sale can be a lucrative venture, perhaps with a higher odds of success than larger, later-stage investments in existing portfolio companies which may not even have as much traction.

With that said, the companies that intrinsically need higher investment dollars, like clean energy or semiconductor or MMOG start-ups will have a difficult time raising large dollars, unless they show initial revenues and users. These companies frequently find themselves in a catch 22 - if we had funding, we could build traction; if we could show traction, we would have funding. Companies in this boat should look at corporate partners interested in this area, but don't have the time o inclination or culture to do it themselves, and other potential buyers to work with them to create scalable prototypes which can build traction, and prove that both the business model and the technology show promise.

Our panelists concluded with these words of advice for entrepreneurs seeking funding in this market:

• Who the angel investors are will impact whether vcs will fund too, so be strategic about your early funding choices.
• Don't get seduced by your own idea, get it tested in the market
• Invest the time in making sure the business model, the mechanics of making money works and that the customers will buy.
• Prove both that your technology works AND that you can make money on it.
• Work with a team who has proven this in the past.
• Bootstrap as long as you can, to build both the business model and the prototype. If you're seeking outside funding, be sure to ask yourself if you are realistically a good investment risk - is your market large enough, is your prototype scalable and reflective of what you can do, can you prove that customers will buy, would someone buy your company and generate the returns investors seek?
• Know your personal limit, your personal style and preferences, and ensure that who you are and what you're looking for is compatible with your start-up team and potential investors.
• There is no magic formula for the number of freemium vs. premium customers, the number of advertising dollars vs the number of partnership or sponsorship dollars. Since it varies, gather and know your data, and make a compelling case that your company is generating sustainable traction, and positioned to do much more, extrapolating from existing data, with or without funding, although faster with funding.
• Understand the business proposition and potential of your company in terms of customer acquisition costs, lifetime value of customers, profit per customer for product/service, etc. and leverage that math to sell the business model.
• Make such a compelling case for your company that investors feel like they are missing out if they don't engage with you.
• The web can be like hot nightclub - popular today and dead tomorrow. So make sure that your site has stickiness to ensure repeat visitors, and the underlying technology to grow and scale the offerings.
• Create a recognizable brand so people choose your solution, even if competitors offer something similar.
• When seeking funding, show that you have insight about your business and technology and that you are busy creating the solution - both the technology and the customer base.

Current hot high tech areas noted by the panelists include:

• Computer Vision and Augmented Reality driven by cameras
• Big data, leveraging data for platforms around open source (applied to mobile and apps) and Enterprise cloud and virtualization - from network to the applications side
• Social Media 2.0 - beyond connecting just for relationships
• Commerce 2.0 - mobile and shopping and commerce
  

In conclusion, our panel agreed that it's  good time for the right companies and entrepreneurs to seek funding, and together, as a community, we can help more good companies to succeed.

Notes from Break-Out Groups

Mobile 2.0

What are the innovative e-commerce models now appearing?

• Virtual Goods -- people spending real money to buy virtual goods
• Gamification -- adding game behavior to non-game sites; e.g., insurance, food  (often takes form of treasure hunt)
• Mobile Apps selling other Mobile apps -- you give your app away for free, but has ads for other apps
• Applifier
• Appstrip
• Multi-level marketing ("Amway Online")
• Living Social -- special deals each day; if you "take the deal" and get three of your friends to do it, then you get the deal "free"
• Is this essentially a Ponzi Scheme?   (Not really, but the first people to jump on the deal and advertise it widely benefit the most; laggards will not likely get the "free" deal)
• Groupon -- Lots of these are sprouting up now that Groupon has proven model successful
• Only differentiator Groupon has is brand recognition
• Many niche-market versions of this are starting to show up, e.g., liquor.com

Elements of e-commerce 2.0:

• Create a community -- social networking will pervade all forms of e-commerce
• Engage users -- the more users view the site as "theirs", the "stickier" it is -- less likely to go elsewhere, makes price less important
• Examples:
• Threadless -- Not just a place to buy T-shirts online, but where you submit designs and others vote on them
• Facebook -- offers endless customization
• DevHub -- Web site hosting company, but has contests where customers vote on favorite site designs, best tools, etc.

Emerging or nascent trends:

• Mobile payments
• Already common in many parts of the world, U.S. is behind
• In Africa, cell phone minutes have become means for payments in lieu of checks/credit cards (no banking infrastructure for much of the population) -- transfer minutes as form of payment
• Dynamic pricing, especially if combined with location services
• Groupon & ilk is a form of this
• Amazon.com with "Deals of the Day"
• Establish profile for deals of interest
• Ball game with wildly un-matched teams, offer discounted pricing
• Truly last-minute deals
• Walk by movie theater, if near show time and theater has lots of empty seats, offer discounted pricing
• Restaurants -- offer discounts to come RIGHT NOW
• Affinity-related
• People matching services already exist -- you define a profile of what you are looking for, if someone with matching profile is "nearby" you are both notified
• Could also be for other interests
• Learning-based preferences -- increasingly, services will tailor what they show you based on observed behavior
• Restaurant recommendations will highlight preferred categories (e.g., Japanese, Mexican) and suppress those you never pick
• Movie choices
• Clothing
• RFID (tiny, super inexpensive embeddable tags that can be read in close proximity)
• Already widely used for inventory management, logistics, "shrinkage" control (shoplifting detection)
• Hasn't gone consumer yet, even though Nokia has some high-end phones with RFID readers
• Rumored Apple may introduce in a future iPhone model -- could change market overnight

Particular Web Sites People should be aware of:

• Facebook -- accounts for 25% of all page-views on the web
• If you aren't using Facebook, you really are missing a big chunk of the web
• Is it possible to "study" FaceBook, without really using it, and still pick up emerging trends?
• Highlights that people really care what their friends think, influences their (purchasing) behavior
• Twitter
• Seemed like a joke at first -- who would care?
• Lots of innovative uses emerging in communities of all types: companies, classrooms
• Can be a hugely effective marketing channel
• Quora -- latest take on a Q&A site
• In the spotlight right now, because the "digerati" are all over it
• Clever structure has kept quality high, less rants, bogus answers
• Redit growing in popularity, Digg fading
• Simplegeo -- scrapes photos off of Flickr, does pattern matching on backgrounds to identify locations of images and automatically tag them
• Photobooth -- create stories from photos & videos
• Foursquare -- getting old, does it have the staying power of Facebook?

Main Takeaways:

• To be successful e-commerce entrepreneur, you need to try to anticipate which trends are going to go mainstream
• A major new gadget can jumpstart a category (iPhone with apps)
• All kinds of "smart" appliances are coming
• Look for new development tools / platforms -- that can point to a trend
• Or build a new platform or tool to make it easier for others to capitalize (e.g., Twitter feeds)

Social Media

• The PPC (pay per click) model is very challenging to pull off, due to click fraud.
• All services need to connect to Facebook, since that's where your customers are. 
• If you're looking to build a social media solution in a specific industry, find the influencers in your target market and begin to influence them - via sharing of information & content (be useful to them).
• Predictive analytics solutions leveraging social media and cloud may be an interesting opportunity.
• It's hard to pick both enterprise and consumer as initial customers.

The Big Data breakout session focused on the convergence of infrastructure and business analytics. There is no doubt that this market is BIG. It is where enterprise customers are spending their money. It is where large established companies are looking for the next high growth market. It is a market segment in which entrepreneurs have big opportunities.

Big Data is not just one thing. It involves changes in infrastructure from advances in data storage and retrieval to new requirements for real-time processing and analysis of data. It involves new methods of capturing and analyzing the terabytes of unstructured data generated from web pages, video, and the myriad of sensor technology now being deployed. Open source technologies such as Hadoop and MapReduce enable companies to cost-effectively analyze vast amounts of data. New application analytics for social media, sentiment analysis, and business intelligence open new business potential for entrepreneurs and big companies alike.

In this session, we also discuss some practical ideas on how to look at the market and to build a team:

• Market Research. Because this is an emerging market, an entrepreneur must look beyond traditional market research. Reviewing the blogs (a good resource is www.SiliconANGLE.com), direct research with customers using prototypes, and input from the right incubators can help entrepreneurs better understand the overall market and which segments to target.
• Building a Team. Choosing the right team is critical. John expanded on the points from the main session about the importance of choosing the right team, from the founders and first employees to the incubator and the investors. All members of the team must add value.

FountainBlue's First Annual Business Analytics Trends Event was held on November 19 and featured:

Today's Business Analytics Innovations: An Update on What's New and What's Coming

  Facilitator Steve Adelman, Managing Partner, Gartner Consulting

  Panelist Anjul Bhambhri, VP, IBM Information Management Group

  Panelist John Buffi, Director, Business Intelligence and Data Integration Solutions, Cisco Systems Inc.

  Panelist Shivani Govil, VP of Strategy, Business Analytics Solutions, SAP

  Panelist Kristina Robinson, VP of Business Intelligence, HP

Applied Business Analytics in the Consumer, Clean Energy and Life Science Spaces

  Facilitator Sandy Orlando, VP of Marketing, SatoriTech, FountainBlue Program Adviser

  Panelist Amr Awadallah, Founder, VP of Engineering and CTO, Cloudera

  Panelist Melissa Karr, Vice President, Marketing, Brain Resource, Ltd

  Panelist Chris Meyer, Senior VP, Sales and Marketing, INXPO

  Panelist Brad Peters, CEO, Birst 

  Panelist Jeff Veis, Vice President, Industry Marketing and Strategic Initiatives

Please join me in thanking our hosts at SAP for their support for this event, and our ongoing series.

There is no question about the huge potential market in this space. Our panelists likened it to the impact of the Industrial Revolution and the way the goods are produced and delivered, the impact of the Model T and the way it made transportation affordable and available, to Southwest Airlines and the way it provided access to airplane flights to common users, or what Home Depot and WalMart did for retail. It's not that business analytics is new and hot. It's that it has been big and it's going to get much bigger! It's not that it's new and sexy; it has been around for a while, but with the advancements in hardware, software, networks, business models, and the range of opportunities ahead serving users in niche markets, the possibilities are mind-boggling.

We were fortunate to have such esteemed panelists speak to the trends in business analytics and its implications for business and personal users in their day-to-day lives. Given that we are in an age of information, where everyone is inundated by volumes of data, the panelists repeatedly emphasized the importance of making the data relevant and actionable and clean in order to make real-time business and personal decisions which would help maintain a competitive edge, best leveraging time. This is especially true because of the data itself:

• There's so much of it!
• It's coming from so many different sources and systems and places and formats.
• There are structured and unstructured data.
• Privacy issues and security of data is a huge consideration.

There is increasing pressure for entrepreneurial and corporate leaders at all levels to make the best business decisions in the short term and for the long term. Business analytics provides these leaders with the information to make these decisions, but because of all of the above and other factors, it is no easy task to massage information and make recommendations, reports, graphs etc. which help leaders make the right call based on evidence, real time.

Yet this is what's necessary to lead this in age of information. Our corporate panelists talked about the technology innovations which is making it possible to integrate the structured and unstructured data, as well as the governance, privacy and security implications around sharing, collecting and reporting on data, not to mention the demands for integrating data of many forms and types as the company expands and grows, particularly through M&As. The emphasis is on the needs of the user and the volumes of data he/she must consume and process in order to fuel quick and effective decision-making.

The audience was not as interested in the science and technology of HOW big-named corporations will conquer these technology hurdles. It's a given that we will follow our Silicon Valley track record of success and continue to innovate in this intriguing new area. The questions and comments were more around the people, processes and applications for business analytics solutions.

As such, our corporate panelists responded with the application of business analytics in the areas of crime management, traffic navigation, retail management, market analysis, etc. Indeed, the emphasis was on the mainstreaming of business analytics, so that the tools and solutions get into the hands of users who have never had access to these tools before, people who feared these tools even, for their perceived awkwardness of interface and intimidating price points. These users may associate 'business analytics' with scientists in white coats who produce 'clean' (well-validated, easily-integrated) data that is well-polished (with beautiful reports produced by newly-minted MBAs), and given to executives who make presentations on strategic direction based on this data. But stretching the definition and perception of business analytics beyond 'the China effect', used only on rare and special occasions, to the mundane, day-to-day applications for mainstream users will arguably have a larger impact on any business. And companies successful at getting these tools into the hands of these mainstream users and customers, and companies who provide a host of tools and services for these mainstream users and customers will have a clear edge over companies who still think that business analytics is for the elite and on special occasions.

It is clear from our program that the best companies are leveraging business analytics which would drive real-time decision-making for the users so they can increase revenue and increase business value. But it is certainly not just about the data, as it's about the business processes, program management, and people behind the data. It's about providing the information in a form (easy web or social media interface) and format (devices including mobile) that's easily usable to the customer. But it's also about optimizing for security and governance and across issues, strategically, upfront and on an ongoing basis, from the design phase, but also throughout the lifespan of an application, factoring in the evolution of the relationship of user/partner with your company/product.

Indeed, the democratization of data is empowering the user and impacting the role of IT within corporations, the offerings provided by companies, and the way business leaders are evolving their strategies based on the needs of the user. The agile, fast-moving company will offer solutions to users and analyzes how THEY are using the solutions, and continue to refine offerings based on the rapidly-evolving needs of the user, and with this progressively refined approach, better position themselves for success one niche customer at a time.

A challenge within corporations is that different groups will have different objectives and different suggestions and recommendations to executive management. Confusing enough as this is, executive management must also consider governance and security implications on top of these multiple, sometimes conflicting recommendations and reach a coordinated strategy, integrating the various divisions and teams across the organization, capitalizing on the business analytics opportunities ahead.

In addition, one of the obstacles to the massive adoption and proliferation of business analytics solutions for companies large and small is the lack of infrastructure and standards. There is a need for large companies to partner with each other and with smaller companies to create a standard, to write niche applications to target customers using the same standard, and to collaboratively work together to advance the standards, offerings and infrastructure, to better serve users, and help them help providers and analysts upgrade offerings and better serve user needs.

We are particularly good now at processing and analyzing data based on past trends and patterns, but leading edge thinking, technology and business models are also daring to tackle predictive trends and future modeling based on past data, and helping users think through and anticipate future scenarios based on current and past data. With the advances offered by our corporate and entrepreneurial speakers, this grand vision and goal is not as futuristic or as distant as you might think. Indeed, we are in the midst of a sea change, a change in the way we look at data, the way we view decision-making, the way we think and interact with others.

The pervasiveness of business analyst was glaring as our conversations ran from optimizing retail solutions which would help consumers more efficiently buy shoes, to measuring temperature in a bay or oil reserves in the land, to brain training for peak performance and lead generation based on avatar behavior in a virtual conference. With this huge range of options, the possibilities or leveraging business analytics are endless. Below are some tips from our panelists for leaders innovating in this space:

Focus on the User

• Design a jaw-dropping solution for the mainstream user.
• Speak to the needs of the users - the way they want to use tools, the format for communicating which works best for them. As such, social media, cloud, mobile applications and solutions should be a big part of your business analytics strategy and solution.
• The Millennial, FaceBook generation is driving the volumes of data out there, and tipping the balance toward more unstructured less private data.
• The more users we can empower, the bigger the impact for ALL users.

Be Strategic

• Look not just at the micro-trends and the obvious questions impacting you today, but also at the macro-trends and the questions you might not even think to ask.
• It's hard to escape the social and technology challenges of honoring the security and privacy of data. But perhaps layering personal data in aggregate form, much like Brain Resource is doing, will help users understand brain health and build to peak performance within compromising the privacy of any specific users' measured results on specific tests.
• What consumers and users do and how small companies serve and respond to that will trickle up/down to the enterprise much more than vice versa.
• The best business analytics solutions look not just at past trends, but at future predictions, allowing users to 'see around the corners'.
• As we build a new infrastructure to support exploding business analytics needs, there may be a need for a new fabric, a new format which would support both traditional data with columns and schema and unstructured data, perhaps with standardized tags. We already have the hardware/processing/memory capabilities as well as the bandwidth/network to support this infrastructure, so for forward-thinking, agile, collaborative leaders will capitalize on this opportunity.
• Partnering with companies just as Dunn & Bradstreet who value the data itself, and enticing them to leverage the data in a way which would benefit all would help advance the industry for all.

Be Practical

• Always consider the solution from the lens of the customer, and have different lenses for the different customers you serve.
• Make it easy for users to participate and add value for their participation. For example, it would be optimal to ask for as little information as possible (e.g. 15-40 questions online), and generate a valid report based on the input of a huge database of past users, leading to valid feedback with minimal user input.
• Follow the 80-20 rule and err on the side of action. You don't have to have the data 100% right, aim for 80% and iterate quickly to refine the predictions and recommendations.
• Generate baseline reports which users can respond to, rather than giving them a blank slate and asking for input about what would best meet their needs.
• It may appear that there is a lot of lower-hanging fruit in this promising area, however, as with anything worth having, there will be successes and failures as companies move the needle forward for the industry. Keep focusing on the ball, and driving value to the user, and look at the larger picture even if your company is experiencing setbacks.

The winners of the business analytics space will see this opportunity as a shift, and not a threat. They will be leaders and companies who can foster and lead collaboration between companies large and small, working with academic and customers and policymakers in bringing real-time to create cost-effective, value-added, actionable healthcare, retail, clean energy and other business solutions to users who can leverage it and draw value from it, while they shape the suite of offerings to increasingly larger user groups worldwide.

Information and Articles:

• INXPO Article: Virtual Events, Real Business Intelligence http://inxpo.wordpress.com/2010/11/21/virtual-events-real-business-intelligence/
• An ongoing conversation around this topic is available at http://www.quora.com/What-are-you-thoughts-on-business-analytics-trends

FountainBlue's first annual trends in M&As event was held on Thursday June 10, featuring three panels of speakers:

Today's Technology Innovations: An Update on What's New and What's Coming

Facilitator Steve Bengston, Managing Director, Emerging Technologies, PWC

Rudy Burger, Managing Partner, Woodside Capital Partners

James Peacock, Chairman and CEO, NociMed

Roger Royse, Royse Law Firm PC

Corporate Development Panel: M&A Successes and Strategies

Facilitator Edmund Becmer, Partner, CFOs2Go, President, FEI SV Chapter

Shekar Ayyar, Vice President, Strategy and Corporate Development, VMware

Todson Page, M&A Partner, PWC

Charlie Rice, VP  Corporate Development, Symantec

Lily Stoyanovski, Managing Director, Marrod Group, formerly with Oracle, Gilead Science and Accenture

Entrepreneur Panel: Secrets for Successful Exits:

Facilitator Roger Royse, Royse Law Firm PC

Dr. Aaron Berez, CEO, Chestnut Medical

Steve Hoffman, Publisher & Cofounder of Founders Space and a Partner in LavaMind, web games and applications

Betty Kayton, CFO, AdMarvel (sold to Opera Software), mobile advertising

Lily Stoyanovski, Managing Director, Marrod Group, formerly with Oracle, Gilead Science and Accenture

Please join me in thanking our speakers above, as well as our hosts at Symantec and our sponsors at PWC and at Royse Law Firm, all of whom make our work possible.

Below are notes from the conversation:   

The Q1 PWC report showed that venture fundings are in the vicinity of 2009 levels at around 15-20 billion, with the highest investments in the area of biotech, software, clean tech and medical devices. In addition, median exits are 40-50 million, down from the previous 70-80 million, partly due to the collapse of the IPO market, making M&A one of the only exit options. Although there have been an increase in filings in Q4 2009, and the 9 in Q1 2010 bodes well for this year, we are still anticipating a rather soft IPO market this year.

With that said, from the investment banking perspective, there are two times more volumes of transactions this year as compared to last year. And there are and will be specific changes in the venture industry:

1. Syndicate Dysfunction: many VCs are running low in funds and are now unsuccessful in raising new funds. Therefore, whole syndicates of VCs who had collaboratively invested in existing or new deals wind up falling up. If one firm leaves the syndicate, it becomes much more difficult for the remaining firms to carry on.
2. M&A Returns Decreasing: The expectations for M&A returns are now more realistically in the 40 million dollar range, rather than the less sustainable 70-80 million dollar range. Planning for this outcome and building expectations of stakeholders for this outcome will lead to a healthier partnership and relationship throughout the life cycle of a company.
3. Corporates Stepping In: Corporates are filling the investment and partnership gaps as fewer companies get funded, and the returns are attractive enough for them. In addition, corporations are leveraging strategic partnerships and M&As to bolster their internal R&D efforts, allowing them to bring new technologies to their channels, partners and markets.

The panelists commented on some of the hot technology areas primed for M&A activity:

• Software to Customize Solutions based on the needs of the customers
• Media placement, advertising
• Leveraging Data Analytics to better understand customers and communities
• Mobile applications and payments
• Entertainment
• Social media and social gaming
• Community Building
• Providing IT as a service
• Storage and the outsourced management of huge volumes of data
• Security of the data and devices managed - from encryption to authentication and beyond
• Virtualization
• Biotech and Medical Devices, where there are higher risks and rewards

The panelists had the following advice for entrepreneurs who are looking at M&A exits:

1. Be strategic about your partnerships, making sure that your technologies and solutions align with the needs of partners and investors. Know why you'd like to do an M&A and what measurable returns you expect to achieve when.
2. Corporate development folks are looking gaps into their portfolio of offerings, constantly considering buy-or-build options for that space, so think about how your product or service would complement a corporation's offerings and how their infrastructure, channels, and brand can help you both your company and the corporation.
3. Build partnerships and relationships.
4. Timing is everything. Be a step ahead of what's happening, how it impacts your partners and customers, and what opportunities are available as a result.
5. Investors are funding successful serial entrepreneurs, so recruit one for your team.
6. You have to deliver a great product or service, but more importantly, you have to show that there's a market for it, with loyal, paying customers.
7. Run on all cylinders, and be passionate about doing so.
8. There are gaps in the venture funding model, so be creative in filling those gaps, including working with strategic partners.
9. Be realistic about how much you will get for an M&A. It will likely not get the returns of past M&As, but if well business and the transaction are executed, the returns will still be there.
10. Be willing to negotiate valuations. Sweat equity of founders and early employees should be valued and rewarded. With that said, remember that corporate development executives are constantly evaluating buy-or-build solutions, and there may be other sellers who might offer a more attractive valuation, and there might be an internal team providing information about what it would take to internally build a solution comparable to yours, a solution they might already be working on.
11. As a founder, take ownership of the negotiation process. Don't delegate that to board members or investors or others as they may have different motivations.
12. Consider an M&A if it can help open channels to larger markets for your product or service. This could happen first as a strategic partnership, and the conversation may evolve from there into an M&A conversation.
13. To get the best valuations and results, consider an M&A BEFORE you HAVE to think about doing an M&A to exit.
14. M&As can be really complicated, even if you have a small deal. It takes time and resources to complete them. There are generally no short cuts.
15. Consider bridge loans.
16. If you're starting a biotech or medical device company, there are more risks, and more projected rewards. You need earlier investments, and it takes longer to generate results, so plan accordingly, and if possible, also leverage grants and other non-diluted investors prior to seeking funding or strategic partnerships.

When undergoing a potential M&A transaction, the panelists had the following advice:

1. Articulate the value proposition succinctly up front.
2. Make sure that there aren't any encumbrances on the IP.
3. Consider legal liabilities.
4. Be prepared and strategically. Build relationships early.
5. Adopt a team who has experience, knowledge, and track record with successful exits.
6. Work together to build alignment during the negotiation phase.
7. Hit your milestones, particularly when undergoing M&A conversations.
8. As corporates seriously considering buying a company, there will be a lot of due diligence of the company up for sale. Be prepared to be inundated by huge teams of people from the buying side who want to review all relevant information. Be transparent and helpful and patient. Put all the information together and show that you're organized, have nothing to hide and are on top of things. Don't provide information piecemeal, as it takes more time, and does not reflect favorably on the way the business is run. Collect all the important pieces of information, and don't ignore the missing pieces of information, especially if it's related to IP and ownership, even if the documents are dated or reflected verbal agreements.
9. Don't try to hide information that buyers may find unfavorable to the deal. They will likely discover it anyway, and not look favorably at your actions. Put your warts out front and work with them to strategize how to overcome them, assuming that you need to.
10. Get an adviser or consultant that is respected and can help you close the deal. Get one early on so that they know your company and can help you think through the whole M&A process strategically.
11. Be transparent in your communications to all stakeholders during the entire M&A process through the due diligence, but use good judgment on what you can say to whom and why.
12. Consider M&A integration issues and questions during the negotiations.
13. Have the sales plan, development plan, compensation plan, management team, etc put together up front, so that if/when the deal closes everyone knows what to expect, and the integration will be much easier.

The panelists had the following comments about M&A trends:

1. Last year was a tough year for M&A. Many companies held off on making a deal rather than close a deal where buyers and sellers couldn't quite align. Even when there was activity, it generally wasn't a happy event, as the tough economy put many sellers in the difficult position of having to sell, and with IPOs not an option. It was and still is very much a buyer's market, and the scent of blood is still in the air.
2. As many corporate buyers held off on M&A deals, there is more cash for these deals this year.
3. There will be a lot of international M&A activity, which is just starting now, so do consider strategic partnerships outside the US.
4. If working on mobile deals, consider markets outside the US, where the infrastructure and policy might be more conducive to growing a company in that sector.
5. Bridge loans may play a larger role during the M&A process.
6. Hot potential M&A areas include:
1. Cloud computing and the whole ecosystem around that will be hot
2. Internet security
3. Enterprise software and internet applications will continue to be hot
4. Consolidation of semiconductor solutions including wire on chip, broadband, etc.
5. Unified computing with hardware companies like HP, Dell, Cisco and Xerox providing more holistic more integrated hardware and software solutions.
7. Deal terms may be changing where buyers may expect more shared risks with sellers - longer earn-outs, longer escrows, etc.

The bottom line is that it's a great time to consider an M&A. With companies having stronger balance sheets for corporations, pressures on innovating-through acquisition and outsourcing of R&D, low levels of M&A, and declining venture investment dollars, the M&A market is predicted to continue growing. In addition, improving valuations and credit markets will also feed into the M&A markets. With that said, the sellers need to over challenges including regulatory issues where deals are reviewed with much more scrutiny, an unsure recovery from  the recession, a more conservative approach, despite healthier balance sheets and strengths of currencies in international markets. But sellers with a proven technology in a huge market that can execute strategically on their solution are well positioned for a successful M&A event.

Resources:

• Q1 PWC MoneyTree Report, https://www.pwcmoneytree.com/MTPublic/ns/index.jsp  
• The report itself is available at https://www.pwcmoneytree.com/MTPublic/ns/moneytree/filesource/exhibits/Q1%202010%20MoneyTree%20Report.pdf
• PWC's US Technology M&A Insights, Q1 2010 Update http://www.pwc.com/us/en/transaction-services/assets/ma-insights-technology-q1-2010.pdf
• Marrod Group M&A integration services http://www.marrod.com 

Shekar Ayyar, Vice President, Strategy and Corporate Development, VMware

Shekar Ayyar is the Vice President of Strategy and Corporate Development at VMware. He is responsible for aligning strategy across VMware businesses, and for managing VMware's inorganic investments and acquisitions. Previously, he was Vice President of Alliances and managed a group responsible for VMware's strategic engagements with infrastructure partners.

Shekar has more than 15 years of experience with advanced technologies spanning different domains (enterprise software, communications, semiconductors), more than 10 of those in technology strategy and management.

Previously, Shekar was Senior VP and corporate officer at BindView Corporation, a public security software company that was acquired by Symantec. At BindView, Shekar led Product Management and also oversaw the services business. Prior to BindView, Shekar has held senior roles at Instantis and Lucent technologies, responsible for business development and product marketing and management. Prior to that Shekar was a consultant with McKinsey and Company.

Shekar received his Ph.D. in Electrical Engineering from the Johns Hopkins University, and MBA from the Wharton School where he graduated as a Palmer Scholar. He is also an alumnus of the Indian Institute of Technology, Mumbai where he received his bachelor's degree in Electrical Engineering.

Ed Becmer, Partner, CFOs2GO, President Financial Executives International, Silicon Valley Chapter

Ed Becmer is Partner with CFOs2GO and is currently President of the Silicon Valley Chapter of the Financial Executives International Group. Becmer's career brings 27 years of experience as a Senior Financial Executive and CFO in public and private companies. This experience includes corporate governance, SEC compliance and Sarbanes Oxley knowledge and leadership. 

Prior to his current position as a partner with the 2GO Group of Companies, Becmer was with Tatum LLC.  Becmer provided leadership, hands on support and acted as a trusted advisor with a team in preparing the financial records and due diligence to a $300 million technology company in connection with its $500 million acquisition.  The buyer retained Becmer to assist and advise with the drafting of its S-1 in preparation of an IPO. In addition, he has been the Interim CFO for a construction company with revenues in excess of $340 million. He provided financial leadership by saving the company $30 million in connection with a proposed equity exchange during negotiations.  Additionally, he assisted with the company's proposed refinancing of its existing credit line and subordinated debt with a new line of $65 million.

Prior to joining Tatum, Becmer was the National Product Director, Financial Risk & Regional Practice Director for Hudson Financial Solutions (Hudson). Becmer was involved with Sarbanes Oxley initiatives for Hudson at United Airlines, Levi Strauss, Dionex Corporation and other organizations nationwide. Before Hudson, he was CFO and controller at certain public and private companies in various industries. Early in his career Becmer was with Deloitte & Touche & BDO Seidman. Becmer is a licensed CPA (inactive) in the state of California and is a Certified Turnaround Professional - Designate.

Steve Bengston, Managing Director Emerging Technologies, PWC

Steve Bengston is Managing Director of Emerging Company Services (ECS) at PricewaterhouseCoopers. Before joining PwC, Steven had 20 years of experience in a variety of marketing business development and general management roles at several high tech companies in the Bay Area. Most recently, he was Pres/CEO of ynot.com, a leading international emarketing and greeting card company. Previously, he was VP Marketing & Business Development at Worldview Systems, an Internet travel pioneer. At Worldview, Steve helped launch and market Travelocity with Sabre Interactive. Steve has a BA in Economics and MBA from Stanford University. He works closely or sits on the Advisory Board at Time Domain Systems, SDForum, Financing Partners, and the Stanford/MIT Venture Lab, has taught classes on funding/running start ups at UC Berkeley and Stanford, and is active in a variety of other organizations in the Bay Area targeting entrepreneurs and investors.

Rudy Burger, Managing Partner, Woodside Capital Partners

Prior to Woodside Capital Partners, Rudy led the restructuring of Scipher plc which involved the sale of all of the company's operating businesses. Prior to Scipher, Rudy was the founding CEO of Media Lab Europe, a $40M joint venture between MIT and the Irish government.

Rudy has founded five companies, all in the digital media technologies sector.

In addition to being a partner of Woodside Capital Partners, Dr. Burger serves on the boards of several US and overseas companies including Quester Capital Management and Motorola's Research Board. Rudy has a BSc and MSc from Yale University and a PhD from Cambridge University

Steve Hoffman is the Publisher & Cofounder of Founders Space and a Partner in LavaMind which owns & operates Founders Space, as well as numerous other web properties, games and applications.

Hoffman is also a founding member of the Academy of Television's Interactive Media Group and was the Founder & Chairman of the San Francisco Chapter of the Producers Guild.

In 2007, Hoffman founded RocketOn, a social media and virtual world startup, whose properties included Blerp and RocketOn.  Prior to that, Hoffman was the COO of Tap11 (formerly Zannel), a venture-funded startup that provides businesses with advanced analytics and CRM for Twitter.

Until 2006, Hoffman was the North American Studio Head for Infospace, where he ran the US mobile games publishing & development group. From 1998 - 2002, he was the Chairman & CEO of Spiderdance, Hollywood's leading interactive television studio, whose customers included NBC, Viacom, Time Warner, TBS, GSN and A&E. He also consulted for R/GA Interactive, designing projects for Kodak, Disney, Intel, AdAge, and Children's Television Workshop.

In Japan, Hoffman worked as a game designer for Sega, generating new concepts and designs for games and amusement rides. Prior to Sega, he was a Hollywood development executive at Fries Entertainment, where he managed TV development. He graduated from the University of California with a BS in Electrical Computer Engineering and went on to earn a Masters in Film & Television from USC. He is also the co-author of the first-edition of "Game Design Workshop" published by CMP.

Betty Kayton, Chief Financial Officer

Betty has over 25 years of experience in the technology industry, as a key member of the executive team at high-growth, venture-funded start-ups.  Her contribution ranges from strategic planning and fund raising to tactical challengers such as building appropriate infrastructure without stifling growth.  Betty concurrently serves as CFO of several high tech companies (Dropbox, eLearning, Web 2.0, Wi-Fi/mesh networks, consumer products), and previously was CFO at Leapfrog (a leading manufacturer of interactive learning aids), Nominum (internet/telecom infrastructure software), MGA Entertainment (since grown to be the world's largest privately-held toy company), and senior financial management positions at Fortune 500 companies including Fujitsu and Citicorp.  Betty was certified as a CPA while working for Ernst & Young.  She holds an MBA from the University of Southern California and a BA from Pomona College.

Todson Page, Partner, M&A Transactions - PwC

Todson is a partner in PricewaterhouseCooper's Silicon Valley technology M&A practice where he assists clients in their domestic and international acquisitions of technology companies.  Prior to re-joining the Silicon Valley team, he led our Asia Pacific M&A business whilst based in Tokyo, Japan.  During that time he focused considerable effort on the development of our burgeoning China and India M&A practices. His formative years in M&A Transactions were spent in Silicon Valley where he focused exclusively on technology industry mergers and acquisitions.

Over the past 20 years he has amassed a broad range of acquisition advisory and integration experience including domestic and international transactions in the U.S., Europe and Asia. This includes a cumulative 10 years of on-the-ground experience in Asia specializing in cross-border acquisition services. More specifically, his experience includes advising on a number of transactions in the technology, media & entertainment, logistics and consumer goods sectors.

Charlie Rice, Vice President, Corporate Development, Symantec

Charlie Rice leads the Corporate Development group at Symantec, a Fortune 500 company and global leader in providing security, storage and systems management solutions to help consumers and organizations secure and manage their information-driven world.  At Symantec, he is responsible for evaluating and executing mergers and acquisitions, investments and other strategic opportunities.  He advises the executive team on deal strategy and negotiation, and leads transaction execution.  Charlie also oversees Symantec's venture investment portfolio, and is a board member to Symantec's portfolio companies. 

Charlie has spent his career in the technology industry, as an investment banker, consultant and software developer.  He is a frequent speaker and panelist on technology-related mergers and acquisitions.

Roger Royse, Attorney, Royse Law Firm

Roger Royse has practiced tax and corporate law since 1984. He provides services to a wide spectrum of clients, from newly formed startups to publicly traded multinationals, in a broad range of industries. He also practices in the area of angel and venture fund formation.

Roger is widely published on technical tax topics, is a regular speaker for the California CPA Education Foundation and has been an adjunct Professor of Taxation (Property Transactions and International Taxation) for Golden Gate University. Prior to founding the Royse Law Firm, he practiced with the Silicon Valley law firms of GCA Law Partners LLP (formerly General Counsel Associates LLP) and Berliner Cohen, and the New York City office of Milbank Tweed, Hadley and McCloy. Roger is an active member of the American Bar Association Tax Section and Business Law Section.

Roger earned a J.D., B.S. (Accounting) from the University of North Dakota and a LL.M. (Taxation) from New York University School of Law. He is admitted to practice in California, New York, Minnesota, South Dakota and North Dakota, and at the U.S. Tax Court and the United States District Court, Northern District of California.

Lily Stoyanovski, Managing Director, Marrod Group

Building on her 14 years of management experience with Fortune 500 organizations, Lily Stoyanovski founded Marrod Group's post-merger integration advisory services. The Marrod Group consultants bring global expertise and tested methodologies to ensure successful post-transaction execution of their client's M&A strategy.  Now Managing Director, Lily's integration record includes 31 mergers/acquisitions across 23 countries in both the high tech and life science sectors. A former executive at Oracle responsible for strategic initiatives within a P&L line of business, Lily also worked at Gilead Sciences; her management consulting experience includes senior level roles at Ernst &Young, Deloitte & Touche, and Accenture. Lily is active in several non-profit entities and is currently writing her first book on post-M&A integration process best practices, with a target publication in 2011.

FountainBlue stimulates collaborative innovation, one conversation, one leader, one organization at a time through our monthly events, our dynamic communities, our ongoing discussions on entrepreneurial issues, our invitation-only CEO forums, and through our consulting services.

FountainBlue High Tech Entrepreneur Forums were launched in March 2006 and have continued to grow and become an exceptionally high value entrepreneur event in Silicon Valley. These events routinely attract between 50-150 high tech entrepreneurs, intrapreneurs and investors. We run an annual angel panel in January, an annual free-mium-to-premium event in March, an annual M&A event in June, an annual virtual worlds conference in September (http://www.svvirtualworlds.com), and a spring and winter funding road trip 3-month series (http://www.fountainblue.biz/fundingroadtrip.html).

If you are an entrepreneur, intrapreneur or investor, we invite you to sign up for our free mailing list using the form above. We hope to see you at an event soon. (Please note that this event is not for service providers.)

We welcome your continued participation and input and hope to connect with you soon.

• Join our community on BigTent by visiting https://www.bigtent.com/groups/fountainblue
• See the list of upcoming events for the month and register to attend one soon!
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• If you are an early stage entrepreneur and would like to discuss your new venture, suggest some office hours on Mondays, Wednesdays or Fridays between 8:30 a.m. and 1:00 p.m.
• Peruse our web site to find out more about FountainBlue and all our activities
• Send us an e-mail to tell us how we can best serve you! info@sventrepreneurs.com

FountainBlues March 8 Annual Panel: From Free-mium to Premium event,

conducted in partnership with CCICE featured:

Facilitator Sergio Monslave, Principal, Norwest Venture Partners

Panelist Will Cheung, Founder, DuffelUp

Panelist Steve Hoffman, Chief Thinker, ThinkHuge

Panelist Mihir Nanavati, General Manager, Small Office/Home Office, YouSendIt

Panelist Donna Novitsky, CEO, BigTent

Below are notes from the conversation.

Wikipedia defines freemium as a business model that allows for basic downloadable web services which offers premium options for advance or special features. The freemium to premium business model has generated significant interest in the business and entrepreneurial community, with the volume of customers adopting the model, the hundreds of companies profiting from it, and the dozens of companies making headlines from it, including Photobucket. This revenue model is enabling business and personal customers alike to do everything from planning trips to creating communities to sharing files. Indeed, at its best, it is re-inventing marketing, amplifying and enabling brands to connect and be personalized based on user-defined criteria.

The panel provided the following tactical advice to entrepreneurs investigating this revenue model.

First, make sure that you are offering the right unique product or service that would attract freemium users, and functionality/volume/other options which could easily upgrade the services and revenues to the premium model, which users are willing to pay for (e.g. it�s not easily available for free now). There is no substitute for knowing your customer and his/her needs and delivering services that address these needs. If you build a solution without a customer in mind, you may waste a lot of time and money looking for a customer for a built solution.

As you build your company, be fluid with your vision and goals, and respond quickly to the needs of your customers, based on proactive management of detailed data analytics. In other words, leverage technology to understand your users and their behavior patterns, and proactively develop and manage trigger points to funnel the different customer types to solutions that would serve them well, and help your company with exposure and with revenues. Analyze the data to understand the value of each user, whether it�s the frequency and intensity of engagement, longevity of relationship, number of referrals to other prospective users, as well as the amount of money generated over time, and develop triggers and actions that would help increase the value to each segment of user, and the overall number of both freemium and premium users. Also use the data to identify new opportunities to provide services to users at all levels, and to provide user-defined customized services.

When you provide a service of compelling value that is simple to understand, also be clear and transparent about what is free and what is not, whether it�s a difference in features, in capacity (disk space or file size for example), in time (free trial expiration), in number of seats, and in customer class (business vs. personal) etc. (Adopted from Chris Anderson�s Free.) As a company, be clear about when to educate and when to nudge your freemium users about additional services and functionality which might fit their needs, based on an analysis of their personal usage, and the trends of other users behaving similarly.

In addition, be agile and take calculated risks based on data analytics and market/customer research on both pricing and features and solutions. With that said, continue to gather data and respond quickly to if something doesn�t work. Have a plan in place to move over customers who adopted plans that aren�t working for you and your company.

Below is a range of advice regarding pricing freemium to premium services:

• To understand what to charge for your services, do the market research and understand what competitors are charging for which features and how they are moving from the freemium to premium model.
• Charge a small amount initially, just to have payment information in the system, and make it easier for people to make future, hopefully larger payments, and payments on an ongoing basis.
• Don�t charge them too early. Build the momentum for the product or service through the freemium users. Remember that premium users are drawn from the overall freemium customer pool, so the larger the pool, the better the likelihood of getting premium customers.
• Adopt payment models which customers are already using and already understand.
• Corporate and other customers might be wary of free options, and might be willing to pay for the same functionality, as perception means more to them than money. Be willing to sell it to them, and even to target services anticipating this set of customers.
• Experiment with pricing models and feature offerings for each pricing tier.
• Other opportunities for generating premium income for solutions serving communities of users include opt-in advertising, groups paying for no-advertising, groups who want to pay to have their own advertising inserted, upgraded customer service, revenue sharing, shopping etc.

Below is additional advice about growing your user base of users:

• Keep increasing customer delight while working on getting more both freemium and premium users.
• Get members to be ambassadors � provide incentives to tell a friend, conduct contests to generate more freemium usage.
• Develop strategic partnerships to deliver customized services for your users, and allow your users to opt in to these services.

The panel also offered two words of caution:

• In evaluating strategic and revenue-generating ideas, never sell your customer information to others at any cost as trust and transparency are critical for any company.
• Do not divert time and money for the needs of one customer (unless it is just a matter of escalating development plans for planned products and it�s in the overall best interest of the company), but do pay attention to the needs of all customers.

Facilitator Sergio Monsalve, Principal, Norwest Venture Partners

Sergio brings to NVP over 13 years of operational experience in marketing, product management, business development, sales and finance from a wide range of business and consumer technology companies. Sergio is focused on investments in the software, internet, and media sectors. His current investments and board seats include Center'd and myYearbook. He is also a board participant and actively involved with M-Factor, Lending Club, and Picateers.

Prior to NVP, Sergio was Vice President of Product Marketing at Photobucket, which was successfully sold to News Corp in May for $300 Million. Prior to Photobucket, Sergio was Director and General Manager of the consumer electronics division at eBay, which grew from $150 million to over $500 million in gross merchandise sales in less than three years. Sergio was also a Director of New Ventures at eBay, where he pioneered several new marketplaces and initiatives.

Prior to eBay, Sergio was the co-founder and led sales and marketing at Cymerc, which was a hosted software solution for small and medium enterprises. He grew Cymerc from inception to more than $15 million in revenue. Sergio was also an early employee and marketing manager at Portal Software (now part of Oracle). Portal Software created one of the leading enterprise billing software platforms and had a successful Initial Public Offering.

Sergio holds an MBA from Harvard Business School and a Bachelor of Science Degree in Industrial Engineering from Stanford University.

Panelist Will Cheung, President and Founder, Duffel

Will Cheung is founder and architect of Duffel, a visual trip planner, and leads a small team of designers and engineers who are passionate about travel.  Before founding Duffel, Will worked as a project manager at Google and numerous start-ups in the bay area, including Attensity and Like.com. 

Prior to moving to bay area, Will was a senior consultant and project manager at MicroStrategy in New York, where he led a team of consultants and successfully deliver multimillion dollar projects for Starbucks, Citigroup, and Guy Carpenter. As a star consultant, Will attended President's Club and received a recognition award.

Will holds MS and BS in Computer Engineering from Carnegie Mellon University.