Emu Bob

ECM Acquisitions I Didn't Notice

These two acquisitions happened so quietly during the festive season last year that I didn't notice until today.

Firstly Australian ECM vendor Harvest Road hit the chopping block on December 21st 2007. They appeared to completely melt down last year and sold their assets to Italian vendor Giunti Labs. Founded in 1841, Guinti has to be one of the oldest content management companies around so hopefully their product has found a stable home. CMSWire has some more info.

Then Blackboard closed their acquisition of San Francisco-based Xythos on New Year's Eve 2007 for $25.5 million. This is appears to be a solid valuation of 4.5 time sales - their sales for 2007 were around $5.7 million. The valuation seems more appropriate for a software as a service company and they were mainly a licenses company but then again this is still a reasonable deal for Blackboard shareholders as BBBB is trading at 4.8 times revenues. The much larger, well funded Blackboard is a nice home for their products. Xythos' solid WebDAV-compliant repository has always seemed impressive, at least technically.

Xythos was founded in 1999 and raised a Series A of $6.3 million in 2001, a Series B that there is no info on and then a $4 million Series C in 2003. In 2001 Red Herring mentioned that their Series A had a post-money valuation of $20.2 million so a $25.5 million sale over 6 years later isn't exactly a home run but a whole lot better than nothing.

Apple Design Awards

Apple announced the winners of their design awards last week of which their were two notable winners.

The first is Screenflow. It looks like superb screen recording software that I am downloading as we speak.

The second is Aussie start-up Remember The Milk. I use RTM quite a bit and highly recommend it. Their iPhone app is great. Well done!

IBM Gets Closer to Web 2.0

A few years ago our marketing director and I were chatting with an IBM marketing executive about search engine optimization. We were amateurs when it comes to SEO but we held court for more than an hour and they took several pages of notes. The one thing we knew about SEO was that inbound links improve your ranking.

I mentioned how Microsoft, IBM's sworn enemy, appeared to be quite capable in mobilizing its many bloggers to improve its rankings. Surely IBM, with 386,558 staff, must have a built-in channel that could improve its rankings via links on its employee's blogs? Nothing dodgey... simply a suggestion that the world's greatest portal software was WebSphere and wouldn't it be great if that was what you truly felt that way, Valued IBMer, you could consider a link. It would only be a matter of time before IBM could rise to the top of search engines in their chosen keywords if just 0.1% of their staff used their blogs to link to "service-oriented architecture", "grid computing" or "anything else".

Whilst this may actually be a bad idea as IBM may end up banished from search results entirely, IBM's lack of basic insight seemed to be from another era. A few years on and somebody amongst 386,558 people has clearly started to get the Brave New Web. IBM has launched the IBM Resource Center (or 'Diggable Resources') powered by the Web 2.0 darling Digg.

So far Diggable Resources appears to be an isolated good idea within Big Blue. The small number of "diggs" says that huge army of IBMers still need a kick along. For this idea to truly be successful they need the general public to participate but 370,000 people can certainly give it a good kick start.

Scaling Web Apps

The approach that Facebook is taking to scale features from 0 to 70M users is quite interesting:

The secret for going from zero to seventy million users overnight is to avoid doing it all in one fell swoop. We chose to simulate the impact of many real users hitting many machines by means of a "dark launch" period in which Facebook pages would make connections to the chat servers, query for presence information and simulate message sends without a single UI element drawn on the page. With the "dark launch" bugs fixed, we hope that you enjoy Facebook Chat now that the UI lights have been turned on.

Ning raises another $60M

Marc Andreesen and Gina Bianchini's social networking service, Ning, has raised another $60M at a rather astonishing pre-money valuation of $500M.

Ning has about 230,000 social networks which values each social network at over $2,000 each. I personally have 2 networks which I have setup in the past that have a grand sum of 15 users. I really can't see them being worth $20 let alone $2,000. But no doubt the 80/20 rule applies and there are a small minority of highly successful social networks using Ning. And, of course, investors are buying into the vision of 4M social networks and billions of page views by 2010. By that stage Ning will no doubt be hoping to worth more than Facebook.

Fast Company has a good profile on Ning which talks about how they have built the "viral loop" into their product. Any product, including enterprise software, could benefit from thinking through how to apply a viral loop to their feature set.

The funny thing is that Ning's unassuming offices are opposite Facebook's on Emerson Street here in downtown Palo Alto. I guess Mark (Zuckerberg) and Marc (Andreesen) can stare out the window at each other wondering who has the better business model?

Featured at Web 2.0 Conference

An observant eye caught my face in the crowd photo on the front page of the Web 2.0 conference. I am the one with the backpack in the bottom middle of the crowd.

Who knows, may be next year O'Reilly will invite me to be a speaker and I can have a real head shot? :)

Cook's Tour of Silicon Valley

We had Suneth and Rob in our Bay Area office this week from Australia. A couple of key things on the "tour" I try and get Aussies visiting the Valley to check out:

Park somewhere north of University Ave in Palo Alto. Extra points for spotting parks and buildings from Randi Zuckerberg's videos such as the very funny "Crackberry".

Walk towards University Ave and head towards the train station. Take note of 156 University Avenue, home of Facebook, and see if you can spot Rani's less famous brother Mark ducking out for noodles.

Cross the road to 165 University Avenue and look up! See where Google, PayPal and Logitech all got started.

Walk up to 451 University Ave to the Apple Store to lust over an iPhone and hope that it will be out in Australia sometime soon.

Head back down University Ave and turn on to Ramona Street for N.O.L.A. NOLA is a fun bar/restaurant with New Orleans style food and crazy artwork like nothing you have seen in Australia.

Finish up for dessert and an espresso across the road at Coupa Cafe - the best coffee shop in Palo Alto from a single estate in Venezuela. They serve the best coffee I have tasted anywhere in America. Filled with start-ups, VCs and students. You know it is cool because 80%+ of the laptops are Macs :)

If you still have some time you can stroll the few hundred metres to 367 Addison Avenue to see where it all started in 1937... the HP Garage.

The following morning check out the nearby Buck's at Woodside for breakfast. Be sure to write your business plan on the back of a napkin... as Netscape founders once did, allegedly.

Producing a screencast

We recently co-hosted a webinar with Tony White of the Gilbane Group discussing best practices for improving the user adoption rates of web content management systems. To make the content more widely available I wanted us to produce a nice online video of the webinar... something that I thought would be relatively simple but alas was not.

Here are the results of the efforts, documented for next time we (or someone else) would like to do this. Part of the reason of putting so much effort in this time around was to get our 'system' down so that we can produce many more screencasts in the future.

We use GoToMeeting for hosting our web meetings ("webinars") and for the most part it works well. But its screen capture of a meeting is in a proprietary codec that is only compatible with Windows Media Player on Windows XP. It doesn't even run in Vista!

To re-encode the screen capture of the webinar we used Camtasia to capture the screen whilst the webinar was replayed. Camtasia was excellent for also mixing in the MP3 audio file we had from the audio conferencing provider and producing a variety of outputs. In fact, I would use Camtasia on a spare machine to record the whole thing live in the future.

The next challenge came producing a video in the correct format for online. Camtasia has some native Flash export capabilities but it wasn't embeddable to the same extent as a Youtube video. I really wanted I high quality Youtube-style Flash video of the screencast. Camtasia's native export is not a single embeddable Flash movie and only worked well in a standalone window.

Screencast.com, by the makers of Camtasia, looked like it would solve my problems but alas it crashed when I uploaded a ZIP of the Flash movie.

Most of the online video providers such as Youtube, Google Video, Veoh, etc. all accept Quicktime files so I exported from Camtasia as Quicktime using the very useful video encoding settings for Camtasia I found from Digital Inspiration.

I won't go into great detail about why pretty much all of the video providers were not suitable but the reasons generally fell into a) poor quality, b) limited length (e.g. Youtube is <10 mins) and c) too consumer-ish (e.g. inappropriate ads). The best one I found by a country mile was Revver.

Here is the net result of the process:

Standalone vs. Add On

I had a meeting with a VC friend of mine this morning. He is a young switched on guy and I value his feedback on our plans. The coffee at Coupa Cafe is always good too :)

His broken record for me this morning is that to really get Ephox to "blow up to the next level" that we really need to get our positioning alongside our partners such as IBM, Vignette and EMC correct.

Essentially his view was that it was very important for most of what we are doing to be seen as a standalone solution that complements and integrates with our partners but is not 100% joined at the hip as a "add-on". Many widget companies (e.g. the plethora of Facebook applications) would be familiar with this concern. Leverage your large partner by all means (e.g. Facebook has 40M+ users) but use it as a means to an end of building a relationship with that end users which extends beyond that particular platform.

Channel strategy is a fine line to walk and no doubt a challenge many if not all entrepreneurs face. If anything I see most entrepreneurs under-utilizing the possibilities for partnerships with the likes of IBM or Facebook. But I guess the point is that even when you fully appreciate how fantastic these relationships can be they should be seen as a stepping stone to building a great standalone company with standalone customers, joint customers, white labeled customers who don't even realize you exist and customers somewhere in between.

I would point to the strategies that other great "complementers" such as enterprise search companies (Autonomy, FAST), instant messaging security (Facetime) or email compliance (Postini) as good models for blending OEM, channel and end user paths successfully.

The trick, in my humble opinion and with respect to enterprise software, is to have an OEM offering that is at least as good as anything else on the market or anything that a vendor could do internally and then produce an end user "upsell" offering which is even more powerful and compelling. All whilst continue to complement, not compete against, your partners. Simple right?

Safe havens from uncertainty

Who would have thought you would read this sort of comment from Forbes after recent years:

Tech stocks are rising Friday as investors continue to look for safe havens from uncertainty in the financial sector.

Forbes are commenting on content management vendor Open Text rising 24% in one day after announcing strong results. What a roller coaster tech companies have had in the past 10 years!