Top Talent and HQ2

A popular parlor game around the Raleigh/Durham area of late, like in many other cities, has been handicapping our region’s chances of being picked for Amazon’s HQ2. My guess is that we’re in the top 3 or 4 cities, but hey, who knows? There are lots of pro/con positions for Raleigh (which really means the whole Research Triangle region): ex. available office space plus plenty of room to expand and good housing inventory, but a paucity of public transport. It’s a fun exercise to go back and forth on.

Yet one factor looms above the others, and it’s a persistent source of insecurity by the not just the Raleigh/Durham metro, but dozens of others around the country: the local availability of “top talent.” Specifically, this criticism says that the region in question does not have access to a global pool of people who can run or lead a major corporation. Since people run companies, not being able to tap that pool is a kiss of death. Fin.

The genius behind Thiel’s famous interview question, “what do you believe that no one else does?” is that it reveals where a person sees opportunity. It’s awfully hard to build something new and valuable if you only hold consensus views, after all. So here’s one of mine: 90% of consensus ideas about “talent,” including the one above, are utter nonsense. It’s both a self-serving criticism by Ascelaland devotees and implicitly relies on a whole theory of “talent” that is logically inconsistent and perpetuates a toxic and reductive view of what humans can do.

Continue reading “Top Talent and HQ2”

What people really want

The controversy-du-jour roiling tech this week has been, if you can believe it, how extremely wealthy Silicon Valley tech investors (virtually all white men) feel oppressed. Lots of these guys have been complaining of “censorship” of late, evidently not knowing or caring why that term doesn’t really apply to their situation; but then Sam Altman unburdened himself of his own hurt feelings in a cringe-worthy post in which he explained, evidently without irony, how much freer he felt in the less “restricted” environment of… Beijing.

I don’t mean to dunk on Altman, or the other (wealthy, white) dudes in tech who I’ve heard complain about not being “free” to say whatever they want without consequence. I would only refer them to xkcd, which has, per usual, the most succinct clarification of this issue around, as well as Anil Dash’s excellent rebuttal.

Rather, it’s more interesting to examine the growing popular ennui with the tech-utopian-visionary schtick that I, too, have noticed. It does seem that people are less in thrall to the “crazy, audacious dreaming” thing of late, and are increasingly likely – in the tech press, twitter and elsewhere – to encounter it with frustrated exasperation. I’ve begun doing this more, too.

Continue reading “What people really want”

Learn to sell

From time to time, I get asked for career advice. Sometimes it’s folks looking to get into product management, and others just curious about working in technology generally. I’ve thought a lot about what type of advice I can give that would actually be useful.

A big problem with an awful lot of career advice you hear, particularly in tech circles, is that it’s hopelessly tainted by survivorship bias. Almost all life/career advice from famous rich people is usually useless for this very reason. Beyond that, it seems like the most popular advice you see is “learn to code.” I think this is a mistake, and not very useful for most people. Learning to write code and develop web applications has definitely been a positive in my life, but it’s probably only been marginally advantageous career-wise. I’d certainly encourage anyone to learn, but mostly for personal enrichment, not career advancement.

Instead, here’s my pitch: go do a stint in Sales. If I were early in my career and looking to boost my long-term trajectory, I think is where I would try to start. Even in mid-career, where I am now, it’s something I think about often. More tech professionals should consider it. Hear me out.

Continue reading “Learn to sell”

Why SaaS will stay independent

A while back, the estimable Villi Iltchev published this outstanding piece on “Why SaaS consolidation is not happening.” It’s almost a year and a half old now, but has held up wonderfully. Villi points out a bunch of reasons why the SaaS market has not followed the same M&A path that on-premise software did in the 2000-2008-ish tech cycle, with a special emphasis on the importance of Customer Success in enterprise SaaS. I have some thoughts on enterprise SaaS that take it a step further, but as we close out 2017, his basic point has been proven correct. The Great SaaS Consolidation that many VCs were gambling on isn’t coming. Instead, we have something even better: a broad, burgeoning landscape of SaaS businesses whose need for outside investment is diminishing, whose customer bases are diversified, and whose destinies are bright as growing, independent companies.

Continue reading “Why SaaS will stay independent”

How highly productive companies and nations are alike

I’ve been thinking a lot lately about the origins of productivity. Specifically, how many of the factors that contribute to it are similar between nations and companies.

The big governance factors behind national productivity are pretty well-understood: the rule of law, contract enforcement, private & intellectual property, investment in human capital, political stability. Big-D Democracy is not necessarily on that list (though hugely important for other reasons), but there are certain cultural factors that are often related as well: social trust, egalitarianism, the free flow of information, and openness to new ideas. More generally, there is a sense that as an individual, it’s in my interest to “follow the rules,” because that’s how I will get ahead.

Continue reading “How highly productive companies and nations are alike”

The Distributed Company

I’ve said before that distributed working models – which I prefer to the term “remote working” but whatever – are a disruptive organizational technology cycle that is already well underway. The number of salaried, professional workers who work remotely at least part-time has been growing slowly, but steadily, for two decades.

 

In some professions, this trend is more pronounced than in others. Even in tech, I personally find that remote working is actually much more common than many people seem to think. Remote arrangements, whether just working from home or from another city/state, are frequently granted on the basis of political weight (eg. longtime employees or executives) and/or without labeling them as such. So-and-so employee simply lives elsewhere, but isn’t called a “remote employee” per se.

Like any disruptive technology, distributed working has its critics who dismiss it as infeasible and unrealistic. And to be sure, it’s still improving (albeit steadily). But when I look at the broadening set of tools available to collapse the productive distance between professionals, as well as remote collaboration habits from other fields like gaming, the more convinced I am that this model is going to eat “the office.” One model of a high-productivity firm of the future will be a distributed one, where many or nearly all employees are based in separate towns, cities, states and even countries. This type of firm is able to use technology to most efficiently source talent regardless of location and route tasks throughout the organization, leaving geo-constrained firms at a permanent competitive disadvantage.

Continue reading “The Distributed Company”

There are no GAFAs in enterprise

Many of us who run in software/tech circles tend to form exaggerated notions of just how dominant particularly popular vendors are. I ran across some enterprise software market share numbers recently that I think are pretty interesting to illustrate how our perceptions match up to reality.

Salesforce is currently the leading CRM vendor in the world. Yet that market-leading share is only about 18% of their total market:

Of course, this is a particularly Salesforce-friendly report from IDC. Personally, I think it’s exaggerated – I’m not sure I believe Salesforce has literally double the market presence of Oracle or SAP. Gartner put out a report just last year whose extrapolations wouldn’t match this. Different firms, different methodologies, etc etc.

Don’t misunderstand me – Salesforce is an absolutely tremendous company, and their share is growing fast. Yet for all you hear about Salesforce CRM, would you have guessed that, at most, maybe 1 in 6 enterprise CRM customers use them?

Next, consider Slack. Lots of people, especially in tech and media (two industries whose lanes tend to cross a lot), think Slack is utterly ubiquitous. But it is not. Anecdotally, I know swaths of people outside of tech/media who’ve never heard of it. But more interestingly, IDC also says that in the workplace collaboration software market, Slack only commands about 5% of the market. Compare that with 37% for Microsoft, with their Skype for Business and now Teams products.

Again – Slack is a truly tremendous product, and company. (I’ve personally built a game bot on their platform, which was surprisingly cool!) But I suspect that a lot of tech people hold vastly exaggerated ideas about either how widespread they are in their market, or how easy it will be to displace well-entrenched incumbents in a product space that many customers don’t perceive as critical. (I have a different blog post brewing about that last part.)

Personally, I come from the Marketing Clouds world. Market share numbers there are highly unreliable, closely questioned and never really a good apples-to-apples comparison. Nevertheless, the big three – Adobe, Salesforce and Oracle – constitute the biggest part of the market. IBM still owns a surprisingly large chunk of it, too (again, depending on how you slice the numbers).

As I’ve said before, there are no GAFAs in enterprise. There are no monopolists – just some major players who own big slices of the market, and then dozens or hundreds of others behind. Nor do I see this changing anytime soon. This is great news for innovators. Selling in enterprise is difficult, but for the most part, we do not encounter the same kinds of insurmountable obstacles to adoption that most consumer web products do today. That’s cool.

More on this to come.

 

Related Posts:

 


I send out a semi-regular update with the most interesting stuff I've read recently, as well as a digest of my own blogging. Learn more about it and read old issues, or just sign up below. I won't spam you - promise.

Build versus buy

One very common question that you run into when building enterprise software is customers who ask: why should we buy this stuff at all? Can’t we just build it ourselves?

The build-versus-buy debate is remarkably common. Companies of all sizes wrestle with it, albeit in different ways, in almost every industry when they start adopting new software tools into their operations. Obviously, there is no blanket rule that can apply to everyone’s situation. But after being directly involved in a bunch of these discussions, across a couple of different software markets, I thought I would write down some things that I wish decisionmakers looking at this issue understood better.

Continue reading “Build versus buy”

Social platforms and responsibility

I’ve been mulling some words on free speech on the internet for a while, but a couple of pieces on Tyler Cowen’s blog finally moved me to write them down.

Recently there have been many, many white men on the internet extremely concerned about “censorship,” and a lot of credulous observers giving these absurd complaints the time of day. Most of them have the issue precisely backwards. The internet, and democratic society itself, would benefit from a much stronger sense of responsibility by those who own and control the platforms that matter, and by more aggressively nixing toxic and abusive behavior.

Continue reading “Social platforms and responsibility”

Adobe and Transformation

I’ve written a bunch lately about enterprise software and why its future looks bright. (Check out Tech Has Grown Up and Enterprise Software and the Deployment Age if you’re interested.) I’m gonna continue with that theme in this post, in which I’m going to hit a pet interest of mine: Adobe.

I think Adobe is one of the best-executing tech companies out there today. Its transformation over ten years from a license-based professional packaged software company for creatives into a first-in-class, multi-segment enterprise SaaS solutions vendor is singularly impressive. The pace of their innovation, to say nothing of their rocketship business results, are almost unparalleled. I’m not just talking about the stock price – when you actually understand what they had to do as a company to get where they are today, you have to be astonished. Neither the tech nor HBR-reading chattering classes seem to give Adobe the recognition it deserves for this turnaround. The latter group of graybeards mostly doesn’t understand the magnitude of what this transformation entailed, and the former is too in thrall to the GAFA glitz to care.

Here’s a look at what this transformation into a cloud vendor looks like:

Adobe full-year segment revenue (all figures in $MM)
2012 2013 2014 2015 2016
Creative Cloud $117 $472 $1,268 $2,265 $3,370
Marketing Cloud $556 $663 $798 $937 $1,180

I’m going to give my own high-level view here of how this transformation took place, why it’s so remarkable, and why anyone in enterprise software has a lot to learn from it. This post wound up being longer than I intended, and there’s still so much to say. But here goes.

Continue reading “Adobe and Transformation”