fantasy founder - what if your eyeballs make you (not google) money?

Kicking off an occasional series (like fantasy vc) about products or companies that I’d like to build or see built someday.

--

Two thoughts:

• Thought One (from fantasy vc - cumulus)— Either you disrupt by doing something new. Or you disrupt by changing the supply chain, removing middlemen, disintermediation (or consolidation of intermediaries unto yourself?).
• Thought Two (from facebook, instagram, snapchat and you the product)— The cost of everything Facebook does to create and run Facebook is the cost of acquiring the product—your attention. Facebook sells your attention to advertisers.

Here’s the idea:

• If your attention is the product being sold by some third party to the highest bidding advertiser, why aren’t you getting the proceeds from that sale? 
• What if you had a way to sell your units of attention directly to the advertiser and get paid? 
• And what if nothing about how you use the web changed? 
• Except that now you get a check in the mail or money deposited in your bank account every month.

So, how might this work? An easy (in the sense that we’re not inventing anything new) approach: use ad block technology to strip out everyone else’s ads and insert ours. Have a plugin for each major browser. Create (or jack into an existing) an ad network to source the ads. And give users (for example) 65-75% of the transaction, claiming the rest as a transaction fee to run the business.

The point would be to give you most of the profit being made off your attention.

It should be profitable. But mainly, I’d like to see if  something sustainable can survive that puts a noticeable dent in advetising-driven business models. 

Why? Because I don’t care to have my attention sold. Because it’s grossly inefficient to pay for, say Google searches, by maybe being made more likely to buy some product part of the profit for which turns into the operating cost of some company that in turn spends that money on advertising on the web. There are tons of middlemen in that chain taking their cut of the money I could just pay Google for the damn search capability without fueling the consumerism, growthism, more-ism that prevails.

P.S. Prior art: AttentionTrust

technology analyst 101 for startups - wrapup

It so happens that when I was at Gartner I spent a fair bit of time with startups. Many of whom didn't know what to do with me. Or thought they did and were sorely mistaken. Thus a 101 on tech analysts for startups, finished here. :)

Tech Analyst 101 for Startups

Part One - introduction to analysts / what they do

Part Two - why you want to talk to them / what they can for you

Part Three - how to engage with them / what you should do with them

Part Four - wrapup / tl;dr and tips from analysts

—

Part Four - Wrapup 

tl;dr

Analysts are not press.

Analysts serve: end users, vendors, investors.

Analysts provide procurement, product, and investment decision support.

If your customers are other startups or bleeding edge technology companies, analysts are probably useless (unless they’re RedMonk and you care very much about developers).

Otherwise, analysts are used by your customers, acquirers, and investors to understand, evaluate, and position you. Whether you like it or not.

Figure out who the right analysts are that cover what you do and brief them regularly.

The right analysts can help you with strategy, marketing, product, business development, and sales—if you become their customer.

—

What other analysts (current and former) have to say about it

Roughly presented in the order in which they were received on twitter. :)

Biggest thing is to accept that you need help, and more importantly, where you need help.

- Steve O’Grady (RedMonk) // @sogrady

(1) Have a realistic perspective on what your place is in the ecosystem, competitive landscape. (2) Analysts are not cheerleaders. (3) Analysts there to give constructive criticism so tell you your challenges and deliver a solution (not just saying you suck).

- Vanessa Alvarez (ex-Forrester) // @VanessaAlvarez1

(1) Make sure your talking to the right analyst - everyone's time is wasted if your not talking to the right guy. (2) Show understanding of your limits, no startup is going to solve everything, understand your limits & sell what makes you different. (3) The best thing you can show me is actual product, not powerpoints (but I'm a tech analyst).

- Gunnar Berger (Gartner) // @gunnarwb

Get your story straight. What market are you in, and how are you different there? You probably won't create a market for yourself.

- Jenny Sussin (Gartner) // @JSussin

Don't say, "Oh, you're a woman. We just assumed you weren't technical." Really nothing beginning with "Oh, you're a woman..."

Also, the startup should assume the analyst understands the area they cover. Explaining the basics is a waste of time.

- Lydia Leong (Gartner) // @cloudpundit

Do your homework. Don't waste time brainwashing (doesn't work). Understand that my goal is not trashing you but protecting my clients.

Don't expect that I suggest or recommend slideware to my clients.

- Alessandro Perilli (Gartner) // @a_perilli

Whenever I speak to traditional vendors, they are always interested in partnering/acquiring disruptors. Make [my] list.

I WANT to hear from more startups. Rarely hear innovation coming from "traditional players”. Show me how you solve real probs.

Be prepared, you only have one chance to make the first impression. Have seen some terrible presos from startups.

- Rick Holland (Forrester) // @rickhholland

I have clients (end user & vendor) who tell me they want to hear about you. Some want to partner, etc. Others may participate in a beta.

Use briefings, twitter, email, LinkedIn messages, informal chats via phone, and meet up at an event/conference.

- Heidi Shey (Forrester) // @heidishey

Keep it real. No ass kissing BS.

- Chris Wolf (Gartner) // @cswolf

I loved hearing from founders who were pissed off about the way something worked/cost/etc and how they wanted to fix the problem.

Get the problem space and market failures identified before feature/function or speeds/feeds or at least understand that I could help validate/refute/ adjust the start-ups assumptions on that front.

- Abner Germanow (ex-IDC)// @abnerg

Why should a customer talk to you? Don't play to the analysts ego!

- Matt Eastwood (IDC) // @matteastwood

If you don't understand the value of analysts, find a trusted third party who does and ask them.

- Donnie Berkholz (RedMonk) // @dberkholz

Unfortunately, a lot of people see analysts as an extension of marketing #wrong!

- Floyd Strimling (Platen Report) // @platenreport

Why? Messaging review, collateral review, product strategy, competitive analysis, trends, futures.

- Jonah Kowall (Gartner) // @jkowall

Shed assumptions, reach out and touch someone. (Not all) analysts bite!

- Jarod Greene (Gartner) // @jarodgreene

The more forthcoming you are, the better. If you're just giving us marketing BS, save your breath.

- Wendy Nather (451) // @451wendy

Analysts are usually micro or macro focused. Figure out which type they are. Act on your goals for interacting with them, not theirs.

- Michael Cote (451) // @cote

Don't tell me how you are special for reinventing the wheel. Highlight competitors and what makes you different/worthwhile.

- Trevor Pott // @cakeis_not_alie

Do you have time to keep track of the market? You’re not working hard enough. Hire us.

- Merv Adrian (Gartner) // @merv

Make it a regular conversation instead of a PR pitch at the time of need. Medium has changed. With blogs and twitter, more non traditional avenues are available through the "independent" analysts—easier access to these analysts than the traditional ones. Journalists prefer a quick check with them than the trad path to trad analysts.

- Krishnan Subramanian (ex-analyst) // @krishnan

Don’t be shy. Just reach out and build a relationship with us.

- Ben Kepes (independent) // @benkepes

Be open. Inform with proof points. Do it often.

- Eric Goodness (Gartner) // @EFGoodness

Quick answers to questions don't guarantee inclusion, but slow answers guarantee exclusion.

- Eric Knipp (Gartner) // @erichknipp

—

Suggested reading

From RedMonk: The Startup’s Guide to Working With RedMonk

From Jeremiah Owyang: What an Effective Analyst Briefing is Like

From Chenxi Wang (Forrester): Be A Good Marketer And Win Over Your Analyst In 8 Slides

From Michael Cote (RedMonk, 451): Dealing with industry analysts for startups 

—

Have questions? Need advice? Etc? Feel free to ping me on the twitters: @aneel

technology analyst 101 for startups - how

At Gartner, I spent a fair bit of time with startups. Many of whom didn't know what to do with analysts. Now that I'm other side of the table, here's a 101 on tech analysts for startups.

Tech Analyst 101 for Startups

Part One - introduction to analysts / what they do

Part Two - why you want to talk to them / what they can do for you

Part Three - how to engage with them / what you should do with them

Part Four - wrapup / tl;dr and tips from analysts

—

Part Three - How

What not to do

The tendency amongst startups, especially those that outsource AR (analyst relations) to PR firms, is to treat analysts like press and try to get written up. But most of what analysts write is behind a paywall and targeted at very specific audiences. Also, nothing you do can make them write about you. They don’t win by writing about you, unless of you’re worth writing about. In which case, it’ll happen anyway if they know you exist and why. So setting "getting into such and such report" as the goal is basically a colossal waste of time. :)

--

What to do

In the typical analyst model, there are two fundamental forms of interaction you can have with them:

• Briefing: Any vendor can brief an analyst—no $ or being a client required. Briefings are one-way, you -> analyst. They can be requested by your or the analyst. As an analyst, I used to request many briefings with startups that I heard about through the grapevine or read about elsewhere.
• Inquiry or advisory: You must be a client. Inquiries are two-way, you <-> analyst. You get to ask questions, get feedback, have a dialogue, drill the analyst on their views.

Briefings

No matter what, you should always brief the right analysts about what you do and any significant changes in your business. "Significant changes" include things like new funding rounds, new notable customers, major product updates, upcoming announcements. The right analysts are the ones whose coverage area(s) overlap with whatever you do or are adjacent influencers. For example, if your product is a mobile only SaaS CRM app, you probably shouldn’t brief an analyst whose primary coverage area is supply chain management. Figure out what analysts cover through their profiles, published research, LinkedIn profiles and what they're talking about on social media. 

What happens when you brief an analyst well and regularly:

• You stay in the front of mind when the analyst is thinking about the market space you operate in and they might write you up in a research note as an example or even in a list of vendors to watch or something. 
• When one of your potential customers (that you might not even know about or be targeting) asks about or is looking for something like what you do, the analyst is more likely to suggest they have a look at you or mention you.
• When a customer you are trying to land asks the analyst whether they should consider you, they have something to say other than “never heard of them, try this other thing that’s getting some traction instead”. 
• When a potential acquirer (that you might not even know about) asks about or is looking for something like what you do, the analyst is more likely to suggest they have a look at you or mention you.
• When a VC or other investor-type asks about you, the analyst has something to say other than “never heard of them, but I know this other thing that’s in the same space that’s getting traction.
• When the press ask the analyst about your market segment, the analyst might actually mention as an example.
• When the press ask the analyst about you, the analyst has something to say other than “never heard of them, but I know this other thing that’s in the same space and getting traction”.

What you can do if you brief an analyst well and regularly:

• You can refer potential customers to them for an objective 3rd party gut check
• You can refer potential acquirers to them for an objective 3rd party gut check
• You can refer investors to them for an objective 3rd party gut check
• You can refer press to them for quotes and an objective 3rd party gut check

Inquiry

If you choose to become a paying customer of an analyst firm, you can do inquiry—which basically means you can call up and ask questions, send in documents and get them reviewed, etc. The major benefit to inquiry is that you can ask all kinds of questions and get serious, sometimes useful, answers.

All the things that I put under the heading “What analysts can do for you directly” in Part Two they can only do if you’re a paying customer:

• Help with message development, testing, and segmentation
• Help with product strategy and roadmap
• Help with business development strategy and tactics
• Help with pricing and packaging

Color outside the lines 

You don't have to only follow the typical analyst model and use the formal channels. Reach out on Twitter, LinkedIn, etc. You should be building awareness and interest in what you do through those channels before, or in conjunction with, formal inquiries and briefings.

--

General tips

If you are selling into any kind of business that is NOT another startup or at the bleeding edge of technology, there is an analyst out there who has influence on your customers.

Figure out whether your customer, investor, acquirer, or press base overlaps with that of any given analyst firm. Brief every analyst that it might. The more overlap, the better and more regular the briefings should be.

What to include in your first briefing:

• Company overview, founding team, investors, investments and total investment amount
• Vision, mission, value prop, use cases, target customer segment(s)
• Who you think you compete against, who you actually compete against, and what differentiates you
• Product overview, architecture, demo if possible (and if not, on followup); and be prepared to go deep technically if needed (bring the head of product or engineering, if you’re talking to someone like Lydia)
• Actual customers, why they bought, and any customer references that would be willing to talk to the analyst

Consider paying for a seat/license to an analyst firm only if you know for a fact that they (or particular analysts there) are influencers of (i.e. directly serve) your target customer segment.

Always brief or inquire with adjacent analysts—especially if what you do crosses categories or coverage areas. You want to get multiple angles on what you do and get yourself into the heads of whoever might touch upon your product area. Also, analyst reports get peer-reviewed inside (the good) firms; so the more analysts there are who will say good things about you, or provide support for your claims, the better.

Consider attending an analyst firm conference (e.g. Gartner Data Center) if your target customer segment will be present. I can’t speak for other firms, but Gartner conferences are attended by a surprising proportion of actual executives with buying power. I can’t imagine better qualified leads coming from any other kind of industry event.

Find out if your VC is a customer of any relevant analyst firms. Have your VC do inquiry for you! Or next time the right analyst comes by in person to visit your VC, make sure you’re in the room. :)

Most firms will do a free inquiry session as a POC (in person or on the phone). Take advantage of that. :)

—

Have questions? Need advice? Etc? Feel free to ping me on the twitters: @aneel

facebook, instagram, snapchat and you the product

Some simple ideas from broadcast television/radio/etc:

• The station buys your attention with entertainment, news, etc.
• The station sells your attention to advertisers (who created the station in the first place)
• You are the product
• Advertisers are the customers
• The cost of everything the station does to create the entertainment, news, etc., is the cost of acquiring the product—your attention 

Transpose station with Facebook:

• Facebook buys your attention with entertainment, keeping in touch with friends, etc.
• Facebook sells your attention to advertisers
• You are the product
• Advertisers are the customers
• The cost of everything Facebook does to create and run Facebook is the cost of acquiring the product—your attention
• The more of your attention Facebook has, the more it can sell
• When Facebook bought Instagram for $1B (ignore the actual number), it bought the attention of 30M users at something like $33 a pop
• That’s 30M more units of your attention to sell to advertisers
• In order to keep making more money, Facebook has to sell more (and better) of you to its customer the advertiser
• At some point, Facebook’s organic user growth has/will drop off and thus its supply of you—the product—will become constrained
• So Facebook must go out and buy your attention wherever it is, be that Instagram, SnapChat, WhatsApp, whatever in order to maintain its supply of product (you)

The real question...Is $33 a pop a good price to pay per unit of your attention, given

• The cost to run a service like Instagram AND
• What advertisers are willing to pay to plaster themselves in front of your eyeballs everywhere your eyeballs might roam AND
• Whatever measure of “quality” you can apply to the particular unit of attention you give to Instagram?

Replace Instagram in the story with SnapChat and that’s how I’d look at whether $3B is a good price to pay.

Replace Facebook in the story with any other advertising-selling business that does not charge for what you as user get from it.

Then consider what most of the talent in the technology world is out there doing. 

And finally, what would you do if the money these companies are getting from selling your attention went to YOU instead?  

Hat tip: this post 100% inspired by Benedict Evans’ post on Instagram and Youtube.

And finally, this:

Attention is the currency of rich people.

— Paul Ford (@ftrain) February 13, 2014

technology analyst 101 for startups - why

At Gartner, I spent a fair bit of time with startups. Many of whom didn't know what to do with analysts. Now that I'm other side of the table, here's a 101 on tech analysts for startups.

Tech Analyst 101 for Startups

Part One - introduction to analysts / what they do

Part Two - why you want to talk to them / what they can do for you

Part Three - how to engage with them / what you should do with them

Part Four - wrapup / tl;dr and tips from analysts

—

Part Two - Why

Remember that their customers are users, makers, investors. If they work with your (potential) customer, your (potential) competition, or your (potential) investors—chances are you should be talking to that analyst because.. 

What analysts can do for you indirectly:

• Users: Tell them you exist and are worth looking at for project X.
  • Customers will ask analysts about you, your product, your potential, your competition, etc.
• Makers: Tell them you exist and are worth buying for product gap Y.
  • Big vendors will ask analysts about you, your product, your team, your potential, your competition, etc.
• Investors: Tell them you exist and are worth investing in for thesis Z.
  • Investors will ask analysts to gut check your pitch, during due diligence, and to verify your product-market-fit. 

What analysts can do for you directly:

• Marketing: Message development, testing, and segmentation—
  • Are we using the right words? Does the story make sense? Are we actually articulating value? Are we saying anything compelling? 
  • How do we create the end user, influencer, and buyer versions of the message?
  • Will this work with a foreign audience? Will this work with partner of type Y? Will this work with investor of type Z?
• Product: Roadmap and strategy—
  • Is this the right strategy for getting into market X in front of buyer Y competing against vendor Z?
  • Is this the right roadmap? Should certain features get prioritized over others for customers of type X? Or for differentiation amongst 5 known competitors?
  • What aren’t we thinking about? What are we missing? Where will we get steamrolled by incumbents or competitors?
• Business Development: Strategy and tactics—
  • Should we work with partners? What kind? Which specific ones?
  • What’s the best model to go to market with partners? What should partner agreements and contracts look like? How do we keep from getting screwed and/or sued?
  • What do we have to do to enable and support partners? 
• Sales: Pricing and packaging—
  • Is the product packaged in a way that makes sense and matches how end users consume this kind of thing?
  • Does the pricing make sense? Is it too low? Too high? How does it compare to all the other vendors in the field?
  • What will the objections be? Who’s the real buyer? Who are the influencers? Who are the likely champions? 

—

Next, how you should engage with analysts.

technology analyst 101 for startups - introduction

At Gartner, I spent a fair bit of time with startups. Many of whom didn't know what to do with analysts. Now that I'm other side of the table, here's a 101 on tech analysts for startups.

Tech Analyst 101 for Startups

Part One - introduction to analysts / what they do

Part Two - why you want to talk to them / what they can for do you

Part Three - how to engage with them / what you should do with them

Part Four - wrapup / tl;dr and tips from analysts

--

Part One - Introduction

If you're going to deal with analysts at all, you should know what they are and what they do. 

Although blogging and byline articles blur the lines, Analysts are not Press.  

Press may do analysis (the best do). Analysts may report on news (the worst do). But analysts are not press AND press are not analysts. Both may be pundits, though. 

Also, technology analysts are not financial analysts. Although the latter are frequently customers of the former. 

"Independent" analysts are rarely independent. They tend to be pay-for-play and rely too much on vendor cash to keep afloat. It's hard to cobble together a living as a firm-less pundit without being compromised. There are exceptions, but not many.

Many analyst firms are pay-for-play. Many will write whitepapers and "advertorials" that are underwritten by vendors. I find these (after too much experience) highly suspect and particularly worthless. But YMMV, because depending on your target audience, they can be effective "offers" that convert SEM dollars into form submissions.

Top tier analyst firms, the ones that command the highest premium and respect, tend not to do those sorts of things. They run on reputation and can't afford to tarnish it. Typically, they'll fire any analyst found to be trying to shake down vendors for cash (directly or indirectly). Or they'll fire any analyst found to be hiding a conflict of interest (e.g. personal financial stake in a vendor in the analyst's coverage area). 

What they do:

1. Provide independent analysis on technology areas and vendors and products. This includes things such as trends in a specific tech (e.g. MDM), vendor position in the marketplace (e.g. Magic Quadrants), and product fitness for particular purpose or use case or end user. This analysis is typically published in written form (and spreadsheets) and includes both quantitative (e.g. unit sales) and qualitative (trend derived from end user interaction) "research"--which frequently incorporates actual primary (the big firms have in house primary research functions) and secondary research.
2. Provide "advisory" services to those who subscribe to the research products. This is typically in the form of "inquiry" on the phone where a client will call up and ask to speak with or get routed to an analyst covering a specific topic to discuss a particular issue in depth (e.g. Can you replace ProductX with ProductY?). It can also be in the form of in-person sessions with presentations.
3. Run conferences.
4. Provide consulting services (usually an independent arm of the firm) which produce written reports and the usual high-end IT consulting work products.

Who they serve:

• Users: technology buyers-- typically the bigger end of SMB up through the largest enterprises and state/federal agencies
• Makers: technology vendors-- early stage startups through the biggest, most entrenched incumbents
• Investors: who invest in makers-- VCs, investment banks, merchant banks, private equity, hedge funds, institutional investors

How they are used: 

• Should I upgrade X or wait a cycle or bring in an alternative for a POC to use as a lever to get better license terms for the upgrade or abandon this line of inquiry altogether and let X age out before replacing it with Y from a promising new startup?
• Is it the right time to get behind trend X? What kinds of impacts will my current spread of development, operations, organization, and applications suffer?
• Etc.
• How do I prioritize these 10 features on the product roadmap and position myself best for what end user of type X sees as the gaps in all the products out there today?
• What is the right arrangement with my channel partners to get new product X into new market Y? And which partners are the right ones that hold the highest degree of influence in that market?
• Etc.
• Which of these 5 startups are likely to survive the next 2 years and make it to the point of being acquired and who will most likely acquire them and what are the competitive dynamics of big players A-D that will impinge on their success?
• How will the rise of technology X affect legacy business Y of incumbent Z?
• Etc.

Fundamentally, what analysts provide is decision support for procurement, product, and investment.*

Fundamentally, what analysts do is information arbitrage. 

Their perspective, domain expertise, and context should allow them to draw conclusions that are very hard to reach otherwise and then to present those conclusions in grokkable form to clients. 

--

Next, a look at what analysts can do for startups and how you should engage them.

*There are exceptions, such as firms that are purely vendor focused or specialize in very targeted areas (e.g. RedMonk - read their guide!).

fantasy vc - cumulus

Continuing a series on startups I'd put a bet on if I could. 

Pundits and analysts like to cite SDN, NFV, Open Compute Networking, and the ever greater capability (thus usage) of merchant silicon as harbingers of commoditization. I think "commoditization" is the wrong word, used loosely without any regard for what it actually means. Rather, what we're seeing is [maybe] the onset of a kind of x86-ification or open-systems-ification of networking. Given networking (telegraph, 1844) is historically behind compute (Babbage, 1830) systems, this is not without precedent. ;-)

So my second Fantasy VC bet is Cumulus. My introduction to Cumulus was JR pulling up the OS on his laptop and handing me a bash prompt.  

Either you disrupt by doing something new. Or you disrupt by changing the supply chain, removing middlemen, disintermediation (or consolidation of intermediaries unto yourself?). When was the last time any significant disruption happened in networking? Arista looked like it was going to stir some things up, but has more or less ended up as a niche version of the typical vendor. But it did take a step in the direction Cumulus continues down by abandoning spinning it's own silicon and focusing on Linux-based OS and hardware packages. 

[This is where people with history in networking start berating me for glossing over all the other attempts and examples and acquisitions and research and….] 

Put these things together:

• Network management is a mess, has been a mess, and continues to be a mess
• Config automation is ascendant
• Application-centrism is ascendant
• Network gear is made up of specialized computation machines; why should it be isolated from the same historical progression as has happened with other kinds of computation machines?
• There's precedent for OS/hardware independence
• Has anyone ever cut out OEM's before and made distributers/VARs into the only packagers for product? What happens when Channel gets to command the margin?
• There is a market [small but potent] for mix and match network hardware and operating systems
• Every network incumbents' margin structure is someone's opportunity and those margins are fat
• Mainframes, Power Systems, Superdomes, etc., are niches while most servers sold are a variety of x86 hardware + standard OS packaging exercise

That's not to say that they're guaranteed success. Or won't get crushed by an incumbent or other party. Or even scooped up before they become too successful. Just that I would've placed that bet.

Disclosure: Cumulus is not in my former coverage area and I have no financial interest in them.

whiskey and gin

Do you know how whiskey is made? 

Something I learned from a my friend Dave the professional spirits geek: it takes significant up front capital and enough in the bank to wait it out years before having the real product. A terrible product is easy to come by in a few months. What anyone in their right mind would call whiskey takes time, indie-hipster-micro-distillers notwithstanding.

So what do you do in the meantime if you're not a retired banker or a trust fund kid? You make gin.

On the way to making whiskey, some of your product can be made into gin which is sellable at a hefty enough margin to keep things humming along while the real stuff is maturing, finding its character. [No offense to gin.] 

Witness the good work of the New York Distilling Company. 

And witness Uber (maybe). Here's Kottke repeating Michael Wolfe on Quora [notes in brackets mine]--

If you think of Uber as a town car company operating in a few cities, it is not big. [Gin.]

If you think of Uber as dominating and even growing the town car market in dozens of cities, it gets bigger. (Data point: there are now more Uber black cars in San Francisco than there were ALL black cars before Uber started). [Gin.]

If you think of Uber as absorbing the taxi markets, it gets pretty huge. [Gin.]

[...]

If you think of Uber as a giant supercomputer orchestrating the delivery of millions of people and items all over the world (the Cisco of the physical world), you get what could be one of the largest companies in the world. [Whiskey.]

The hard parts:

• Not getting distracted making the gin.
• Not dipping into your final product before it's ready.
• Not siphoning off too much of your product into gin making before it hits the barrels.
• Not being so successful with gin that you abandon the warehouse of hard work and hard won patience altogether.

What are you making?

fantasy vc - metacloud

Kicking off a series about bets I would've placed if I had the money. This is something I very much wanted to do--very much could not do--when I was at Gartner.

I don't know the numbers on "real" (read: revenue generating) OpenStack adoption, growth, etc. . 

I do know there's real traction. 

Suspicion: it's with very very few vendors. Money is being made but success is concentrated.

There are only two startups in the space I would bet on. One, I have a conflict of interest regarding. The other is Metacloud. Both aren't really OpenStack companies. OpenStack is just a vehicle for the thing they actually do.. In Metacloud's case, what they do is remote ops (as a service!)

Put these things together:

• There is a market for private cloud (whatever that is)
• There is a market for AWSish public cloud
• There is a market for AWSish private cloud (Eucalyptus are still in business, aren't they?)
• There is an existing use case for AWSish private cloud in most enterprises (web, mobile, dev)
• There is a fundamental our-bottom-line-at-stake use case for AWSish private cloud in some subset of enterprises (a few hundred?) today
• There is a general lack of operational skill for AWSish private cloud
• One of the core things public cloud provides is a managed service
• There is a market for on-prem remote-managed AWS (the three letter agency thing is a public example)
• The Metacloud guys are ops guys who understand enterprise, scale, web, mobile, open source, AWSish cloud
• There just aren't a lot of hats (big or small) in this particular ring right now 

That's not to say that they're guaranteed success. Or won't get crushed by an incumbent or other party. Or even scooped up before they become too successful. Just that I would've placed that bet.

Disclosure: They're in my former coverage area. But I believe with some certainty that I'd come to the same conclusion without that background. I have no financial interest in Metacloud. I really like them. Would have a beer with that crew any day. 

provided vs exposed

If you're offering infrastructure as a service, you have to have infrastructure to offer and it has to be exposed.

But if you're offering something else, then:

The infrastructure doesn't need to be exposed, THUS you don't need to have it.

Examples:

• You offer VMs, so you need to expose VMs, a management console for VMs, and (hopefully) APIs to connect to and operate them
• You offer a runtime, so you may or may not have VMs--but who cares since what you need to expose is the runtime, a management console for that runtime, and (hopefully) APIs to connect to and operate it
• You offer an application, so you may or may not have VMs or a particular runtime--but who cares since what you need to expose is the application, a management console for that application, and (hopefully) APIs to connect to and operate it

It gets a little more complicated when someone wants to build something else on top of what you offer. Then they probably want and/or need more exposure to, and more control knobs for, the underlying stuff.

Basically, this is what makes IaaS (specifically VMaaS) different in kind from anything else. 

What you provide guides what you expose dictates how you can build.

What you've built limits what you can expose dictates what you can provide.