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Today, we got the chance to sit down with Aprimo, an on-demand marketing automation company that has built their software business around scaling their own cloud infrastructure with VMware vCenter . Aprimo has optimized its offerings to scale with customer growth and leverage best-in-class hardware to match innovation in the software layers it develops. In this discussion, we found less need for discussing private vs. public cloud. Instead, we found more focus on performance and speed-to-market as key drivers for moving a virtualization strategy into personal cloud infrastructure reality. Sponsor The story of Aprimo starts with virtualization - and has led to the company defining the boundaries of its cloud offering and product architecture around the benefits of scaling resources on demand. Aprimo uses a Microsoft .Net three-tier architecture with MSSQL in the back-end. All of the three tiers (front-end, business logic, database) run in virtual containers that are monitored with vCenter. Performance is the question that Aprimo studied when bringing vendors on board. The company has relationships with 3Com, Cisco, and HP for the three key parts of the technology stack. vCenter joins these offerings together and offers the company quick response to new customer requests. Like many business, marketing can come in waves and this architecture is designed to scale around the unknown and to be agile enough to support the marketing calendar. Here is a diagram showing the core services VMware vCenter is focused on: We had the chance to explore the customer experience of build-your-own-cloud with John Gilmartin, Director of Product Marketing at VMware. We asked him if VMware sells clouds, or if instead its tool build clouds. What we found is that it is a bit of both. Like a data center itself, or a complex application, building your own cloud can be a multi-faceted event. Customers are using vCenter as a building block to manage the resources and enabling automation around business processes. By thinking of automation as the line in the sand between virtualization and cloud, we can easily see how connecting business processes focuses on the best place in harnessing on-demand resources for business benefit. Some of the areas of focus we the Aprimo team took on as the company to optimize its virtual resources into its cloud. Design and optimization of resource pools Database tier optimization and support new dynamic customer scaling Designing for performance with vendor evaluations Leveraging best practices from VMware on tuning and finding bottlenecks Processes for spinning up new users automatically across all resources Out of these focus areas, we found database scaling the most interesting to consider. It seems clear that as build-your-own-clouds grow, database performance, concurrency, and process integration are ripe for further optimization. What we learned from Aprimo and VMware vCenter is that launching a cloud infrastructure is a combination of virtualizing computing resources and designing the automation of the right business and technical processes. Reaching the stage of an effective cloud depends on how the team thinks about connecting software, sales, and infrastructure together as a process. Making a commitment to your own cloud can bring a company together - from sales manager to developer. This join can position an organization to win customers and grow the business due to an increase in the end to end agility of the organization. Is your business ready to cook up a cloud recipe of your own? Discuss
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One Approach to Growth: Build Your Own Cloud with vCenter in the Middle
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The debate about private clouds continue as the traditional heavyweight enterprise software providers make their big and glossy pitches for their vision of a private cloud. So, it may come from Google, but still, it is refreshing to hear the intellectual tone that a scholar like Vint Cerf provides. Cerf is Google's chief technology evangelist but his reflections give a sound bearing on how private and public clouds do interact. Sponsor He spoke last week at the Google Atmosphere Conference. We came across one of the discussions he had with fellow Google innovators. He repeats what we hear him say a lot. It comes down to interoperability. Private clouds are tools. Google develops tools that are distributed on the Internet. The question is how do clouds interact? It's a contrast to what we see with Microsoft or Oracle in its quest to sell cloud computing environments into the enterprise. In the meantime Amazon continues its own quest to dispel private cloud computing as a myth, not a reality. In an interview with eWeek , Adam Selipsky, vice president of AWS outlined their views: "....Moreover, Selipsky said what people are calling private clouds come with the following drawbacks, where the customer will: · Still own the capex...and they're very expensive (big fixed investments) · Not pay for what you use · Not have true elasticity...when groups relinquish their servers, the company still owns the datacenter space and servers...and will also find that managing this supply chain will present a dilemma...will either have to significantly overprovision which is wasteful or become really expert at managing just-in-time supply-chain so there are no long waits for servers...managing a supply chain like this is really hard and takes a lot of effort and refining and keeping the status quo of long time to market is not so appealing either · Still own the headache of managing the undifferentiated heavy lifting" And so, the debate continues. Discuss
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Google's Vint Cerf on Private Clouds v. Public Clouds
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It was announced Tuesday that email management startup SendGrid had raised $5 million in Series A financing from a handful of prominent investors, including Foundry Group , Highway 12 Ventures , Dave McClure , David Cohen and WordPress founder Matt Mullenweg . SendGrid, a graduate of last year's summer TechStars program, launched last fall and raised some seed funding from many of the same investors on its way to sending nearly 1.2 billion emails for its over 4,000 clients. Sponsor SendGrid is a cloud-based service that helps companies, big and small, manage automatic transactional emails sent to its users while also providing analytics and delivery assurance. A demo plan gives companies 200 free emails per month, and after that monthly prices range from $10 for 10,000 emails, to $800 for 500,000 emails, along with a few other premium features. More interestingly, the company managed a solid Series A round after strong customer development and acquisition without the blitz of marketing tactics we see from a lot of young startups. Sure it's important to spread the word about your product, but in other cases, letting your product speak for itself through customer referrals can play a large part of product growth. Ryan McIntyre of Foundry Group mentored Isaac Saldana, SendGrid's co-founder and CEO, during the TechStars program last summer and spearheaded Foundry Group's efforts to lead the investment round. Tuesday morning, McIntyre offered a look into the SendGrid investment , which he says fits with Foundry Group's theme of protocol investments. "As we observed SendGrid's rapid customer growth, which has occurred through word of mouth and without formal sales or marketing efforts, we made an offer to invest in SendGrid, and, thankfully, they accepted our offer to lead this round," writes McIntyre. Being a graduate of TechStars has been an obvious benefit to SendGrid. Dave McClure and David Cohen have participated in both the seed and Series A rounds of financing, and some of the programs other graduates ( SnapABug and Next Big Sound ) are users of the service. Other more prominent companies have started using the service as well, including Plancast , HootSuite , Get Satisfaction , SlideShare and Foursquare , all helping to spread the word about the service. Not only is SendGrid providing an excellent service that many startups could take advantage of, but they also serve as an example to other early-stage companies out there looking for funding. First, they are a shining example of the opportunities that come from participating in startup incubators like TechStars, as some of their investors and customers have come from the program. And secondly, SendGrid's focus on steady customer acquisition and development, instead of on viral marketing, is a valuable lesson. Last Friday we mentioned a book called The Referral Engine which helps companies focus their business strategies to drive customer referrals, and it seems SendGrid has done this well, growing their customer base without traditional marketing blasts. Discuss
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TechStars Grad SendGrid Collects $5M Series A Financing Round
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Yesterday I spoke with lean startup guru Eric Ries who is hosting the Startup Lessons Learned conference this Friday in San Francisco and at live simulcasts around the world. Ries says he considers entrepreneur turned educator turned public servant Steve Blank to be his mentor in the startup world, and Blank will be among Ries' lineup of speakers at this week's conference. Blank will give a talk he's titling, "Why Accountants Don't Run Startups," (or Customer Development 2.0 on the conference site ) which details the major differences between startups and large companies - a speech whose slides Blank posted to his blog via SlideShare late last week. Sponsor According to Blank, the line he draws between smaller startups and larger companies is based around the business model. Startups, he says, exist in the state where they are searching for a business model, and large companies are the result of finding and executing that business model. The reason he calls out accountants in the title of his talk is that as startups transition into larger companies, their less conventional methodologies become more traditional, and that's when accountants are needed. Early on, startups, in his opinion, should rely on such metrics as customer acquisition cost, viral coefficient, customer lifetime value, and monthly burn rate. These types of measurements become de-emphasized in larger companies which focus on balance sheets, cash flow statements and income statements, Blank says. Parallel ways in which startups transition into larger companies include customer development giving way to product management, and agile development becoming engineering. Early-stage companies, searching for a business model and for customer traction, will test hypotheses, discover their minimum feature sets, and pivot their focus if things don't work out, he says. Product management takes over once a viable model is found. One of the major stepping stones toward becoming a successful larger company, Blank says, is discovering the winning model or process and focusing on making it work over and over. Entrepreneurs begin their startups with a hatred for processes, but learn to love and implement processes as the company grows into a profitable business. Passionate focus transitions to focus on the company's mission, and ultimately to the execution of that mission. Blank wraps up his presentation by drawing the same lines between two types of education, business school and entrepreneurship school. Business school, he says, is far better suited for teaching students to run larger companies, while startups need founders with better entrepreneurial training. These ideas merely scratch the surface at what Blank is likely to dive into during his 45 minutes presentation Friday afternoon, so be sure to check out the event if you're in San Francisco, or find a live simulcast to attend in your area. Photo by Flickr user dux_carvajal . Discuss
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Steve Blank On How Startups Evolve Into Large Companies
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At this morning's roundtable I worked with five new entrepreneurs who came to the roundtable very well-prepared. They had already done a good deal of validation of their businesses and this led to a richer discussion about each business. An unusual piece of trivia: four were women and two were named Joanne. It is clear from the amount of work they have all already done so far that each has the essential work ethic needed to be a successful entrepreneur. Sponsor Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She started holding free Online Strategy Roundtables for entrepreneurs in the fall of 2008. She has founded three companies and writes a business blog, Sramana Mitra on Strategy . She has a masters degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Her three books, Entrepreneur Journeys , Bootstrapping, Weapon Of Mass Reconstruction , and Positioning: How To Test, Validate, and Bring Your Idea To Market are all available from Amazon. Her new book Vision India 2020 was recently released. Mitra is also a columnist for Forbes and runs the 1M/1M initiative. First, Mithun Ekbote introduced his company, PalmShell . He has the exclusive license for five years to sell a low-cost and more-efficient building material in India. While we discussed connecting with his potential buyers - the builders of low cost housing - he explained that he has learned that these builders in India often make more money if jobs go on longer than expected, as the property values continue to grow over time and they are able to raise their prices. They are not always interested in the more efficient option. In this case, I think Mithune may need to do some more validation to better identify his customer segment. Meanwhile, this is a good time for Mithun to explore partnering with an NGO that is aligned with his goal of building better low cost housing in India. The Ramakrishna Mission is such an organization and I will introduce him to the appropriate people there and see if we can move this effort forward. RKM is the largest NGO in India and I have good contacts there. Joanne Lang presented AboutOne , an online service that organizes your personal and household information. As a working mother of four boys, Joanne personally felt the pain of keeping everything organized. She initially targeted her service towards working moms, but through her validation process found that the target segments include military wives who move a lot, expats, and anyone caring for someone with a special need. After discussing her potential revenue streams, she said she feels she needs to raise funds in order to hire more employees to help develop the product. Not at all true! In fact, she can hire very good developers from India and Eastern Europe as contractors to help her continue to build at a sixth of the rates she is currently paying. I pointed her to Elance , Guru.com and odesk and we discussed the importance of checking the references of potential contract workers. This will save her money, help her finish building her product and build up her revenue stream. For all bootstrappers, using freelance developers is a key cost-saving mechanism. Joanne Griffith pitched Jane Hannah Media , a multimedia production company specializing in social media management and online profile building strategies for businesses and creative individuals. She would like to grow her business and has been successful working with small businesses, but their budgets are usually limited. As someone who has a variety of experiences working for companies like the BBC and NPR, she really needs to differentiate herself from the many competitors offering similar services. We discussed how she has started copyediting blogs, but I pointed out that this is a service that can been done very cheaply by people overseas and is a complete commodity. This will not help her differentiate her business. I also pointed her to Elance , Guru.com and odesk as sites to join and help her explore who her competitors are and where the opportunities lie. These sites, in her case, would be good channels for customer acquisition. And perhaps focusing on podcast or video is her way to move forward with something differentiated. Again, for all services companies, these channels are excellent means of accessing customers, building reputation and references. JT O'Donnell pitched her business, Careerealism as being like a career HMO. She has brought together a site that offers expert career coaching at a reasonable price. I like this project - JT has thought everything through quite well. Her question was should she focus on one vertical, and I think, considering the current job situation, that focusing on college students and recent graduates will work quite well. I suggested that she recruits unpaid interns from campuses to help spread the word about her service, and she loved this idea. She has been successful using interns in the past and repaying them with free coaching. This business is imminently bootstrappable - don't waste your time looking to get financed JT. Up last was Anita Lamb of Altitude Fasique , a clothing line offering trendy attire for tall working women. Anita has found what seems to be a great opportunity and has done her research. The TAM is quite large. But I believe that the designs as she describes them, fitted and tailored, do not lend themselves well to being sold online. My recommendation is that she changes her designs to focus more on the basics for this segment. I think she should set up a private label store online. My Web 3.0 framework offers a good formula for building your own brand online and layering in all the components. This business could fill a very nice niche and has the potential to grow into a very large business. These roundtables are the cornerstone programming of a global initiative that I have started called One Million by One Million ( 1M/1M ). Its mission is to help a million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. In 1M/1M, I teach the EJ Methodology which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures. You can find the recording of this roundtable session here . Recordings of previous roundtables are all available here . You can register for the next roundtable here . Photo by Justyna Furmanczyk . Discuss
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Startup Strategy Roundtable: Beyond Validating Your Ideas
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