Clearing your mind – with a bookcase

It all started when my wife, Noa, called me over to look at “something beautiful”. As one could expect, “something beautiful” is a $1500 Crate and Barrel bookcase. Being the minimalist that I am, the price tag was completely out-there for me. $1500 for a bookcase? Excluding tax? No way.

“Too expensive. Besides, I can build this myself.”, I said. Apparently, I said that out loud.

And that’s how I found myself spending a couple of days during the weekend building two bookcases that “need to look like Crate and Barrel’s”. As it turns out, It’s not a lot of work. Besides, the good pals at The Home Depot were amazing. They really helped me figure out the steps, even though using galvanized steel pipes to build a bookcase sounded like a bit of an odd idea. This is how it ended up looking:

20150712_190128 (1)

As I was building these bookcases (instructions below) I noticed something: my mind was 100% focused on getting it right. I didn’t have time at all to think about other things – most notably the 100 different day-to-day items that are normally running through my mind. You see, ever since I started indeni all those years ago, I’ve been thinking about it 24/7. It was very difficult to shut my mind off. Even when I was on vacation for a few days here and there, my mind wouldn’t stop. I’d find myself writing notes, sending myself emails, reading emails and other vacation-forbidden activities.

But – when you’re focused on not spray-painting yourself, or putting the wrong screw in, you can’t think about anything else. Besides, if you try to touch your phone, it’ll end up covered in wood stain.

Finishing the work I came back with renewed energies to tackle the complex day-to-day issues. It’s like my mind has recharged and now has more ability as well as more tools to deal with the toughest challenges.

So – my takeaway – find more furniture to copy off of known stores. It’s a way to save money, take your mind off things and maybe, just maybe, an opportunity to create something else you can be proud of.

Now, for the instructions:

The bookcase is basically a few brown shelves placed on a black pipe-based frame. The instructions below are for one bookcase with five shelves. You’ll need:

  • Shelves. I went to The Home Depot and had them cut 12″ by 43″ pieces of light-colored wood (don’t remember its name). I used 1/2″ thick wood, but in hindsight recommend 3/4″ or maybe 1″.
  • Wood stain and other accessories – to stain the shelves in the color you want. I used American Walnut.
  • Pipes. Lots of them. I used 1/2″ pipes and I think they’d be good even if you use thicker shelves. I used galvanized pipes because I like their weight:
    • 10 pipes that are as long as the width of the shelves, in my case, 12″. These will be holding the shelves (one at each side of the shelf).
    • 16 pipes that are as long as the height you want between shelves. I wanted 18″ (between the top of a given shelf and the bottom of the shelf above it), so 18″ pipes.
    • NOTE: Buying so many pipes pre-cut is expensive at The Home Depot. You can instead by 10′ (that’s feet, not inch) pipes and have them cut the pipes for you. You’ll have some leftovers, but it’ll be way cheaper. I did that and it took them less than a day to get it done. Make sure to ask them to thread the pipes – so that you can screw them into the Tees.
    • 20 Tees. These look like T intersections, but for pipes. Make sure to buy 1/2″ tees and not those ones where each hole is of a different size.
    • 20 pipe straps. These also should be galvanized and designed for 1/2″ pipes.
    • 4 short pipe nipples (also 1/2″).
    • 4 floor flanges for 1/2″ pipes. These will be the “feet” of your book case and I call them bases further down.
  • 40 Screws – you’ll need wooden screws that are a bit shorter than the thickness of your shelves and small enough to fit through the holes in the pipe straps.
  • 4 spray paint cans. I used a black color that looks very “flat” – not glossy, shiny or anything like that. I like how it came out.
  • A pair of gloves – highly recommended to protect your hands from all this paint.
  • A pack of Grime Boss wet wipes – because the gloves don’t cover your entire body.
  • A mask to cover your mouth when you use the spray paint.

Now, for the process. I’m oversimplifying the steps here, just ask the relevant Home Depot guy or gal on how to do it (in Piping, Paint, Hardware, Tools…):

  • Take the shelves and use the wood stain on them.
  • Take the pipe bases and screw the short pipe nipples into them.
  • Take the four tees and screw them onto each pipe nipple.
  • Take two 12″ pipes and screw them into the central hole in the tees so as two connect two tees with each pipe. Now you have the base of the frame. Note that the two parts are not connected to one another and will never be in this design. So you may want to continue building each of them separately so they don’t fall on you.
  • Take the 18″ pipes and screw into the top of the tees you have screwed the 12″ (and short nipples) into. Now screw tees on top of those, and connect the two tees with 12″ pipes, etc. etc.
  • Once you screw all the pipes in you should find yourself with two separate frames that look exactly the same. One will be used on the left side of the book case, the other on the right. If you’ve done your job well, these frames should be capable of standing by themselves with nothing holding them, including yourself.
  • Now the fun begins! Use the spray paint to cover the entire frame from top to bottom and all sides. It should dry within an hour, after which you should go for a second coat.
  • I recommend using the spray paint to paint those pipe straps too, looks a lot better once you’ll connect the shelves with them.
  • Now, you need the help of one or two other people, so go get’em.
  • Have the other people hold the frames up at the distance you want them to be and put one shelf on the two frames – ideally the middle shelf. Use this setup to decide how much of the shelf you want hanging off each side and mark the center of the 12″ pipes on it.
  • Take the shelf off and use your marking to screw in the four pipe straps to the bottom of the shelf. The pipe straps should be 2″ from the long edges of the shelf. Now take out those pipe straps. What you just did was make the holes in the bottom of the shelf while it’s still on the ground instead of after putting it on the frame.
  • You’ve done this, because now you need to copy the holes to all the other shelves – same distance from all the edges. This is IMPORTANT so that your bookcase doesn’t end up all crooked.
  • Now, back to those other people helping you. You need them to hold the frames up again.
  • Place the middle shelf on the frame and screw the pipestraps into the shelf in a way that attached the shelf to the 12″ pipes. Now those pipes are holding the shelf – very cool, eh?
  • Next, the shelf above the middle shelf. Then the others.
  • You’ll notice that the bookcase is very unstable. It easily moves left and right. This is because of the way the shelves are attached to the frame and will only be solved by attaching the bookcase to the wall. For this, I bought two extra pipe straps and the required screws+anchors to get the bookcase fixed to the wall. I did the fixing just above the second shelf from the top. That way it cannot be seen.
  • You’ll also notice that to attach the lowest shelf you need to lift the entire frame in the air. I used small chairs to hold up the frame while I crawled underneath it. Of course, two people were still holding the frame so it doesn’t fall on me.
  • For the bit more perfectionists of us – you can also buy some black paint and cover the screws you’ve used to attach the pipe straps. Looks better than having those light-gray screws stick out.

That’s it! Have fun!

Turning the pyramid into a funnel: a way of helping people achieve

In sales there is a concept called “a sales funnel”. It looks like an upside-down pyramid, similar to this:

internet-marketing-sales-funnel-diagram

What this funnel represents is the journey of a person from being just a lead (someone you are interested in, or may be interested in you) to a sale (someone who bought your product). Naturally, there are more people who are leads than those that actually buy. Along the way, they “drop off” for various reasons (not really interested in your product, don’t have budget, etc.).

Funnels are measured in stages and conversion rates – that is, what are the chances of someone to go from stage A to B (let’s say 50%), and then from B to C (let’s say 30%), and so on. Also, due to the nature of mathematics, you can easily calculate the chances of them going from stage A to E, by multiplying the percentages (50% * 30%, etc.). There is a general notion that you can improve the conversion rates (chances of a person going from one stage to another) by taking a closer look at those who do convert vs those who don’t, and take corrective action. Corrective action includes trying to find more of those who do convert or changing the way you interact with potential customers. Experience shows that changing the way you interact with them is a much better way of achieving higher conversion rates.

Now, many aspects in life are represented as pyramids. For example wealth (richest at the top, poorest at the bottom), academic achievement (professors at the top, uneducated at the bottom), etc. Here is an illustration of such a pyramid in biotechnology:

i-b42d14c4e1a5391e9f87f34cd6ec6365-academic_lab

What if we were to put the pyramids upside down and treat them as a funnel? The chances of an individual to get from poor, to middle class, to upper class, to billionaire? This is a tricky example, as many people are born into a certain stage mid-way through the funnel, such as people being born in the middle class.

Can we somehow do the same analysis we do with a sales funnel? Can we figure out how to increase the chances of people moving from poor, to middle class? Similarly, from uneducated, to undergraduate, and all the way to professor?

It’s possible that how far we get down the funnel (or up the pyramid) can be modified by figuring out how to better handle people at each level. Maybe looking at the pyramid as a funnel and taking corrective action will result in better outcomes than simply giving up and attributing it all to pedigree.

Would you work for your customer?

At a small networking event tonight I ran into a guy who told me what his company did: they have a software solution that helps companies snoop on their employees. The goal of the software is to identify rogue employees, but in reality it lets you do much more than that. Kind of like the PATRIOT act, but at the corporate level.

He finished his introduction by saying “You know, I wouldn’t want to work for a company that is a customer of mine. The invasion of privacy is insane.”

That made me realize – it’s an interesting test of the legitimacy of what you’re doing. Ask yourself this: are you more likely to work for a company after they bought your product?

If the answer is no, I’d argue you’re in the wrong business.

In my case the answer is yes: I truly believe in the value our product gives not just to the company that buys it, but also to the individuals who work there. As a result, their working environment becomes a better one. Therefore, I’d be more likely to want to work there than if they had not bought indeni.

So, what’s your answer to this question?

SaaS Is Killing Old Software Companies, But It Isn’t Straightforward

The other day I listened to Scott Kupor (Andreessen Horowitz Managing Partner) and Ron Gill (NetSuite CFO) discuss what SaaS is doing to software sales. Ron Gill equated the change happening now in software to the shift from mainframe to client-server architectures. Specifically, Ron pointed out that the challenge is not just a software-architecture one, but also a business model one.

You see, companies founded before Salesforce.com (and even some founded later), basically sold perpetual licenses for their software. Their thinking was simple: the software hardly changes AND it really helps with revenue recognition (the entire amount is recognized instantly). If the software did change, they’d charge for upgrades, and of course, support.

Salesforce.com changed that – they charged monthly or annual fees for a software that changed at a similar rate as the original, perpetual license software, did. The difference was not in the software architecture, but rather the fact that someone else was running the software for you. That means they took ownership of the servers, the network bandwidth, the on-going operations – which tend to be more OPEX (operational expenditure) oriented. Hence, it made sense to pay them monthly to run the software.

Making the move from perpetual licensing (CAPEX) to subscriptions (OPEX) is very hard, to almost impossible, for software vendors to complete. That is what Ron Gill was pointing out. Think about it – these huge ships needing to completely change how things work while still hitting their numbers. Take SolarWinds (NYSE: SWI) for example. They are a large (though not huge) software vendor operating in our space, where a sales force comprised of hundreds of people is used to selling perpetual licenses.

  1. How do you convert a sales person who is used to selling one thing to another?
  2. How do you do this conversion while still growing at XX% year over year in revenues? (remember, perpetual license revenues are recognized instantly whereas subscription ones are recognized linearly over time)
  3. How do you explain to your customers that your software, largely unchanged, makes sense to buy under the subscription model if your customer is still required to run it on premise and it changes at the same (slow) rate as the perpetual licensed software did?

That last question uncovers a greater complexity – you can’t just take the same software and sell it in a different model. You need to change how your software is delivered and what the value is. Specifically, you’d want the value to increase from month to month, to justify the on-going subscription payments. This is what I call SaaS 2.0 but that’s a topic for a separate post.

So – is Ron Gill right? Are all the big software vendors going to die because they can’t change the way they work? Is SaaS going to shut down hundreds of software companies while propelling others to success?

To me it looks like it will.

Startup Founders + Adrenaline

Most startup founders I know, myself included, are some sort of tech geeks. They love gadgets, technology, software and can’t stop thinking about how technology can change the world.

When you think “Tech Geek”, I’m sure the word “Adrenaline” isn’t the first one that comes to mind. Probably not the second, or third either. However, Memorial Day has brought me to the conclusion that tech geeks can be addicted to adrenaline. Actually, if they are founders of startups, they are most probably actually addicted to it.

This three-day weekend is too long for me. I want to be back in the action – interact with people, sell, hire, tackle tough product challenges, make another step forward towards world domination. But, there’s nobody to interact with! Customers are on vacation. Partners are on vacation. Our US office is closed and the Israeli office can only deal with so much of my jabber.

So instead, my mind is racing, planning, thinking of what else we want to achieve over the next few months. That, in turn, is resulting in more adrenaline. I have a full tank of gas and nowhere to go with it. It’s frustrating on the one hand, but I wouldn’t want to see myself in a job or project that does not result in this feeling.

I hate holidays.

Choose Your Rockets Carefully

Just over a week ago I shared my thoughts on how to grow more aggressively by latching onto rockets. I didn’t discuss the risk of the rocket knocking you off mid-ascent.

Apparently, this just happened to DataSift: Twitter announced on Friday that it’s cutting DataSift off. I’m not very familiar with the economics and relationships within the social/data/adtech world but from the few articles I read over the weekend it’s clear DataSift was counting on Twitter to be one of its rockets.

Today, Mark Suster posted a piece about a company’s ability to build its business on someone else’s platform. In it, he shares details about DataSift’s strategy and Twitter’s behavior in the partnership. Keeping in mind that this is just one side of the story, there are a few facts that are probably undisputed:

  • DataSift was making money off data that Twitter was generating.
  • Twitter was OK with this, as the partnership was not just official but also deep.
  • Twitter realized at some point during the past two years that it wants to exert more control over its data and how it’s served in aggregate to customers.

The last point stems from the fact that Twitter sees this data and its aggregation/analysis as a vital pillar of their business going forward.

So, this adds a caveat to my post from ten days ago: when latching onto a rocket, put considerable thought into the potential of that rocket seeing what you do as vital to their business. If they don’t see it as vital, they will probably not mind you making profit off their business. If they do, then you’ll either get acquired or they’ll run you over.

My partner Zak says: some relationships are like oral-sex between cannibals.

Hope things turn out better with Facebook, DataSift.

Those Moments You Realize You’ve Hired The Best

Once in a while I see someone from our team do something incredible. Whether it’s build a very solid element of the product, fix an insane bug, close a deal I was certain was lost or get an SVP of an incredible company highly interested in what we do. It can be many other things, too. These moments though bring a little tear to the edge of my eye.

For me, I suddenly realize that we’ve made the right choice with hiring that specific someone. He or she is driven and motivated to achieve the vision. They live our story in their bones and are looking to share it in the world. A story that started in a smelly little apartment in Tel Aviv just a few years ago.

I’m not entirely sure how we’ve achieved this and how to consistently achieve it. Some people say it has to do with culture (and write a 27-slide presentation on it). In my opinion it’s a matter of hiring amazing individuals into roles that you know they’ll love in a company that is really making a dent on the universe. Then trust them to be amazing.

Then again, who am I to know? We’re not even 100 people at indeni. Yet.

P.S.
Even the ice-man (a story for another post) is allowed to be emotional at times. 🙂

Latch Yourself Onto A Rocket

Disclaimer: much of this post’s contents is based on advice provided by other, far more experienced, individuals. I am sharing my understanding of that advice and what we do at indeni to implement it.

Much has been said about a startup needing a great market and a product that fits it:

There are of course more posts, but these three will give you three different perspectives on the matter, and that’s plenty to start with.

One of the questions you always need to deal with is not just targeting a great market but figuring out a way to accelerate into it, or with it.

Into it means finding a way to very quickly grow in a market that might be growing slowly. Usually it means you have an offering that is several times better than the incumbents’ and you can displace them.

With it means a market that is rapidly growing and that if your product is on the short list of many customers you are bound to grow aggressively.

So you should always ask yourself – how do I achieve one of the two, or both? How do you navigate your company, your team, your offering, to ensure you can grow rapidly?

One thing we’ve found to work well at indeni is to latch yourself onto rockets.

Our solution is a must-have for anyone deploying network and security equipment and cares for their uptime. We know this because customers tell us this. So our growth is dictated by our ability to reach existing users of networking and security equipment as well as making sure that as they grow they choose indeni to grow with them.

So, if we identify high-growth networking and security players (all relative to size) and work together with them we can use that to propel our business. Ergo, latching ourselves onto rockets.

Spending time at Palo Alto Networks’ Ignite conference this week showed me that PANW is clearly a rocket worth latching onto. There are other players in the market that are rockets as well – Check Point, once a bit more sleepy, is growing aggressively and F5 are expanding into new markets at a dizzying pace. Those are our three rockets today.

What are your rockets?

Sponsoring Conferences: Useful Or Waste Of Time?

The subject of sponsoring a conference results in heated debates among founders of technology startups:

  • Are conferences a waste of time and money, or useful?
  • Should the CEO go to the conferences or not?
  • How many people should you send?
  • How much money should you invest?

I’m writing this post on a break at Palo Alto Networks’ Ignite 2015. The PANW team has done an amazing job at setting up a beautiful conference, full of interesting content. We’ve spent roughly $20,000 on this conference (including flights and giveaways). Is it worth it? Moreover, is it worth me personally spending time here?

To answer those questions, you need to identify what value you believe going to the conference will give you. In our case:

  • Exposure – we want customers, resellers and even PANW employees know who we are and what we do. Time and time again we’ve been contacted by people who heard about us from someone else and eventually became customers. However, it’s very difficult to measure the usefulness of this (which I find problematic – I’m a data nerd).
  • Leads – while this is the first time we sponsor Ignite, we have sponsored other network/security manufacturer conferences in the past. Time and time again, we’ve seen an immediate ROI in the form of leads that turned into customers. A big portion of our sales is driven by people that we’ve met at a manufacturer conference.
  • Understanding Pain – customers are our lifeblood. As such, we need to make sure we understand their pain and how it evolves over time. For me, this is the number one reason I came to Ignite this week. I know many CEO’s think this is best left to the product/R&D guys, but I disagree. A CEO needs to understand their customer.

So $20,000 spent on Palo Alto Networks’ Ignite, or Check Point Experience, or F5 Agility – is always worth it for us.

However, we’ve spent similar amounts on Cisco Live! and a few infosec conferences. Those weren’t useful for us:

  • At Cisco Live! it’s almost impossible to get above the noise without a very big marketing budget. Especially when companies like Statseeker give away a car at each event. When the spend gets too big, it’s difficult to prove ROI.
  • At the infosec conferences most visitors are interested in tools that will help their security and not in those that will help their operations. So while some of our customers are network security operations teams, they usually don’t frequent the infosec conferences.

Now, it’s all down to trial and error. I have a good friend, a CEO of another company, that invested several $100k in Gartner conferences over the past couple of years and can point to real ROI. He could only find this out after investing quite a bit of money.

Investing money into something that doesn’t pan out is one of the things a startup hates doing the most, it’s not like it grows on trees. However, you gotta spend money to make money, right?

Happy conference season!

P.S.
You should really watch this, it’s beautiful.

VAR+SaaS: The Unobvious Fit

Recently Tomasz Tunguz made a point regarding VARs in his post on the 5 marketing channels of SaaS: simple SaaS solutions generally don’t need VARs to sell. You can see that by looking at solutions like Expensify, RingDNA, Zendesk, Mailchimp and others (all of these are services that we use at indeni). Generally, it makes sense – VARs are “Value Added Resellers”, which means they add value to what they resell. In most SaaS solutions, VARs can add little to no value – the setup is easy and the customization required can be done by the end user with little help.

Even in more complex solutions, like ServiceNow, VARs aren’t utilized (in the US, their primary market). In their case, they opted to provide professional services, mostly at a loss (see their S-1), over utilizing VARs. It gives them control over the customer experience, which is extremely important. Generally, SaaS, gives you so much control and insight into customer experience, why would you want to give it away?

I argue that you can partner with VARs while at the same time retaining control of the majority, albeit not all, of the experience. Specifically, you can achieve this even with a SaaS solution that is extremely easy to deploy and requires no customization. That’s what we’re doing at indeni – we partner with leading networking and security VARs and go to customers together. It’s so important to us that we’ve set it as the cornerstone of our long term strategy as a means of fueling our aggressive growth. Our VP of Sales, Darcey Harrison (previously a director of inside sales at Meraki), is spearheading this approach.

Why?

Well, what we’ve discovered, is that while indeni is a SaaS solution, it ties into non-SaaS physical and virtual equipment. To recap from previous posts: indeni is used by the world’s leading enterprises to identify configuration issues in switches, routers, firewalls and load balancers before they result in downtime. That’s because over 70% of critical network issues could be avoided by simply making configuration tweaks at the right time.

So this means that our software integrates with devices made by Check Point, Cisco, F5, Fortinet, Juniper, Palo Alto Networks and soon others. So, from the point of view of the customer, indeni is a tool that is tightly integrated with their network infrastructure. As such, they not only expect to purchase it via the same channel as they purchase their equipment (VARs) but also expect their channel to recommend indeni to them. This means that a major source of customers for indeni actually comes from VARs reaching out to their own customers and saying “Remember issue X that happened a few months back and you got a ton of flack for it? indeni would have ensured you avoided that from even happening. We can help you set up a POC in less than an hour.”.

Magic, eh?

Now, going back to Tom’s point – SaaS and VARs are a very rare combination to see. That means that there isn’t much experience in the market for getting this done right, especially with a solution that’s so easy to deploy. It means that a lot of times we invent our own metrics and strategies to get this done right. It also limits our sales talent pool: how many sales people have experience in both selling SaaS solutions and working with VARs?

Also look at it from the point of view of the VARs – how much experience do networking and security VARs really have with SaaS? Most don’t have any experience at all.

The message I’m trying to get across here, is that while the vast majority of companies take a certain approach, it doesn’t necessarily mean it’s a fit for YOUR business model. Don’t be afraid to invent something new. Just make sure you get it right.