I had the opportunity to co-moderate the final panel of Office 2.0 alongside friend and fellow Irregular Niel Robertson. We set out to accomplish several goals:
- Entertain the audience despite it being the final presentation of the conference
- Provide a differentiated format
- Ask personalized, unique questions so as to leave the VCs feeling as though it was a worthwhile experience
- Leave the entrepreneurs in the audience with a true sense of the challenges and opportunities in front of them
- Represent ourselves, our companies, the Irregulars and Ismael well
If the feedback we received after the event was any indication, either we pulled off our agenda or we have far too many friends willing to pull the wool over our eyes.
The panel consisted of:
- Eve Phillips (Greylock Partners)
- M.R. Rangaswami (Sandhill Group)
- Peter Rip (Leapfrog Ventures)
- Gordon Ritter (Emergence Capital)
- Gus Tai (Trinity Ventures)
- Ray Wu (HP Ventures)
Some of the lessons learned...[note: I am paraphrasing from memory, having been up on stage it was hard to take notes :), so if anyone has direct quotes or audio of the session, by all means ping me and I'll clarify]
...On the state of the VC market: Having seen Sevin Rosen cancel its 10th fund citing a broken industry in the same week that YouTube was acquired for $1.65 billion, we asked the panel where they sat on the spectrum of the current state of VC? For the most part, the panel unsurprisingly suggested that the industry wasn't broken although they acknowledged some problem areas including overfunding. MR Rangaswami of Sandhill Group, who is an angel investor but not a traditional VC, offered the contrasting view that the VC industry is in fact troubled and wrought with too much capital chasing too few deals.
...On Office 2.0 startups and unclear business models: Peter Rip, the only panelist to back a presenting company at the conference (Teqlo), acknowledged that many of the Office 2.0 companies are addressing talking about "how not what." But he also expressed confidence that what we're seeing this year will be far less compelling than what today's efforts turn into over the next few years.
...On the definition of SaaS: Gordon Ritter, one of the original investors in Salesforce.com, is co-managing Emergence Capital, a fund focused on On Demand/SaaS software plays. Gordon suggested that the driving force behind his investment thesis is "how quickly customers can get immediate business value out of a service" and far less about the three functional differentiators most commonly associated with SfDC and other SaaS plays (i.e., multi-tenancy, hosted, and subscription-based pricing).
...On whether traditional enterprise software models can get funded: Eve Phillips weighed in on the concept of traditional, on premise enterprise software from her perspective at Greylock, a firm with a storied history of software investment. Her perspective was that traditional software can, and will continue to get funding, particularly in areas like security where it makes sense to have on premise solutions.
...On what CIOs think of the "next big things": MR Rangaswami detailed the sobering message we all heard at his Enterprise 2006 conference earlier in the week. He noted that the CIOs he speaks with want innovation to come in the form of helping solve critical business problems versus "cool new spreadsheets." While areas like SaaS, open source, social software and SOA are important and of long-term significance potentially, there is still a lot of work to do in terms of getting large enterprise CIOs to buy into the message.
...On whether enterprises are more willing to "innovate" through established vendors, and how startups might partner with big vendors as a channel: Ray Wu offered his views on what entrepreneurs must do to garner the attention of big firms like HP and SAP, and also noted that it is probably an easier road to get things like blogs and wikis adopted in large enterprises if incumbent vendors were to bring them into the fold.
...On how to navigate in a crowded category: Gus Tai discussed his experiences investing in competitive emergent markets and what characteristics he looks for to avoid the label of "me too" investments. Specifically, Gus addressed his investments in Photobucket and Jobster, which on the surface appear to have significant competition from other well-funded startups.
On a personal note, I wanted to thank all of the panel participants for being gracious with their time and perspectives. As to filling in the whitespace from the panel, I'm sure Niel will have more flesh to add to these bones, and a special thanks to Dan Farber for providing some quotes and his own analysis of the panel.
Note: At the time of this writing I, and/or funds I maintain discretionary control over, maintained long equity positions in CRM and SAP, but did not maintain positions (long or short) in GOOG or HPQ. We also may, at times, carry derivative options on underlying positions as a hedge.
office2.0 vc enterprise irregulars software niel robertson gordon ritter peter rip ray wu gus tai eve phillips mr rangaswami venture capital woodrow
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