Tuesday, December 28, 2010
Predictions and Prognostications
Tuesday, October 5, 2010
Strategic Decisions Without Borders (4)

Compass360 Consulting believes that knowing the rules are ok. Knowing the state of predictability within the "Big Tangible Picture" is the key to knowing when a specific rule is valid
FIBER networks cross the world. Data bits move at light speed. The globe has been flattened, and national boundaries obliterated. Yet in Silicon Valley, the one place that is responsible more than any other for creating the network technology that supposedly renders geography irrelevant, physical distance is very much on the minds of the investors who provide venture capital.
Mr. Johnson explained that close proximity permits the investor to provide in-person guidance; initially, that may entail many meetings each week before investor and entrepreneur come to know each other well enough to rely mostly on the phone for updates. Those initial interactions are fateful. "Starting a company is like launching a rocket," Mr. Johnson said. "If you're a tenth of a degree off at launch, you may be 1,000 miles off downrange."
Capital and attention are lavished on entrepreneurs in the Valley as in no other place. Ten years ago, when Dow Jones VentureOne began a quarterly survey of where venture investments landed, one-third of all deals in the country went to the San Francisco Bay Area. Since then, the same share of deals has gone to the same place, almost without variation. Most recently, in the first six months of this year, Silicon Valley still pulled in 32 percent; the region with the second-largest total, New England, was far behind, at 10 percent.
The latest wave of innovation, embodied in Web 2.0 companies, is centered in Silicon Valley. Joshua Grove, a research analyst at VentureOne, said that 43 percent of Web 2.0 deals this year were in the Bay Area, the formal category for the Valley. These included three of the four largest financings: the $25 million that went to Facebook, $14.5 million to Zimbra and $12 million to Six Apart.
How well is the Valley doing in incubating this newest crop of start-ups? Ask the investors at YouTube, who are celebrating Google's $1.65 billion deal for a company that was all of 19 months old. Or look at Google's own record of growth: building a market capitalization of $141 billion in only eight years.
YouTube and Google share the same source of venture financing: Sequoia Capital, situated among the venture capital firms clustered in a handful of blocks in office parks along Sand Hill Road in Menlo Park, near the Stanford campus. Google's other source of venture capital, Kleiner Perkins Caufield & Byers, is nearby, too.
Why so many of these firms, which form the world's most concentrated source of capital for new ventures, originally collected in that particular spot, rather than, say, outside the Massachusetts Institute of Technology or the California Institute of Technology, is not important; what is important is that this is where they happen to be today.
Sequoia makes its preference for the 20-minute rule almost explicit, telling applicants whose companies are at the "seed stage" (receiving less than $1 million) or "early stage" ($1 million to $10 million) that "it is helpful if the company is close to our offices" because they "require very frequent contact."
Kleiner Perkins has only one office, the one in Menlo Park. Sequoia has reached out to entrepreneurs more considerately, providing five offices. But only one of the five, the one in Menlo Park, is in the United States. The others are in China (two), India and Israel.
If you have a brilliant idea for the New New Thing and want Sequoia to provide its funds and blessing — using the same golden touch provided not long ago to Google's founders — you would be much better off in Beijing, where Sequoia has an office, than in Boston, where it does not.
It's convenient for venture capitalists to have entrepreneurs close by, but the reverse is true, too, said Allen Morgan, a managing director of the Mayfield Fund, which manages $2.3 billion in venture capital and is also on Sand Hill Road. Mr. Morgan made the case by pointing out that a prospective entrepreneur would, on average, need to have three to eight meetings with a venture fund before he or she was successful, but would have to go through a similar process with 5 to 10 firms before finding the one that approved the funding request.
Even if the process goes smoothly and requires only 15 meetings — the fewest possible, given the lowest range of possibilities — and even if most of those meetings are set up in advance, the time consumed in getting to Sand Hill Road, even using local highways, can be significant. The problem is that much worse when, as often happens, a meeting is called with just an hour or two of notice. "If you live in Santa Clara, it's doable," Mr. Morgan said. "If you live in Dubuque, it's not."
Entrepreneurs who live in Silicon Valley also find the technical talent they need faster than they can in any other place; they pay more for that talent, but speed is the sine qua non for success. Seth J. Sternberg, the chief executive of Meebo, an instant-messaging company in Palo Alto that is backed by Sequoia, described Silicon Valley with the fervent appreciation of a recent transplant from New York, where he had suffered three separate bad experiences with start-ups, none of which had attracted venture funding.
The ecosystem in Silicon Valley, Mr. Sternberg said, includes "incredible techies, who live here because this is the epicenter, where they can find the most interesting projects to work on." The ecosystem also includes real estate agents, accountants, head hunters and lawyers who understand an entrepreneur's situation — that is, emptied bank accounts and maxed-out credit cards.
"In New York, it would be extremely difficult to find a law firm willing to defer the first $20,000 of your legal fees," Mr. Sternberg said. "Here, we got that. It's a pretty standard thing in Silicon Valley."
On the East Coast, a business plan contest at the Harvard Business School in 2004 prompted one M.B.A. graduate, Arijit Sengupta, to found BeyondCore, a software company, in his apartment in Boston. Mr. Sengupta, who earlier had earned a bachelor's degree in computer science and economics at Stanford, was determined to develop a finished product and to acquire customers by the oldest method of all: bootstrapping, or starting a business without outside capital.
He did end up needing Silicon Valley for something else: technical talent that would be willing to accept equity in place of any salary. Six weeks ago, he moved to Silicon Valley to recruit more people like his chief technical officer, who has been working full time since Jan. 1 for equity only.
"Elsewhere, if people in a large organization think you have potential, they offer you a job, trying to save you from the uncertainties of a start-up," said Mr. Sengupta, who himself has worked at Oracle, Microsoft and General Motors. "In Silicon Valley, they say, 'Can I join you?' "
Mr. Sengupta now has six "employees" working for BeyondCore without salaries. Only in Silicon Valley, he said, do "people have confidence that if you act on great ideas, the money will come."
- Rule of Global Capitalism: People only follow successful endeavors. They usually support "perceived" winners.
Predictions of the Valley's demise have become a perennial, said Mr. Morgan, the Mayfield venture capitalist. "Every five years, Time or Newsweek runs a story: 'Silicon Valley is Dead,' " he said. "But Silicon Valley is bigger and more vibrant and better at creating companies than it has ever been."
Silicon Valley is not "bigger" in a literal sense. In fact, it remains geographically contained by the Santa Cruz Mountains on one side and San Francisco Bay on the other. The physical features of the place help explain the Valley's vitality.
MR. JOHNSON, the venture capitalist in Palo Alto, noted that the greater Los Angeles area also has a pool of talented engineers (working at aerospace companies like Lockheed, Northrop and Hughes) and great universities (notably Caltech and U.C.L.A.) and plenty of money to invest. "But in Los Angeles," he said, "people are scattered across a wide area; everything is more spread out."
It's harder for entrepreneurs to meet with one another and with investors, he added. And that means connections take longer, deals move slowly, fewer companies are formed. "Like a gas, entrepreneurship is hotter when compressed." he said.
Why, one might ask, must relationships be built only by physical presence? Why, if the phone does not serve well, cannot the newest generation of videoconferencing gear — which provides stunning video to accompany sound — save the various participants from the vexations of getting together in person?
Mr. Morgan of Mayfield scoffed at the suggestion of virtual meetings as a feasible medium of establishing trust in business. He said that if the matter were important — and human beings were involved — he believed that there would never, ever be a replacement for face-to-face meetings.
- Compass Rule: Regardless of the distance, trust is the first step toward any relevant cooperation.
Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: digitaldomain@nytimes.com.
Thursday, September 23, 2010
Pragmatic Practices (5): Understanding the Importance of Time

Sunday, September 12, 2010
Strategic Decisions Without Borders (3)

different remotes. How do you get them to made decisions as a team?
efficiently well at remote locales?

Do you have a process that can get people to
operate effectively as a team?
Since 2006, everyone are still focused on the matters of different locations, time zones, and culture. They do not know how to build a big picture as a team. They do not have a process to make decisions. Nothing has changed. Technology evolves. Jobs are continually being outsourced. Salary and bonuses for the worker-bees declines. Attention span decreases.
This process also allows them to make decisions regardless of the distance, the technology and the project culture.
In future posts, we will explain the beneficial values of Compass AE.
Saturday, August 28, 2010
The Art of Strategic Power

- Are my settings are predictable or unpredictable?
- Who is ahead and who is behind?
- Should I advance or retreat?
Monday, August 23, 2010
The Sign of the Times: The Robots Trend is Here

- A faster and efficient service that provides low operational costs and a fast delivery cycle while ensuring quality
- The option of charging a nominal fee for those who require the "human touch" service.
- Customers who prefer the "human touch" .
- Customers who can't afford the "human touch" services might take their business to somewhere else. The question is whether the number of consumer options for that specific group of clientele are limited to a few companies?
- The possibility of more unemployed people.
- The trend of robotic customer service will be utilized all over the globe and will be quite efficient on the long run.
- With good artificial intelligence constructs, we expected the robotic technology to be quite solid.
Thursday, June 3, 2010
The Vending Machines Trend
- A store of automated kiosks should cost less than an employee
- It is near perfect for the consumers who expected immediate gratification
- 86 percent of North American consumers were more likely to do business with companies offering some sort of self-service. (NCR Corporation's 2008 report)
Friday, April 2, 2010
The Dao of Competition: Is Winning Everything?

Friday, March 19, 2010
Notes from the Virtual Desktop Strategist

Compass Rule: The amount of time that it takes to plan and prepare (for the execution of the play) is inversely proportionally to the amount of time it takes to implement it.
Thursday, March 11, 2010
The Profile of a Strategic Leader

#
Mike Montgomery a thinking man's coach
Vittorio Tafur, Chronicle Staff Writer
Saturday, March 6, 2010
(03-05) 21:55 PST -- The consummate coach can take the five guys on his basketball team and beat you, and then take your five guys and beat his five guys. In the case of Mike Montgomery, he can build a power at Stanford and then years later find himself cutting down the nets for archrival Cal.
"Your job as a coach is to put your players in a position to be successful," Montgomery said. "Regardless of the situation."
Even if you're at Stanford, which has the most severe academic restrictions of any major-conference program. Or at Cal, where he coaches a freewheeling style very different from what he had on the Farm, with big centers down low.
Last Saturday at Haas Pavilion, Montgomery's Bears locked up the program's first conference regular-season title in 50 years, this after his Cardinal ended a 36-year Stanford drought in 1999.
"I'm sure it seemed weird to some people, going to work for your archrival, but the bottom line is he gets paid to do a job," said Utah State coach Stew Morrill, a close friend and former assistant of Montgomery's. "And boy does he do it well."
Cal athletic director Sandy Barbour put a scare in the rest of the Pac-10 when she brought in the gun for hire two years ago. And Montgomery's put some more notches on his belt. The Bears are 20-9 heading into today's game at Stanford and have all but sealed a second straight appearance in the NCAA Tournament - after finishing ninth under coach Ben Braun in 2007-08.
"It's very pleasing to see this group of seniors grow like they have, together," Montgomery said. "We're playing well right now."
Montgomery, 63, draws little attention to himself.
He was asked if he had gotten any phone calls congratulating him on Cal's title.
"No, people know me," he deadpanned. "Over the years, they know it's better to let me be."
Montgomery is happy for his players, who have been getting slaps on the back in the community.
"I think everybody's excited. A lot of people waited a long time and probably were fearful of being let down again," he said. "When we finally won, it was probably a load off a lot of people's minds. It's been pretty positive."
Winning approach
On Monday, Montgomery showed his players a videotape of all the things they had been doing well lately, from making the extra pass on offense to helping out teammates on defense.
Senior guard Patrick Christopher ate it up.
"Coach sees the glass as half empty most of the time," Christopher said. "So when he pours a little bit of water in there, it gets your attention."
Montgomery is admittedly a no-nonsense type on the court - " I want things done right," he said.
When he came to Berkeley, his resume - he now is 11 wins shy of becoming the 34th Division I basketball coach with 600 - demanded the Cal players' attention.
"Coach has had great teams in the past," senior forward Theo Robertson said. "Everything he says has worked and is proven."
"Obviously we needed some type of direction from Coach," senior point guard Jerome Randle added. "He put us in the right spots on the court to be successful."
/// The key is to explain to the players how an individual effort can improve the overall team result and how it can benefit each individual player.
A chess match
Montgomery considers the game a chess match, and clearly enjoys pre-game strategy sessions and late-game management.
"He is one of the most logical coaches there is," said Butler athletic director Barry Collier, a friend and former Montgomery assistant. "I know that's not going to win many points in a sexy contest."
Besides being an excellent evaluator of talent, Montgomery breaks the game down to a simple formula - if you shoot a higher percentage than you allow, limit turnovers to 10 a game and out-rebound your opponent, you win.
"In a world of chaos, he has unbelievable common sense," Morrill said. "It's a wonderful attribute. He never panics and is able to sort things out."
With the Bears, he's sorted out a roster that is more suited to shooting jumpers than scoring inside.
"We're not big and strong," Montgomery said. "Even if I wanted to be that kind of team, we can't be. We've gone with what we do best. And we've gotten better defensively and fundamentally."
He's given Randle, Christopher and Robertson the freedom to pull up for three-pointers on the fast break and has made peace with the fact that center/power forward Jamal Boykin prefers shooting 15-footers to playing with his back to the basket.
"One of the greatest things he's done is that he's allowed us to play our game," Boykin said. "He's never said, 'Don't take that shot.' He's allowed some unconventional players to still be creative, under his basic structure."
/// Focusing on one's strengths usually create a state of predictability for the well-prepared opposition.
Sister schools
Montgomery is not a flashy guy - the Long Beach native calls himself a homebody who prefers to curl up in a chair - and that helps explain why he is currently wearing a Cal sweater, with some Stanford ones still in the closet.
"There are places where it's national championship or nothing, and the graduation rate is not a factor," Montgomery said. "I don't think I would be very happy at those places."
There are obviously many things that differentiate Stanford, a private university, from Cal, a public school, and the cultures on the two campuses, but they do have similar values when it comes to academics and athletics.
The Cardinal hadn't finished higher than fifth in more than a decade when Montgomery arrived on the Farm in 1986.
"At Stanford, they didn't really feel like they could win," Montgomery said. "It didn't seem to be in the cards. 'This is what we are.' "
Were.
From 1986 to 2004, Montgomery led the Cardinal to 12 NCAA Tournament appearances, including the 1998 Final Four.
"One of the best things Mike did at Stanford was convince everybody nationwide that there is no excuse for not being a great student and a great basketball player," Collier said. "That's a testament to his ability."
After Stanford
Montgomery left Stanford to try his wares at the highest level, the NBA. He was 68-96 in two seasons with the Golden State Warriors, learning for himself how much more power the players wield than the coaches.
"The whole dynamic changes," he said.
He then worked as a television commentator for two years but was anxious to jump back into the college ranks when Barbour came calling.
"He is an expert at his craft," said Barbour, who was never concerned that Montgomery had become synonymous with Stanford. "But even more importantly, he has a passion for creating something special on behalf of the institution and the young men in the program."
Montgomery got to coach at a Pac-10 school that he respected, got to keep living in the Bay Area and got to work with his son, John, the Bears' director of basketball operations.
And simply, he got to coach. That's what Mike Montgomery is, after all, a coach.
"I like the way the game fits together," he said. "At the same time, it's made up of people with dreams and aspirations. And the bottom line is how you blend the different types of personalities into the same mind-set. That's where the challenge comes in."
Montgomery file
-- 589-264 record (236-123 in Pac-10, fifth all-time)
-- First coach in Pac-10 to win title with two different teams
-- Five Pac-10 titles
-- One Final Four and two Sweet 16 appearances
-- 12 straight 20-win seasons
-- 11 straight appearances in NCAA Tournament
E-mail Vittorio Tafur at vtafur@sfchronicle.com.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/03/06/SPQ31CBG3M.DTL
This article appeared on page B - 1 of the San Francisco Chronicle