1. Watch Out Salesforce, Microsoft Just Became the Social Enterprise

   Lookout, Salesforce, Microsoft just became “The Social Enterprise.”

   Microsoft just took Salesforce’s idea of the social enterprise and leapfrogged them with the announcement this week that they will buy Yammer. To be honest, my first reaction was to mourn the death of a service I love, but after further reflection I’m actually pretty excited about it.

   If you believe the following statements are true, then you can probably see what Microsoft is poised to do:

   1. In most enterprises, CRM has a limited user base
   2. Microsoft Office is pervasive in a majority of enterprises
   3. Social happens from the bottom up, not the top down

   Yammer has over 3 million users today. Enterprise organizations can start using Yammer without buying anything, and they do. While it’s possible to get a Salesforce Chatter account for free, in reality how many employees are flocking to Chatter that wouldn’t first start with Yammer?

   In most of the companies I’ve been a part of, I haven’t wanted to touch the CRM system. They are typically not user friendly, of poor data quality and in many cases fragmented along departmental lines in larger companies (my company has a few CRM’s internally for various functions).

   It’s clear from the announcement that Microsoft will integrate Yammer with the Office suite, and I can only assume it will be integrated into SharePoint. I use office every day. In 2009, Microsoft boasted 500 million Office users which according to later reports is now more like 750M – 1B. If Microsoft can manage not to kill Yammer by over-charging for it, they may ironically be the company that makes good on the promise of the social enterprise.

    

    

    

    

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   Categories: Business of Software, Product Management.

   By Jay

   — June 27, 2012 at 3:03 am

2. Putting all your eggs in one basket

   Two stories hit the front page of Hacker News yesterday that caught my eye. Both were about startups who lost access to key platforms. PadMapper is a user-friendly app for finding rental properties. A major source of PadMapper’s listings come (or came) from Craigslist. Pealk has developed recruiting productivity tools on top of LinkedIn for recruiters.

   These occurrences beg the question: How heavily should one partner/platform be relied upon when building a new company? Seems to me one of the key responsibilities of a founding team is to reduce risk wherever possible. When it really comes down to it, you have to look at the business model of the company whose ecosystem you’ll be joining and assess risk by asking a few questions of the model: What happens if this partnership goes away? Will my company be viable? Is the relationship symbiotic or one-sided? Do they need me as much as I need them?

   Companies like LinkedIn and Craigslist have built their businesses on very specific models, and only secondarily have become ecosystems for 3rd parties. One mustn’t forget that being a platform isn’t necessarily in their DNA. And it’s not their primary source of revenue. They provide access to one of their most important assets, their data, to entice 3rd parties to contribute to their product. But in the end this is primarily to increase their own user base.

   When a startup depends almost exclusively on a behemoth like LinkedIn or Craigslist, the imbalance is just too great and at the end of the day the startup has very little leverage.

   So what’s the best course of action if you want to join a platform ecosystem? Read and understand the terms of services, decide if you are willing to build a business within those constraints, and hope that the terms remain consistent as you build your company. It’s best to remember that at the end of the day these are corporations and the business factors are likely to override the benevolence of the engineering teams when it comes to monetizing their products.

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   Categories: Platforms, Product Development, Startups.

   By Jay

   — June 24, 2012 at 12:50 am

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