Praise and criticism of “The Other IPO Roadshow”

Deepak Jeevan Kumar of General Catalyst Partners wrote a pretty good overview piece on TechCrunch describing his point of view of how to launch a F500-focused enterprise software company. Many parts of it ring true based on our experiences at Mediafly and my previous experiences:

CIO offices in Fortune 500 companies are trained to play it safe. Many companies stick to Oracle, VMWare, EMC and Cisco not because their products are the best in the world, but because no one got fired for selecting one of them.

That’s so very true. Often this is driven by their own experiences, but just as often it’s driven by internal politics. We heard recently from a customer (who was discussing another part of their business, thankfully) “if we don’t go with Microsoft for [terrible product A], our prices will go up on [pretty good product B used somewhere else], and we can’t have that.”

Do not use unpaid PoCs even if you have to wait one to two months to get a paid PoC.

This is very important. Customers that don’t put money behind a proof of concept simply don’t have enough skin in the game. We’ve been on the wrong end of this story before:

  • Prospect says “well, if you have feature X, I’ll be willing to buy then.”
  • You spend days/weeks/months building feature X, in hopes of securing their business
  • You show feature X to prospect
  • Prospect says “Great! Now, if you have feature Y, I’ll be willing to buy then.”
  • Repeat

Customers who are not willing to engage in a paid proof of concept are not worth it, no matter how large.


Some parts of Deepak’s perspectives don’t seem right:

Second, power and influence in the early days can come from public silence for enterprise startups (unlike consumer startups). Your competitors, the media and your customers like a game of treasure hunt to find out what you are doing.

In reality, as a “stealth startup”, no one really cares what you are doing. And the last thing customers want to do is to spend time trying to dig to learn your secrets. They are usually too busy running their business.

As you are selling to a select group of Fortune 500 customers, there is no point in announcing to your powerful enterprise tech competitors (e.g Cisco, Oracle, IBM, HP) what you are up to. Convince your design customers first before you open up the kimono.

Again, even if your largest competitors figure out what you are up to, it’s highly unlikely that they will try to usurp your untested, unproven ideas. They are busy running their businesses and executing on their product and company vision, to bother trying to knock you out. Of course, all this changes when you start to generate real traction and, more importantly, win deals from under their nose. But you are not at this stage yet, pre-customer startup.

That being said, I do agree with the general premise that you shouldn’t spend time talking about the product too publicly. But for these reasons. I believe that’s the case because you should be 100% focused on executing on delivering your product to these large companies that are taking a chance on you. Spending time engaging in PR is a waste of your time, as you haven’t proven anything yet.


Overall, this article is definitely worth a read for anyone starting down this road.

Not all DRM is bad (and other thoughts)

HTML5 VideoI’d like to follow on my earlier post that HTML5 needs DRM (specifically, Encrypted Media Extensions, or EME) with some other thoughts.

Not all DRM is bad. While technologists and consumer groups disagree with DRM in principle (users should own content they purchase outright) and implementation (DRM is easily circumvented, so why bother?), there is at least one legitimate use cases for DRM: internal content. Oftentimes internal content is meant for a specific person, group or organization, and is not meant for or ready for public consumption.

EME compartmentalizes DRM and brings developers and users back to the web. Today, the only options for DRM’ed video or document playback consist of heavy, closed plugins such as Flash or Silverlight, or closed apps that are entirely off the web (iOS, Android, Windows 8, desktop). Both of these options compete with the web as a platform, and steal developer and consumer interest away. But fencing DRM capabilities into an HTML5-compatible plugin pushes DRM into a background and can help bring development back to the web.

“No DRM” principles can’t change economic reality, but contained DRM can. The Free Software Foundation and Electronic Frontier Foundation push for “no DRM”. One of their many arguments is that DRM doesn’t work. A determined hacker can bypass any encryption or management scheme that exists, with the benefit of time. So why bother polluting standards with DRM? Yes, it is true that DRM can be circumvented with time, but it doesn’t change the economic and legal realities of today:

  • Companies that create content want some levels of assurance that their content won’t be stolen when delivered to third parties, and write this into contracts. No system better than DRM (specifically, encryption and revocation) exists today.
  • Simply providing content that is DRM-free but watermarked is insufficient (not to mention extremely expensive and technically challenging). I will likely write more on this later.

Baby steps to a DRM-free world. As Peter Bright @ ArsTechnica suggests, one of the benefits of EME is to allow content creators to tiptoe into DRM-free distribution, which may lead to an eventual transition to “No DRM”. Expecting them to dump DRM from all existing contracts and approaches without a gradual path to achieve this simply will not work because of the realities of today. And EME can provide that gradual path.

Further reading. Some good, thoughtful* articles on the pros and cons of this decision:


* Thoughtful compared to the “I hate DRM! Boycott Netflix!” one-sided nonsense that pervades vocal tech commentators today.