Archive for April, 2007

More on commodotization - you can never rest

by Rajesh Setty on Sun 29 Apr 2007 18:57 PM EDT

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Competition can come from anywhere. Let’s take the case for Tivo. I think the promise that Tivo made was (and is) compelling. You can watch your favorite shows when you want it (and without the advertisements)

In simple terms, this meant:
* flexibility - you can choose the time.
* save time - you don’t want to watch the advertisements

If you think about it, while this works great for viewers like you and me, it does not work well both for the producers of TV shows (they need advertisers for their shows) and advertisers (they need viewers to see the ads)

So, what was the solution that marketplace came up with?

The networks have started sharing the episodes over the web.
(Watch the home pages of CBS and ABC)

If the reason you wanted to buy Tivo was to catch your favorite shows, that reason may not be sufficient anymore.

The second thing that is making this complex for Tivo is that most TV serials are now available for purchase or rentals at stores like Blockbuster and Hollywood.

The point here is simple. Tivo innovated the TV industry a few years ago. The competition, however did not come from another set top box maker but from two different places - web and the DVDs.

I am sure Tivo is working on refining their own strategy in the wake of these developments and it would be interesting to see their response.

You got to innovate but you can’t rest after that.

What will be your defense against commoditization?

by Rajesh Setty on Sun 29 Apr 2007 17:29 PM EDT

I saw a gadget on a webpage from Google Gadgets and it was cool. Exploring further, it seems like Google has tons of them in their gadget directory. Clearly at this point in time, Google seems to be interested in the gadget space. There are other players in the marketplace whose primary business model surrounds gadgets ( Examples: WidgetBox  Majikwidget ) and I am sure they are looking at this move seriously.

Generally speaking, While startups are great at innovating, they may not have the defense strategy outlined when established players launch an attack at their core strategy. When I searched for gadgets on Google, the first sponsored ad that came up was for Google Gadgets. This ad comes at a VERY low cost for Google but it costs a fortune for a startup to match that.

I am not offering a solution here but here are a few reminders:

1. Your core strategy may be vulnerable to attacks and having a “Plan B” will always help.
2. Innovation is important but a strategy to capitalize on your innovation is also equally important.
3. And, of course, don’t forget those patents. They do matter (sometimes)!

A simple story about thoughtfulness…

by Rajesh Setty on Wed 25 Apr 2007 22:57 PM EDT

This is a story (courtesy: Kannan Ayyar of Karna) from my old collection of gems


In the days when an ice cream sundae cost much less, a 10 year old boy entered a hotel coffee shop and sat at a table. A waitress put a glass of water in front of him. “How much is an ice cream sundae?”

“Fifty cents,” replied the waitress. The little boy pulled his hand out of his pocket and studied a number of coins in it. “How much is a dish of plain ice cream?” he inquired. Some people were now waiting for a table and the waitress was a bit impatient. “Thirty-five cents,” she said brusquely. The little boy again counted the coins. “I’ll have the plain ice cream,” he said. The waitress brought the ice cream, put the bill on the table and walked away. The boy finished the ice cream, paid the cashier and departed. When the waitress came back, she began wiping down the table and then swallowed hard at what she saw. There, placed neatly beside the empty dish, were two nickels and five pennies - her tip. 


The story is simple but the lesson we can learn from this is profound.

Have a great Thursday!

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A review that brought tears in my eyes

by Rajesh Setty on Mon 23 Apr 2007 13:40 PM EDT

I don’t know Justice Gray but he is no longer a stranger to me. Justice reviewed my book “Beyond Code” on his blog recently. Here is the link:

Beyond Code, The Totally Hetero Review

Justice captured my intent of writing this book better than I would have captured it myself. I am at a loss of words except to say “Thank you from the bottom of my heart” to Justice. You brought tears in my eyes today but in a good way.

Writing and publishing a book takes a LONG time. While I enjoyed every bit of it (about 10 years in the making) the joy I get when I know that this booked touched someone is special.

Thanks for making my day.

PS: The last time I had tears in my eyes was when I read my hero Tom Peters‘ foreword for the book

Blogging Starter Checklist - A milestone and a BIG THANK YOU

by Rajesh Setty on Mon 23 Apr 2007 13:19 PM EDT

I love Squidoo and I was one of  the early lensmasters to create lenses on Squidoo. I have seven lenses in Squidoo. Blogging Starter Checklist has been the most popular amongst my seven lenses by a wide margin. I have made a lot of new friends because of this lens.

Today, I saw that Blogging Starter Checklist was at the #1 spot in the “Business” category. It would not have been possible without the support of many of you out there. So a BIG THANK YOU to all who supported this effort. All the proceeds (100%) from all of my lenses on Squidoo goes to the charity - Room to Read.

Also, special thanks to people

a) who rated the lens and showed support
b) added comments at the end of the lens
c) reached out to me
d) those who linked it from your blogs, lenses, websites and newsletters

Thank you for walking that extra mile to show your support. It means a lot to me.

Have a great week ahead!

Quotes worth recording - H.E.Luccock

by Rajesh Setty on Sat 21 Apr 2007 18:36 PM EDT

While there are exceptions, in most cases you need a great team to go after a grand vision. This simple, yet thought-provoking quote sums it up very well.



“No one can whistle a symphony; it takes an orchestra to play it”

- H.E.Luccock


Seth Godin Live in Silicon Valley May 23, 2007 - confirmed

by Rajesh Setty on Fri 20 Apr 2007 20:57 PM EDT

Deepika Bajaj at Invincibelle and Edith Yeung are joining hands to bring one of my heroes Seth Godin to Silicon Valley. Thanks to our various sponsors, you can attend this event for $50. Wait. It gets even better. Every attendee will get 5 copies of Seth’s new book “The Dip” ($50 value)

I have read almost everything that Seth has written (multiple times). A few years ago, I had an opportunity to spend a day with him. I have learnt a lot from him over the years - so this is exciting! There are only a limited number of seats so please register at the earliest.

Here is the registration link

Seth Godin Live in Silicon Vally - May 23, 2007

If you are interested in participating as a sponsor, please reach out to Deepika here.

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Behind the Scenes - “Tips from the Trenches” project

by Rajesh Setty on Mon 16 Apr 2007 14:07 PM EDT

Terry Jansen (founder of PSVillage) and her team have produced a book called “Tips from the Trenches: The Collective Wisdom of Over 100 Professional Services Leaders” and giving it away (eBook only) for free on the website. This is an example of a true open source project.

I have watched this project since inception and it is a pure labor of love. A few hundred copies of the book have been downloaded so far.

If you are in the professional services business, you will enjoy the book. There are more than 160 tips from contributed by technology professional services leaders.

The following is an interview with Terry Jansen about the book and what happened behind the scenes during the creation of the book.


1. RS: Terry, for the benefit of the readers of Life Beyond Code, please give us a 30,000 foot intro of “Tips from the Trenches: The Collective Wisdom of Over 100 Professional Services Leaders“.

TJ: First let me start by giving your readers a 30,000 foot view of PSVillage so that I can put the introduction of the book into context.  PSVillage is an online community of nearly 1000 Technology Professional Services Leaders representing over 450 companies.  I founded PSVillage in 2004 to provide a collaborative forum for Professional Services Leaders to share research, best practices, and resources. Surprisingly there was nothing available in the industry that served this particular niche.   The PSVillage site hosts a moderated discussion forum, an on-line magazine, job board, benchmarks, Professional Services Automation reviews, a spotlight of members and a variety of free or low-cost services including webinars, white papers, workshops, research and networking events.  

Tips from the Trenches, which was just announced last week, is a book written by over 100 of our members.  It includes 165 practical tips on how to build and manage a successful technology professional services organization.   From “hire the weird” to road warrior tips for maneuvering through blizzard-impacted airports to incorporating armadillo racing into team meetings, it includes a variety of “lessons learned” from people who have been in the trenches and want to share their experiences with others.

2. RS:  Why is this book relevant today?

TJ: There is a lot of information on the web for pure consulting firms and IT services organizations but there’s a dearth of information that applies directly to Technology Professional Services in a software/hardware company — or embedded services — if you will.  This book is packed with lots of great practical tips that will be helpful to these folks.  Even if they glean one helpful piece of information then it will have been worth the read.

3. RS: This is an example of an open source project. Please tell us how the project was organized and how it was executed?

TJ: Yes, that’s precisely what it is.  PSVillage is a dynamic community with lots of interaction between its members, and to continue that momentum we needed to look for new and innovative ways for people to contribute without it being a major effort or time sink.  These people have very busy lives running projects and services organizations, they travel a lot and have families so they have very  little time for networking or participating in a professional organization.  I wanted to provide a way in which they could contribute that would be significant but would not take a lot of their time, and hence the community book concept was launched. 

I reached out to 10 of our members and asked 4 of them to be on the core book team, and 6 to be on the extended team.  Each of the 10 was responsible for getting tips in from 10 of our members (that would guarantee we’d get at least 100 tips) and they were also responsible for writing a tip.  The core book team was responsible for coordinating the entire process – including working with the extended team to get the tips in by the deadline, editing the tips — or re-writing them if necessary, writing additional tips if we needed them to fill in various chapters, and assembling the tips into the book to ensure the right flow.  We met every Saturday morning for 20 mornings straight to discuss the book’s progress and make decisions as a team.  We managed it as we would any project – deadlines, end date, project plan, etc.  The beauty of it all is that we had a great team – extremely knowledgeable on the subject matter, very committed to putting out a quality product, and fun to work with.  When we started the process, the team members didn’t know each other but by the time we finished the project good friendships had been formed.

We also invited companies to either sponsor the book or advertise in it.  We are using the fees collected for other PSVillage programs and initiatives, and we’re also giving 30% of the proceeds to Schools for Humanity, a non-profit formed by some of our members that is dedicated to building schools in developing countries.

4. RS: What were the challenges faced?

TJ: I think the biggest challenge was getting 100 people to participate in the timeframe we set (4 months from concept to completion), and devising a plan to make that happen quickly and easily.  By enlisting the help of 10 members to reach out to 10 others it really was a very efficient process and worked quite nicely.

Other challenges were getting sponsors and advertisers to sign up when we had no previous history of developing a book.  Luckily, our sponsors QuickArrow and OpenAir, are very supportive of the PSVillage community and they took a chance on us.  We also had difficulty getting the book converted to pdf from Word with the hyperlinks intact.  Everyone who jumped in to help out had major problems where some links worked and others didn’t.  In the end, we got it to work but it was quite a challenge. Another tough decision was whether to publish a hard copy particularly given the fact that we were already making the ebook available for free.  We decided it made a lot of sense to do so and expect the book to be available in 60-90 days from Amazon.com and Barnes & Noble as well as the PSVillage website.

5. RS: What were the lessons learned?

First of all, get the right people on the team.  We were extremely fortunate in that every person on the team brought unique skills that were complementary to the others.  And they all have deep experience running professional services organizations and projects.

Secondly, if you use Word for formatting a book, never begin formatting it until it’s completely edited!!!  We were constantly re-doing our work because every time we changed the words in the document it would throw the formatting off.  It caused us a lot of time and grief, but luckily the folks on the book team were patient.  We all pitched in where we could and the end result was a pretty spectacular product!

Thirdly, never underestimate the desire of folks to get involved but make it easy for them to do so and communicate, communicate, communicate with them so they become active participants in the creation of the book.  Initially we were very concerned we wouldn’t get enough tips in but we were absolutely delighted with the participation of our members.

6. RS: Why are you giving this book away for free?

TJ: The book was written by the community for the community so I thought it was important to make it available to everyone for their personal use.  If companies want to distribute it within their organization, they must buy a Corporate Use License.  Also, by distributing the book for free we felt it would not only help the PS community in general but would also create awareness of PSVillage — that this terrific community exists and it’s easy to join. 

7. RS: If you were to do it over again, what would you do differently?

TJ: You know, Rajesh, there’s really not a lot I would do differently.  Other than perhaps to get sponsors signed up earlier in the process and wait to format the document until the final editing is complete.

8. RS: Where can people download the book?

TJ: The book is available for a free download at www.psvillage.com.  We are in the process of publishing a hard copy version of the book.  If folks pre-order the hard copy by May 31, 2007 they can get a significant discount off the list price.  It’s 150 pages long so for many people that’s a lot to digest on their computer screen or to print out. 


Have a great week ahead!

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Why are the open source business people not ultra-rich yet?

by Rajesh Setty on Sun 15 Apr 2007 23:55 PM EDT

Hugh MacLeod started a discussion about open source and it’s impact by asking question “How well does open source currently meet the needs of shareholders and CEO’s?

One of the conclusions Hugh was reaching was that Open Source may not have made a big time impact yet. If it did, you would have seen a lot more famous billionaires in the open source world.

Having been one of the founders of an open source solutions company in late 2000 - CIGNEX,  I am passionate about open source and hope to provide my viewpoints on most points raised by Hugh in the article sometime soon. In this post though, I want to offer my $.02 about open source business people not getting insanely rich.

The basic premise: For someone to strike it ultra-rich in open source, the open source company they are involved with should make boatloads of money. Here are some reasons why it’s not easy:

1. Price points are low; volumes need to be high

First, we all know that the enterprise software and the open source business are very different. Open Source is typically developed by the community members almost forming virtual organizations (there are many exceptions, of course) Most contributors don’t get paid for their contributions. They are in it for the passion. You can make a business out of these contributions but since there is no licensing fee per se, you need to come up with some other reason to charge the customers (there are a number of business models that are becoming mature now)

However, the price points have to be lower than enterprise software so that volumes have to be very high to make serious money.

2. Competition from other open source software

Generally people think that open source software competes with enterprise software. While it is true, the bigger competition for open source software comes from other open source software.  Barrier to entry to create new open source software is low unlike creating a new enterprise software company. In fact, one way for the enterprise software company to kill an open source company would be to fund a competing open source company and confuse the marketplace completely :)
[Update] Courtesy Matt Dickman, please take a look at this interesting graphic - Linux Distro Timeline. Thanks Matt.

3. Getting the right people to manage an open source company is hard.

Open Source companies have a constant battle to get the top talent to fill the top spots in the company. Think about it - who is the RIGHT person to run an open source company? You can’t hire someone from a VERY successful (of the order of a large enterprise software company) open source company as there is none. If you bring someone from an enterprise software company, the person will have to unlearn a number of things as things are done very differently in the open source world.  I am not saying that there are no great leaders in the open source world. For the opportunities available today, there is definitely a lack of talent at the top.

4. It beats logic.

If open source is license free, the costs have to be low to work with open source.  If cost is one of the reasons for a customer to embrace open source, he or she will pay less than what they would have paid to a comparable enterprise software to do the same job. An open source company would have to therefore work twice as hard to a comparable enterprise software company to make the same or less amount of money. This means that they have to have a lot more resources than the competing enterprise software company. How can you have a smaller pie but feed a lot more people and still keep everyone happy?

I can go on but the point is - there is still a lot more to happen before people in the open source business can become ultra-rich. More about the same and related topics in the future.

Two Weeks to a Breakthrough Video - Lisa Haneberg

by Rajesh Setty on Fri 13 Apr 2007 08:50 AM EDT

Lisa Haneberg has a new video based on her new book “Two weeks to a Breakthrough” Everything about the video was fascinating to me and I am confident that you will enjoy it too. Here it is..

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