Rypple, Actually Tidal Wave, in the HR Pond

I spend a lot of time looking at what is going on in the world of HR software, partly because we are in the space, partly because it is interesting, and partly because there is a MASSIVE amount of opportunity out there.

One of the trends that is happening in the marketplace is that work is becoming more distributed, people are working for companies for shorter periods of time and more people are becoming contractors rather than individual employees. Hand in hand with that evolution is the concept that individuals are taking more ownership of their career development. Vancouver based Jiibe has started to push the envelope in terms of connecting people and companies that fit them from a cultural perspective.

My favorite, and not just because Peter Thiel has invested, or because it was started by a couple of friends, is a company called Rypple. The premise is dead simple, but the results are outstanding. Within just a few minutes, you can ask questions of people you trust, get feedback them, and use that feedback to improve your own personal performance. The neat thing about the model is that it takes performance management away from an employer led annual hand wringing exercise, and puts it into the hands of individuals into a continuous feedback loop. They have had great coverage in The Economist and Business Week.

Being compared to Facebook and Twitter? Not bad. Rypple is one to watch, or work for.

Four Case Studies - Why Market and Capability Awareness Matters More Than Exit Strategy

Wow. My post from yesterday generated a lot of comments, which is great. But in hindsight, I might have been clearer about the message: the message is not don't worry about the exit strategy ever, the message is focus on building a business first, and the exit will take care of itself when you have built that business and decided to exit.

Exits happen. They happen even when you don't plan them (Peoplesoft). Sometimes they don't happen when you do plan them (Infowave). The best exits are when a company gets BOUGHT, not when it gets SOLD. The best way to get bought is to create business momentum, and the best way to create business momentum is to focus on building a business. But more on that on another day.

(disclaimer: while I may not have captured the nuance of every situation below perfectly - I wasn't at each company for the entire process, I am less than 100 years old - they are generally correct, and that doesn't matter anyway. What matters is paying attention to the thinking process that happened every time. )

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Planning an exit strategy? Don't waste your time

I haven't met Basil Peters, but we share a few common Facebook friends, so he must be a good guy.

Basil has recently been promoting the concept of thinking about exit strategies as a start-up, and I understand his perspectives in his role as an angel investor, but does that perspective serve entrepreneurs? I think the answer is no. Thinking about exit strategies is fine and good if you already have an existing business that is generating a few million in revenue. But for brand new start-ups, it is a big distraction away from building a business.

I started in the software industry only about eleven years ago and during that stint, I have had the privilege of working at or being a director of four companies that have had successful exits. What do they all have in common? Other than being successful, not one of them ended up exiting in the business that they contemplated when they first started the company.

And this is the rule, not the exception. If you are an entrepreneur, pick up a copy of Jessica Livingston's book, "Founders at Work." Read the interviews with Max Levchin (PayPal/Slide), Evan Williams (Blogger/Twitter), Sabeer Bhatia (Hotmail) and many others. Not one of them exited in the business that they started off trying to create.

What does that tell you? Doing a start-up is a lot like finding the unknown solution to an unknown problem. If you are iterating and working to find a profitable niche in the market, chances are that you will change your posture at least once, and your investors should be ready for that. If you are convinced that you are right and plan to be dogmatic proving that you are right to the market and to your investors, well, good luck (and be sure to stock up on the Tums).

So the question for entrepreneurs is simple, are you trying to build a business, or trying to make money? There is nothing wrong with either, but your bias should be to the former for a simple reason: if you focus on building a business, you will eventually make money, but if you focus on making money, you may not end up doing either.

I am actually going to prove my point: coming up, four highly personal case studies.

Twitter was Stupid: Game On

Heard in a boardroom: "Twitter is stupid." "Twitter is a waste of time." "I don't get the exhibitionist SMS fetish that Twitter users have."This is understandable given the way that most people are using Twitter today. What is interesting is how many smart people judge Twitter as an application, and how few judge it as a platform/communications channel.

As a social platform, Twitter has two interesting characteristics . First, behavior on Twitter is a lot like behavior on instant messaging services, it is violently fast. Second, the unique one-to-many messaging characteristic of the system means a potential for Marshall stack-like amplification of messages through the re-tweeting process. Leveraging these characteristics in a business context can be very powerful for any company, but to do so, you need to think of Twitter as a platform, not as an application.

We are already seeing Twitter being used very successfully by Dell and others for broadcast marketing promotions. But it is very early days, what else needs to be done? How about Constant Contact for Twitter? I am willing to bet that there are a lot of organizations that would be willing to pay anywhere from $50 to $500 per month for a system to send personalized tweets (not broadcast tweets), measure response and click through, measure conversion and use that data to build a marketing database for future segmentation and offers. How about a $10 per month for a SurveyMonkey app? How about a simple social polling app that is ad supported? These can be very lucrative businesses for small teams that are willing to put in the resources to create an app and can then get traction. I haven't seen many products out there like these that are useful for business people, even though my colleagues have expressed a desire for them. (and, yes, I have looked)

Twitter the application provides a realtime pulse for businesses and brands around what is being discussed in the Twittersphere. Twitter the platform is a breakthrough communications vehicle to engage with the public. Twitter is headed past the tipping point, but social software developers need to put on their business hats to put Twitter into the right context to drive more meaningful conversations in the boardroom (and drive more revenue). Game on.

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