The AlwaysOn Innovation Summit had,
The AlwaysOn Innovation Summit had, in addition to the usual panels, a series of CEO pitches, in which CEOs of tech companies presented their investor pitches to judges, who were instructed to judge them according to certain criteria on a five-point system. It was kind of a cross between a contest and a game, and reminded me of the VC Olympics. Many of these CEOs were already funded, and were pitching to get the word out about their companies, or to practice their pitches, or to prepare for the next round.
I decided to watch some of the pitches to see if there was anything I could bring back to my Fasttrac participants, or to the entrepreneurs that we coach privately. The first one I heard, for Konarka, was given by Howard Berke, who brought the MRI to market. This is his twelfth company, and he has already received $30m in initial capital. His competition is GE, so he's looking at Siemens as a partner (or vice versa. He is so experienced at bringing products to market that he takes for granted he will get the strategic partner he needs to succeed. He's well on the road to it. Konarka is a photovoltaic company that uses nanotechnology, so it's a combination of almost every buzzword in the technology dictionary. It has also been on the AlwaysOn list of 100 best private companies twice. Perhaps this will be the photovoltaic energy company that finally makes money.
Next comes the CEO of MySQL to talk about the database market. He says that MySQL will be the Dell of databases because open source software distributed over the Internet will also be distributing $1b in savings to customers. He's Scandanavian, and he says that MySQL is modeling itself after IKEA: simple design, massive distribution, and lower costs.
He also refers to himself as the Southwest Airlines: no luxury, but gets you to the same destination. And if you want to fly free, you can join the crew (report bugs, etc). He's good with analogies and metaphors. MySQL has a 5 million installed base, because the economy class is so much larger as a market size. There are 35,000 downloads a day from the site. The DBM services market is $8billion. He has to say all this in less than five minutes.
The MySQL customer can self-select whether he pays or not. Of the 5 million customers, 5,000 already pay for support and services, which enable the customer to get not only tech support, but freedom from the reciprocity requirements of the GPL, the overall license that governs open source products. This CEO is not a dreamer. He says some people have a mindset for never paying, and can't be converted. But they are a trigger for business in other areas. To pick up paying customers, he plans to sneak in to people's businesses. By looking at where the downloads are coming from, he knows the product is now going in to GE and Microsoft, and sooner or later they will pay for it, converted by underlings who have "sneaked" it into the organization because they didn't have access to Oracle.
The next presenter is also the CEO of an open source company. Sourcefire is a network security product; it secures internal networks from malicious viruses or infected laptops. It's a software company that has appliances with which is goes to market. Its CEO says there's a convergence between the networking market and the security market, and that first generation network security products like Symantec have not solved the problem. Its product is based on Snort, and is an open source network sensor that has intellectual property attached to it. Once an intrusion is detected, it locks down the firewall and changes the routing so the infection doesn't spread. Sourcefire both senses and acts on intrusions. Its CEO tells us there is inherent adoption around open source solutions. The products are not fat. They do exactly what the clients want.
In fact, Sourecefire resells through IBM and Sun, and is OEM'ed by Nortel.
What's my takeaway, after listening to all these impressive pitches? Well,they are not very flashy; they're pretty down to earth. Some of them are even in black and white. But they exhibit a powerful command of the market. No wonder experienced CEOs have been paid so handsomely. You can't fund or run a company without them.
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