Specialization

Build vs. Buy

Wednesday, 7 May 2008

Salesforce.com

So my travel was supposed to be finished until mid-June, but alas, I find myself this week in San Mateo, CA for 4 days of administrator training for Salesforce.com. Salesforce.com is a very robust customer relationship management Software as a Service platform. We’ve decided at Doba to move our CRM (marketing, sales, and service) operations onto this hosted platform over time. We’ve been testing it in a limited fashion for the last several weeks.

In the past 5.5 years, we’ve built A LOT of software that originated from our “internal tools” roadmap–software to manage sales processes, billing processes, marketing processes, service processes, etc. Over the next many months, we’re going to work towards fulfilling those internal needs via the Salesforce.com system rather than building our own software. In essence, we’re working to stop building software that isn’t our core business, and leverage other platforms and software that are out there.

Let me say this: I’ve told quite a few people that we’re doing this, and a few of them have said, man, that Salesforce.com is expensive. We can build our own tools better/faster/cheaper. To that I say: no you can’t. Not even close. In my class with me is the Salesforce administrator (yes, at larger companies, they separate out that role) for AMD. Yeah, this AMD. And several other large companies from around the country. Salesforce Professional starts at $65 per user per month. They have a Group edition that’s even less. For that much hard money, not even counting the opportunity cost and distraction factors, you can’t build 1% of what this platform does off the self. And even if you need to customize it (a standard objection to not building things yourself. The whole “customizing it will cost us more than just building it ourselves” argument), it’s still so much more efficient to leverage the base of other software.

So my advice? If you’re a software company, build software that you sell. Build your competitive advantage. Anything else your business needs to operate and function? Buy it. And Salesforce.com is a dang good place to start looking for the whole CRM world. What I’ve seen here at Salesforce.com training is extremely impressive. Totally changing my build vs. buy viewpoint going forward. If you need bookkeeping/accounting, you buy Quickbooks. If you need word processing, you buy MS Word. If you need anything related to full lifecycle (leads to accounts to opportunities to service cases to service solutions) CRM, buy Salesforce.

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Posted by Jeremy at 12:47 PM
Category: Doba, Specialization, Technology| 3 Comments| Trackback

Feld On Focus

Wednesday, 19 July 2006

The day after I wrote about doing chicken and doing chicken right, Brad Feld over at FeldThoughts.com wrote about something very similar. In a post titled Lack of Focus, Feld—a managing director at Mobius Venture Capital—makes a compelling case for entrepreneurs like myself to focus and not deviate too far from our initial plan. Feld writes:

When we started Martingale Software in 1984, our original vision was “to write software for the new Apple Macintosh.” That was pretty broad, so as we sat around in a classroom somewhere at MIT (because it had a nice big blackboard that we could scribble on, plus it made us feel grown up), we decided to narrow our focus. After many hours (or was it minutes?) of discussion, we decided we would write “graphics software for the new Apple Macintosh.

We quickly got distracted. One of my early mentors – Gene Scott (who also happened to be our investor – he put up the initial $10,000 for Martingale) – was the founder and chairman of Scott Instruments – a voice recognition software company in Denton, Texas. Scott Instruments … asked us to write an application for the VET/2 for the Macintosh – we couldn’t resist so we had our first contract. … Of course, this had nothing to do with our vision for Martingale. I’m sure we rationalized this by thinking something like “we’ve got to eat”…

Several months later…we met a local investment management company… They wanted us to do some spreadsheet / graphics stuff for them. Ok – graphics - a little closer. But – they used PCs. So – we rationalized again, went out and bought a Compaq Luggable, and did some more consulting work.

Between school, our “extra curricular activities”, and our two contracts, we never wrote much graphics software for the Mac… The contracts enabled us to “be in business” for a while, but they had nothing to do with the business we set out to create. While the work enabled “survival”, our complete lack of focus (among many other things) contributed to our ultimate demise.

Click here for Feld’s post in its entirety (not terribly different from what I copied and pasted above).

Fortunately, for those of us who started Doba, we’ve never strayed from our original vision. Today, Doba has thousands of customers, and I attribute that success largely to our doggedly savvy determination to do chicken and do chicken right. While that’s not to say that we’ll never serve side dishes with our brand of chicken, you can pretty much bet the farm that we’ll never be a company that offers up beefsteak or lamb chops!

Posted by Jeremy at 6:34 PM
Category: Entrepreneurship, Other Bloggers, Specialization| Comment| Trackback

Doing Chicken and Doing Chicken Right

Monday, 17 July 2006

Visit KFC’s web site and you’ll see the following statement right on the front page:

In 1939, Colonel Harland Sanders first gave the world a taste of his most famous creation, Original Recipe Kentucky Fried Chicken, featuring that secret blend of 11 herbs and spices. Since that time, millions of people the world over have come to love his one of a kind chicken, homestyle side dishes and hot and fresh biscuits.

Said differently, Colonel Sanders “did chicken, and he did chicken right”, making him in my opinion the poster boy for specialization.

The notion of specialization recently surfaced in my own life. Just over a year ago, after running out of living space, my wife and daughter and I moved from our small town home into a brand new home capable of handling our growing family. Somewhere along the way—between choosing the right neighborhood and finalizing the custom finishes on our new home—we decided to keep the town house as a rental unit. The way we saw it, owning a rental property was a good investment, not to mention part of the American Dream.

Long story short, a couple of weeks ago, after our first our renters moved out because we decided to not renew their lease, Amy and I chose to put the town home up for sale. It took us a year—a very looooooooong year—to figure out that we’re not the real estate investor types. To say that we had problems with our tenants would be an understatement. After spinning our wheels for close to eight months,, we ended up hiring a property management company to deal with the day-to-day issues, but even that was distracting. At the end of the day, we decided to do chicken and do chicken right.

As an entrepreneur, I’m faced with specialization-related issues on almost a daily basis, and while I’m deeply committed in my belief that specialization wins out nearly every time in business, somehow I lost sight of that fact in my own life. I say, find what you do well, and only do that. I am a good leader and a good entrepreneur. I am not a real estate investor. It’s only a distraction to me from what I am good at.

So the town home is being sold, and I now can focus on my specialty (which if you ask my wife is raking the front yard and taking out the trash). I’ll post more about specialization in the weeks to come. In the meantime, I encourage everyone reading this post to find their specialty and focus primarily on that.

Posted by Jeremy at 7:49 PM
Category: Entrepreneurship, Specialization| 1 Comment| Trackback