

Pitching Sequoia? Here’s the big question you’ll need to answer - _pius
http://pandodaily.com/2013/02/20/sequoias-why-now/

======
mindcrime
Now that was a good PandoDaily article. Short, succinct, but valuable. I wish
we got more of this kind of article on HN!

Personally, I've spent a lot of time thinking about various "important
questions" that I've gleaned from sources like: watching videos of pg doing
office hours, reading pg essays, reading VC blogs, reading Steve Blank's
material, etc. Also my $DAYJOB boss, acoliver, is big on harping on the
question "what problem does this solve?" (a pg favorite) and "who can the
business owner fire if they acquire your solution"?

And despite all that, I'd never encountered this question before, at least not
in this form. It certainly isn't one of "the questions" I try to have an
answer to. It will be now.

Of course, it isn't about Sequoia, or any other specific firm... it's a good,
solid question that helps you focus on important aspects of your business. Is
it a technology thing? Is it a market thing? Is it a public opinion or
demographics thing? Something regulatory? Whatever "it" is, you should
probably know about it if you have really figured out your market, your
technology, etc.

I'm looking forward to digging deep on this vis-a-vis Fogbeam Labs, but here's
quick, off the cuff answer for us:

"Because the world is moving towards Open Source software and we believe that
most important self-hosted enterprise software is going to be OSS in the
future. Additionally, computing power and scalability necessary to do the
complex machine learning operations that we need, are now widely available and
affordable. And finally, because improving internal knowledge transfer and
process efficiency is one of the few remaining areas to gain a sustainable
competitive advantage".

(Aside: for anybody who doesn't know what we're working on, it's OSS software
that works at the intersection of Knowledge Management, Information Retrieval,
Social Networking and BPM. Think "Facebook for the Enterprise" (kinda like
Jive or Yammer) but with a much deeper level of integration into business
process and workflows.)

~~~
thoughtcriminal
_the world is moving towards Open Source software..._

I'm not so sure, and if it is, it's happening slooowly.

I've read other (insightful) comments of yours about Flogbeam Labs and you
sure are passionate. So much so you might be seeing trends that aren't there.

All I'm saying is beware of that cognitive bias.

~~~
mindcrime
_I'm not so sure, and if it is, it's happening slooowly._

Oh, absolutely. But this isn't _entirely_ a case of wishful thinking with no
foundation. I'd have to stop and spend time to dig up the links, but there
have been more than a few analyst reports and what-not, including by the big
boys like Gartner and so-on, saying the same thing.

We've also heard this from customers. Just to give one example... we sat down
with some people from a major bank (they're in the Fortune 250) and asked them
some of these questions. What we heard was "5 years ago, OSS would have been a
non-starter. Now, we're actively looking to use more OSS because we believe it
delivers better value".

That said, we're not saying that Oracle is going to go away anytime soon, but
there are a lot of signs there. Going back to Oracle for a minute, their
acquisition of MySQL says something. And Red Hat breaking the billion dollar
mark in revenue last year is also an encouraging sign.

 _All I'm saying is beware of that cognitive bias._

Well said.

------
pg
This is actually one of the most important questions.

------
yid
Skipping the cruft, the question is "Why now?"

------
chacham15
This question seems important if the startup is the first to move into a
specific area, but ones that improve execution IMO dont really answer this
well. For example, what would the answer have been for Google?

~~~
pg
Actually Google would have had one of the clearest answers: that the web is
growing to the point where (a) search matters a lot and (b) ranking results
based on textual similarity is no longer enough.

------
vannevar
This a typical example of VC rationalization, built on a sandy foundation of
survivor's bias. YouTube's 'Why now?' might more accurately be answered,
"because we just made people a ton of money on PayPal and there's a lot of
venture capital sloshing around looking for a credible home." The company lost
money for five years, so without the Google buyout, 'now' might not have
turned out to be such a great time. Just ask MySpace, the number 2 video-
sharing site when YouTube got snapped up. Good thing Moritz was on the Google
board at the time of the investment. I wonder how many times Hurley and Chen
had to rehearse to pitch to Sequoia?

