It’s the Blockchain, stupid.

I’ve been a big fan of Bitcoin for a while and the potential for a true digital currency, but lately it’s been having problems. Some prominent voices in the Bitcoin world actually say it’s dead and that got me a little worried. I’m no longer bullish on the Bitcoin currency itself partly because of Hearn’s departure from the project, but mostly because first innovators usually don’t survive. I believe something else will take Bitcoin’s place one day as the defacto digital currency. In the meantime it’s all about the Blockchain, stupid.

Bullish on Blockchain

That said, I’m actually quite bullish on this technology. It’s the system that makes Bitcoin work.

Perhaps the most interesting thing about blockchain is that there’s no central authority or single source of the database. Which means it exists on every system that’s associated with it. Yes, every system has its own complete copy of the blockchain. As new blocks are added, they’re also received by every system – for the ultimate distributed database. If you lose your copy, no problem. By rejoining the blockchain network you get a fresh new copy of the entire blockchain. (h/t @ischwartz)

You can’t have Bitcoin without a Blockchain but you can have a Blockchain without a Bitcoin. In fact you can create a Blockchain for all kinds of things, especially financial transactions.

When you talk about blockchain in the context of Bitcoin, the connection to Big Data seems a little tenuous. What if, instead of Bitcoin, the blockchain was a ledger for other financial transactions? Or business contracts? Or stock trades? The financial services industry is starting to take a serious look at blockchain technology. Citi, NASDAQ, and Visa recently made significant investments in Chain.com, a Bitcoin blockchain service provider. Oliver Bussmann, CIO of UBS, says that blockchain technology could pare transaction processing time from days to minutes.” via Web 2.0 Journal

I think it might be time invest in these types of Startups.

Domo: We Didn’t Need the Money

If you work at a startup eventually some of your colleagues will leave for another startup. Some of my old colleagues are now at startups like Fuze, Continuum and Domo, so I keep a lazy eye on any news from those companies. Yesterday a Series D raise was announced for Domo. It was in the amount of $131 Million. Wow.

Utah-based Domo has been a force in the enterprise space for a few years with its data management platforms, but the team is poised for growth with an additional $131 million in Series D funding from existing and new investors, including BlackRock, Credit Suisse and others. These $131 million are an addition to Domo’s previously announced $200 million Series D round. The company says it is now valued at $2 billion.

You read that right, the company is now valued at $2 Billion dollars. The best part? CEO Josh James says they didn’t need the money.”

We didn’t need the money,” Domo founder and CEO Josh James said of the funding round. He called it a nice buffer,” but insists that the team didn’t require the cash and plans to go public within the year. via *TechCrunch

I get that having extra money is a nice buffer” but what about the terms? Unless the money was given to you with very little strings attached, money raises always come with terms.

So what gives? It might have to do with a messaging service that their offering on their recently released app store. It’s too early to tell but this could be a shot at Slack. The $131 million is about 38% of the total raise that Slack ($339 million) got so far. If Domo is going after them, then this needless raise” is a good start.

What does Value mean?

Last week I shared a few thoughts around what it takes to be a Sales Engineer in a high tech startup. My last thought, around understanding value, begs for a full post on that subject.

I hear the word value” thrown around so often that I wonder if it has a real meaning anymore. Everyone says their new product or service provides value, but what does that mean?

When I think about what true value means, I approach it from two distinct angles: time and money. No matter who you’re selling to, value will come down to a function of their time and/or money. That’s it.

We pay lip service to providing value for our customer’s time and money but we don’t grasp it completely. If we did, then our success rate for closing deals would be a lot greater than it is. Plus, we’d have happier customers.

Dissecting Time and Money

Let’s dissect both of these two components:

  1. Time – your customer might be under some time constraint. He/she might have to deliver a model, product, or some service to their customers or end users.
  1. Money – your customer is under pressure to increase revenues or cut costs. They have to do more with less.”

I come across these two problems every single time. No one buys a piece of software or service if they didn’t have one of these problems. The hard part for you is to prove to the customer that what you have is the right fit.

How do you do that? Instead of talking generalities in a demo, prove it to them by helping them build a business case.

Let’s take a typical sales pitch I hear all the time.

Our tool you can cut your ETL time in half!”

Ok, everyone says that. What’s so different about that? Does the next vendor cut ETL time by 55%? 55.6%? It’s a fluff statement, devoid of all context and meaning.

The New Sales Pitch

Now let’s look the same sales pitch but framing it into a context for understanding value.

An entry level Data Scientist makes around $120,000/year. That translates to $57.69/hr in direct labor costs in your department. If they spend 80% of their time on ETL work (1,664 hrs/yr) and we can cut that in half, you’d save $47,998 in labor costs. Our product/service costs only X% of those savings. With the time you save, your Data Scientist can work on new projects.”

Let’s read between the lines and see what was said. I told the customer that my product has value. I used back of the napkin” calculations to quantify it. Next, I pointed out that it only costs X% of the money they’d save from its use. Plus they could redeploy 832 hours of a data scientist’s time to some other project. You can do more with less.

Understanding Value

That’s true value right there. Quantifiable, in context, and meaningful to the customer.