Monday, March 31, 2014

Only in Palo Alto! Cloudera, Hortonworks and Hadoop

Cloudera's new Series F  funding announced initially March 23 for 160 million  is actually 900 million dollars. As we see from Crunchbase below, the insiders knew that Intel also invested $740M, but for some reasons unknown to outsiders did not break the news until March 30, 2014.

Cloudera is now worth on paper $4.1 billion, which is an average of $7.2 million per employee (570 employees as of today)

Cloudera's competitor, Hortonworks announced also funding of $100 million on March 24, for total of nearly $200M so far financing. The two companies fought bitterly in the recent months. The Hortonworks team believes it’s poised to take the Hadoop crown and Cloudera is poised to fail because the market is still too young to buy the enterprise data hub package Cloudera is selling

Hortonworks CEO Rob Bearden said  "he expects the Hadoop market will be worth about  $25 billion in the next few years and he expects Hortonworks itself is headed toward an IPO and $1 billion in annual revenue by 2017 or 2018."

Hortonworks last round of financing includes BlackRock, the largest asset management firm in the world. On February 12, 2014, Larry Fink, Blackrock's CEO said 
"We are bombarded with information that we can not make sense out of it. We can't decide whether this  Big Data information  is good or is bad.  As a result every CEO, government decision maker handling money only invests short term.  Some CEO's buy back shares to invest the cash in government bonds at 2% interest rate. Companies sit on lots of cash, too afraid to spend it." 
Larry obviously changed his mind and participated in Hortonworks round. He is a very shrewd investor and Hortonworks is lucky to have Blackrock as a backer.

The CEOs of both Cloudera and Hortonworks may have some secret decks of  slides that managed to convince the elite of the investment community from east coast.

How they did it, it's a mystery to me. It's like watching a new version of the movie The Illusionist

Life on the web depends on emotions. If you are bored , you may go to YouTube or Google. If you are curious, you go to Wikipedia or Quora. If you are lonely, you go to Facebook.

But why I should go to Hadoop? It's still complicated like hell for mainstream  companies. And it is a system administration tool, making data accessible to data analysis and predictive software, which users actually see.

So I guess there will be - according to Hortonworks - tons of CEOs and decision makers who would like to know new predictions about the future based on facts yet undiscovered because we have not yet enough data to analyze. And these CEOs will be prepared to pay $25 billion per year to have Hadoop?

Only in America! Or better said Only in Palo Alto!

Some people say we have Silicon Valleys duplicates in London UK, in Japan and China somewhere, in Miami Florida or Austin Texas. Maybe. But not the Silicon Valley from Palo Alto, CA, next to Stanford University

Because to create deus ex machina a company worth over $4 billion in about a week based on Hadoop that is freely available from Apache, THIS, ladies and gentlemen is possible Only in Palo Alto!



Series A, 3/2009 2
Accel Partners
Diane Greene
Qi Lu
Jeff Weiner
Mårten Mickos
Gideon Yu
Caterina Fake
Youssri Helmy
SV Angel
$5M
Series B, 6/2009 3
Accel Partners
Greylock Partners
$6M
Series C, 10/2010 4
Meritech Capital Partners
Accel Partners
Greylock Partners
$25M
Series D, 11/2011 5
In-Q-Tel
Ignition Partners
Accel Partners
Greylock Partners
Meritech Capital Partners
$40M
Series E, 12/2012 6
Accel Partners
Greylock Partners
Ignition Partners
In-Q-Tel
Meritech Capital Partners
$65M
Series F, 3/2014 7
T. Rowe Price
Google Ventures
$160M
Series F, 3/2014 8
Intel
$740M


Read more: http://www.crunchbase.com/company/cloudera#ixzz2xYtVjx2M

Sunday, March 23, 2014

Cloudera new funding of 300 million dollars and the IPO prospect.

The question What is happening with Cloudera? from my blog on February 11,  has now an answer. According to Gigaom:
Cloudera has raised a $160 million round of venture capital, the company announced on Tuesday, led by T. Rowe Price, along with three other public market investors, Google Ventures and an affiliate of MSD Capital, L.P., Michael Dell’s private investment firm. Cloudera has now raised $300 million in venture capital as it marches toward an apparent IPO.
In my article of February 11, I noticed an influx of "ivory tower" engineers and employee, but the company did not develop a Super Founder leader and their mission was to teach the world Hadoop. I do have a lot of respect for Cloudera engineers, for example Daniel Templeton, ex-Sun who is one the best  technical expert I ever worked with. Probably they are many more like him in Cloudera.

It seems the idea to go IPO , according to  CEO Tom Reilly
“Going public is not an event — it’s a long process and we still have a lot of work to do. Our CFO is still closing his books on Quickbooks,”
But why would an investor buy Cloudera shares when they go public? Google has yearly revenues 33 billion dollars, of which 32 billions  is an advertising income. This means the mighty Google, would have had been a $1 billion per year in sales if they sold their technology alone.

Cloudera wants to sell the EDH, the enterprise data hub,  in every enterprise in the world. If it works, this will be significant , yet it will not be another Google sized company. Because selling technology only, it is not credible to make more than $ 1 billion in sales. Plus the competition from Intel and IBM Pivotal, among many others.

As a humble external blogger I can only say  we need some out-of-the-box thinking. Someone in Cloudera should become a Super-Founder. It is never too late. Perhaps Tom O'Reilly can become one.

Here is hint: rather than having an enterprise only data hub, why not create an agency of virtual organizations where each member can access the data of another member. This is how Open Science Grid (OSG) works, except Cloudera can run this as a business operation. . However here participants are not after capacity, but more data to extract better decisions. This OSG model can also, with a bit of creative dreaming, accommodate advertising revenues.

With 300 million, there are enough money to uplift the Cloudera's EDH to the model EDH OSG-inspired as hinted in the figure below.

Saturday, March 22, 2014

The Wow Wow Wow Thinking of the Super-Founders


From my previous post, I defined a Super Founder as follows:
A Super-Founder has both the skills (1) to bootstrap the company and (2) to manage the growth creatively when an abundance of funding suddenly becomes available.
A founder in general thinks like this; I have a new technology, I get some seed funding, I get customers, I offer the product or service for free or low price. When I have more customers, I increase the prices, I get a few more rounds of capital, I flip the company and I am rich.

Google's super founders created the best web search technology in the world. For a while they sold some search appliances for private businesses. But they soon realized the biggest, by far, potential is advertising.

When we say advertising, we used to think instinctively in newspapers. in 2014 the top newspapers in the nation, like The New York Times struggle to replace sinking ad revenues , which for NYT  are maybe $0.8 B per year.

Google makes $32.2 billion per year, at least 40x  New York Times advertising revenues. Even more amazing, the total revenues of Disney Media Networks  (everything, not only advertising)  is $ 20.3 billion. Google makes 50% more in ad revenues only.

 This is obvious today. It was not in 1999. All other revenues are $1.1 billion for Google. If Google would  have not taken the path of ad income as main income, they would have been a $1.1 billion company. This would have been a supreme success for most success stories in high tech.

But the Google Super-Founders executed a phenomenal monetization plan.

See this self-explanatory infographic produced by Larry Kim, The founder and CTO of WordStream:


We have a similar story at Facebook, another Super-Founder company

Facebook growing ad revenues are 91% of total revenues
Now, for Facebook, remains to be seen how it will leverage the WhatsApp application. I can not predict because as a humble blogger, I have not the vision of a Super-Founder.


Thursday, March 20, 2014

Mobileiron Season 2

In July 2012 I wrote about  Why Mobileiron stands out in MDM, according to Gartner I liked the company and their potential Mobile Device Management (MDM), as they were undisputed leaders. See the Gartner MDM Magic Quadrant from 2012
Figure 1: Gartner Magic Quadrant MDM 2012
In 2012 Mobileiron came after 400% sales increase in 2011 and they had an investment of $60M. Since 2012, following the 2011 euphoria, they receive two more rounds of  $88M additional capital, for a total of $148M. That was an increase of  150%.

This is how the Gartner MDM Quadrant looks in 2013.

Figure 2: Gartner MDM Magic Quadrant 2013
What Mobileiron did with this huge capital injection? They started hiring massively left and right. The web site management team looks like Cisco and one can see executive experts in company politics making compromise decisions. Most of them never started a company before.

In 2013,  the landscape changed. In the leaders quadrant we have SAP. Also Citrix  is there - they acquired     Zenprise ,  The former Zenprise CEO and founder Amit Pandey, leads Citrix's new Mobile Platforms product group, although recently there are  reports he left Citrix for greener pastures (*). This creates an unhealthy perception that  an MDM company business is hard to operate without the  original team

These are seasoned and large  enterprise companies, who will take huge chunks from the business potential among the leaders in MDM enterprise space.

Magic Quadrant June 2014

In 2014 Magic Quadrant, we can big threats from IBM and Citrix. Mobileiron wants to go IPO, because it can not compete with the giants. Will an IPO be enough? They are not Facebook. There is no Zuckerberg there.

Some warnings from Gartner 2014 MQ report
Eventually, mobility will not represent a distinct set of platforms with their own management requirements. Mobile devices will be one of many components in a user's personal cloud. IT's job will be to manage access to and policy for each user's personal cloud
If that happens before MobileIron cashes out through some form of exit, they will disappear like the smoke from a  dwindling fire.


(*) See report from Gigaom

Monday, March 17, 2014

How To Make People Listen to You: Ten Steps

Do people listen to you? Ten bullets to check before you answer.

1. Do we know what the listener does with the message?

 No one ever complains about a speech being too short! Listeners make associations that will complete the message. Don't sub estimate their intelligence

2. Will the listener feel comfortable and secure?

Yes, give them exactly the same advise you would like to hear

3. The listener will defend and re-enforce any attitude we attack? 

‘There is no right not to be offended!’: It’s a popular  slogan. Some time  we have excuses:“But I didn't mean it!” Yes, but it’s so hard to prioritize impacts over intents. Always feel the empathy of the listener before speaking (and not after that)

4. Is our  message relevant to listener's circumstances?

Take visual clues in face to face meetings. Look at the pageviews for each article if you are a blogger. Then use your extra-sensorial feelings. You will be surprised of the new skills you develop in tuning your feelings to listener feelings

5, Do you know the best listeners are in insecure relationships? 

Vulnerable listeners are craving to be heard and understood. Great communicators restore people faith in themselves and do not take advantage of the their vulnerabilities

6. People will listen to us only if we listen to them?

This a test for the communicator who wants to send messages to people  he likes listening to. He can not communicate with people who make her impatient.

7. People will more likely accept change if they are consulted before?

Yes. Change must involve the people - change must not be imposed upon the people. This is what every text of "change management" says. But in communication, ask questions and have multiple answers based on the audience responses. All answers must make sense to you and to the people listening to you.

8. People reaction depends upon who delivers the message, when and where 

Look in the mirror and ask; "Am I the right person to bring this message to these people?" Then, "is it the right place and the right time?".  It is incredible how many professional communicators never ask these questions. But you do, right?

10. Sort out your own internal conflicts and doubts, before making others listen.

This is harder than it looks. Most people fake that they are completely solid emotionally, but something like this does not exist. We are humans. Even US presidents have tears in their eyes on occasions. But don't fake either rock solid convictions or show artificial doubts just to make a point

Monday, March 10, 2014

Fighting the obsession to see people as numbers

SAT, MSAT, LSAT and ShmAT

As  I wrote in my previous post Can Human Resources Adapt our society is obsessed with number evaluations of human beings. The entire school system is based on ratings. Our traditional employment system is based on ratings. I learned from a tweet of a famous venture capitalist, that SAT system will be reformed.

I suppose we can not live in a society that eliminates ratings. But very wise people do not need ratings, or they interpret the numbers wisely. Higher does not mean better. Google seems to see the problem clearer.

 I wonder what the top law, medicine schools in US think. Using ratings, they admit a stereotype candidate, and this stereotype picture often fits the privileged ones
Must read also from New York Times:about the politics of changing SAT and of the College Board need to renew itself

Behind the Cover Story: Todd Balf on the Coming Changes to the SAT

Saturday, March 08, 2014

WhatsApp versus Safeway. A lesson. Updated

Maximizing the employee productivity

Safeway  supermarket chain was sold for $9.4 billions. They have 180,000 employees.  They have 1,335 stores in the United States and 195 in Mexico with its partnership with Casa Ley

This means the Safeway's selling price is $52,000 or $0.05 million per employee.

WhatsApp was sold to Facebook for $16 billions ($19B everyone reports includes performance bonuses payable later). They had one location and 55 employees

This means the WhatsApp's selling price is $291 millions per employee

WhatsApp made the human beings it hired 5,820 times more productive than the same human beings working as Safeway employees.

This is why Jan Koum and Brian Acton, the WhatsApp co-founders, are now worth an estimated $6.8 billion and $3 billion, respectively. They deserve every cent of it.

And above all, Mark Zuckerberg who created this kind of stimulus on our planet

Note added March 11, 2014

What if a Company Maximized Jobs Over Profits?

This is a title of an article on HBR blog
All over Silicon Valley, venture capitalists are asking entrepreneurs “How scalable is your business model?” What they really mean is, “Can you grow without having to hire people?”
In our digital economy, value creation and job creation don’t always go together.  Consider that Whatsapp just sold for $19 billion with only 55 employees.  It used to be that business growth led to job growth.  But as machines get smarter, labor becomes a reluctant necessity.  Companies only hire as a last resort.
Employment for autistic is a noble cause, that myself promoted with the project New Dandelion, autism employment with no government funding. see http://bit.ly/1e5nvzj

However, the creation of businesses focused on maximum job creation can not subsist and flourish without creating a business model.

A supermarket  is a business model creating jobs rather than very high profits. But do we want our autistic people to work in low labor pay supermarkets as the only option? And do we want to see the supermarket employees having higher pay and job challenges? Whole Foods, Nugget markets, Trader Joes are example of a new kind of supermarkets, and Safeway sale is a sign that this older company did not transform fast enough

My son is learning in Sierra College for mechatronics, using tutors. Without tutors he can not function. He can achieve the skills to join a high tech and take advantage of his extraordinary attention to details

See the The extraordinary laptop repair slides

The job creation can not be artificial. It goes hand in hand with technological advancement, which has plenty of room for autistic skills. See for example how Israeli Army Intelligence Unit uses autistic staff:
The Israeli Satellite Intelligence Unit provides essential information used by the military to execute highly complicated operations. This data is gathered using satellites orbiting Earth, high above the combat arena. In addition to satellites, Unit 9900 uses manned and unmanned aircraft, and advanced sensors.
The autistic young men and women who serve in Unit 9900 can sit for hours  in front of electronic maps spotting the minutest changes, Channel 10 said. This is a rare ability that eludes most non-autistic soldiers.
These are the same skills required to analyze satellite images for traces of Malaysia Airlines Flight 370 which today is the subject for an intense search

Wednesday, March 05, 2014

Please take a short survey about this blog

The Memories of a Product Manager blog started in December 2005. As an independent blogger, - among  thousands and thousands of other talented bloggers - I am surprised at the success this blog had with readers from all over the planet. It grew steadily over nine years. We are not Wired or New York Times (unfortunately),  yet being smaller and independent in the greater Bay Area meant making a difference.

You help me very much by answering

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Monday, March 03, 2014

Can Human Resources adapt Product Management and bring happiness?

Read also The need to hire non-conformists and underdogs

Jobs are, the most important element for creating social wealth and a higher quality of life.

Every company creates wealth. They create products. They create services. They create jobs
We use product management  to make products and services filling a need that customers want and like. There are no Product Managers in Human Resources.

The traditional recruiting process

The The Steps of the Recruiting Process … and How to Identify Failure Points thinks the secret to recruit the best is to identify the failure points. The author recommends 19 (yes, nineteen ) steps for an "effective recruiting process"

Every author seems to have a different number of steps. This article recommends 10 steps.

Others make complicated charts, like this one:
Fig. 1 A sample recruitment process among hundreds  similar ones on the web
This is the traditional HR app features. They are often looking for human beings that don't exist. The  candidates dress, rehearse, talk and write resumes hiding the real selves and faking to appear what they believe -  but they are never sure - the recruiter wants them to be.

This system undergoes a big-datazation - for a lack of a better names, where the job seekers, - meaning the great majority of the employable population  - becomes records in a colossal  impersonal database.

I would expect a company like LinkedIn to market one day a Global Human Resources application that will directly connect to nearly 300 millions employable people. Oracle can compete if themselves adapt to the 21st century

What Google discovered hiring people

In June 2013, New York Times published an interview with Laszlo Bock, Google's  senior vice president of people operations . Here are few bullets from what he says
  •  Brainteasers are a complete waste of time. How many golf balls can you fit into an airplane? How many gas stations in Manhattan? A complete waste of time. They don’t predict anything. They serve primarily to make the interviewer feel smart.
  •  G.P.A.’s are worthless as a criteria for hiring, and test scores are worthless — no correlation at all except for brand-new college grads, where there’s a slight correlation. Google famously used to ask everyone for a transcript and G.P.A.’s and test scores, but we don’t anymore, unless you’re just a few years out of school. We found that they don’t predict anything.
  •  the proportion of people without any college education at Google has increased over time as well. So we have teams where you have 14 percent of the team made up of people who’ve never gone to college.
  • After two or three years, your ability to perform at Google is completely unrelated to how you performed when you were in school, because the skills you required in college are very different. You’re also fundamentally a different person. You learn and grow, you think about things differently.
Thomas Friedman the NYT columnist did a follow up interview with Laszlo Bock in February 2014. Here are some bullets from his conversation

  •  No. 1 thing "we look for is general cognitive ability, and it’s not I.Q. It’s learning ability."
  • No, 2 “is the emergent leadership as opposed to traditional leadership. Traditional leadership is, were you president of the chess club? Were you vice president of sales? How quickly did you get there? We don’t care. What we care about is, when faced with a problem and you’re a member of a team, do you, at the appropriate time, step in and lead?"
  • No. 3 “intellectual humility. Without humility, you are unable to learn.” It is why research shows that many graduates from hotshot business schools plateau. “Successful bright people rarely experience failure, and so they don’t learn how to learn from that failure,” 
    “They, instead, commit the fundamental attribution error, which is if something good happens, it’s because I’m a genius. If something bad happens, it’s because someone’s an idiot or I didn’t get the resources or the market moved...
  • Summing up:  Talent can come in so many different forms and be built in so many nontraditional ways today, hiring officers have to be alive to every one — besides brand-name colleges. 

What is a job?

Google is a very special company. But for the great majority of companies, this definition from Umair Haque fits like a glove
The job. Some call this is the Age of the Internet, the Age of China, the Age of Innovation. But above all, we live in the Age of Dilbert. Or, more accurately, we suffer through it. So why can't we have work that nourishes the mind, body, and soul? Why can't we have work that's meaningful and fulfilling, challenging and compelling, riveting and involving? Work that's not just, well, work, a source of displeasure that pays the bills, but a calling, a mission, a purpose, and a passion, that pays life forward? Here's my hunch. Whoever does reinvent the job might have finally built a company that's so relentlessly innovative, so fully engaged, so unshakably persevering that it reduces pretty much everyone else to a distant second place.

Product Management  in a modern HR organization

Do we know what a Product Manager does? is my previous post. This blog post is not intended as a panacea solution. But let look how some of the Product Managements principles from a startup (intercom.io) might apply for new job process
  1. Who, where are the people you can motivate to join your organization? Why?
    We see Google has a precise answer
  2.  Customers rarely buy what the company thinks it sells
    Translation: the best candidates are rarely the ones you think you need
  3. Customers are not demographics when they choose to buy
    Translation: candidates are individual human being, not faceless identities part of imaginary artificial groups. 
  4. Don't confuse correlation with causation
    Self Explanatory 
In other words, job recruiting must offer happiness, not only a salary and companies profits. Sure the last recession made recruiters dominant in buyers market

Why change the way we do HR today?

Until now, most companies doing  business in digital space try to emulate Oracle, Dell, HP, SAP. Kodak, just to name a few. These companies have  legacy processes, bureaucracy, command-and-control structures, waterfall development, and cautious risk management . They must change to thrive in the future 

21st century  companies are lean, learning machines. Amazon, Apple, FaceBook, Google set the trend. They have a bias to action and a tolerance for risk, expressed through frequent experimentation and non-stop product iteration.  They are focused on customers. They are comfortable with the unknown – business models and customer value are revealed over time. They are driven by a purpose greater than blunt profit seeking; and they want to make a difference on this planet.

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